Lobster is a bit of a financially inefficient catch (by design); it is difficult (and therefore expensive) to transport; it plays an important part in restaurant menus; and, in the end, consumers expect to pay good money for it.
Lobster is expensive because it is widely regarded as luxury food item, so merchants can charge more for them. Moreover, declining lobster populations have also driven the cost up. Meanwhile, the regulations concerning seafood production have made rapping lobsters prohibitively expensive.
Lobster is not just something that people are happy to pay for: It makes prices for other items on a menu seem more attractive. That is why the price of lobster stays high, even as the per-pound prices fishermen charge for it drop to a very low point. Even when the price per pound of lobster falls on the docks, the price that we pay at restaurants stays high.
Even when wholesale prices drop, restaurants have kept the lobster prices high to make sure that their customers believe that they are offering the best available catch. Even if the wholesale prices plummet again, the lower prices paid in markets or restaurants could cause people to like lobster less, thinking that they received a lower quality product.
Because we unconsciously associate lobster with a high price, lower prices would greatly decrease the likelihood that they would buy. For what it is worth, you can expect to pay higher prices because the transport and storage of lobsters are costly.
An Overview of Lobsters’ Cost Drivers
Lobsters are expensive because maintaining, getting, storing, and cooking lobsters takes significant time, energy, and knowledge. Lobster is more expensive than crab because they are harder to catch, store, and keep alive until you can cook them. Lobster is really time-consuming to catch, which makes them costlier since it is precious. It is not just the difficulties of farming lobsters, but also relying on lobsters caught wild, which makes them more expensive.
Lobsters are scarce, and even the capture and preservation of lobsters consume many resources. Because the majority of lobsters go through a lot of hands in their journey from the Atlantic coast to your dinner plate, the same supply chain issues affecting many other commodities are driving up prices of lobster meat.
There is less labor throughout the entire industry, supply chain issues, and inflation due to rising gas prices to transport lobsters around the country. Relying on transient foreign workers for processing, this shortage of labor has affected the lobster industry for years, leading to higher prices for the lobsters that do indeed reach the market.
Other factors contributing to high lobster prices include the shortage of supply available and the seemingly slower start of the fishing season. Lobster supplies are relatively fixed and are based on what can be caught, so as demand increases, prices will follow. Wholesale lobster prices were unusually high for almost a year, but this year has brought prices back close to historic norms. Wholesale lobster prices typically drop into the $8-$9 a pound range when the fall arrives, according to The Associated Press.
Recent Price Hikes in Lobster
Some Maine shops charged $17 or $18 a pound for live lobsters in May, roughly double their prices from one year ago. The wholesale price of 1.25-pound live lobsters on the New England market was $9.01 a pound on May 1, according to Urner Barry, an economic editor.
Some restaurants are charging market prices, with one D.C. steakhouse, The Prime Rib, charging $100 for a two-pound lobster (before taxes). The extortionate price is so steep, that The New York Times reported lobster rolls can run up to $34.00 ($28.83) a piece — and some businesses are saying customers appear to want to pay it. The price is more than twice as high as just 10 years ago, says Tselikis, and live lobsters are going at record prices, and lobster meat is worth even more.
Now, as the market is coming out from one of the biggest challenges of all time, the industry is thrilled to see that demand for the product has not gone away, Tselikis said. Because lobster is considered such a luxury item now, it means if a single lobster vendor drops prices, that can create a domino effect across the industry. As the appreciation of lobster has expanded around the globe, demand from distant places has driven up the price of lobsters closer to home.
Lobster Remains a Popular Delicacy
This popularity has increased its value, and as the lobster supply has decreased, prices have increased over time, and have continued to do so until now. Lobster prices have increased in recent decades because of the lobster lifecycle, overharvesting, and safe-food technologies. The shellfish is considered a – and is sold in restaurants as if it were – luxury commodity, but massive harvests of lobsters (believed to have been caused by global warming) have saturated the market, leading to prices down as low as $2.20 per pound from the ship.
If someone in California wants to order a live Maine lobster, for instance, shipping alone could cost over $40 a shell. If you really want to get cheap lobster, that is probably going to involve some traveling costs up the coast during the lobster season–just be sure that lobster has already been molted.
We put the market price on the menu, and then we deliver the bad news when somebody wants to eat already-pricey lobster, says Boston-born Greg Casten. While restaurants typically list lobster as the highest-priced item, the wholesale market price those who collect lobster receive for their harvest fluctuates like the tides in the Bay of Fundy.
Jamie Leeds, the chef/owner of Hannk Oyster Bar, whose lobster rolls have gained local fame for almost two decades, raised their prices by one dollar last year, up to $29 a roll, across his three New England-style restaurants. The reasons behind the higher prices are many-sided, Maine Lobster Merchants Association executive director Annie Tselikis told SeafoodSource.
