This tiny US town is staking its future on Chinese foodies

When the US had a glut of the crustaceans, it looked far afield for a new market. Photo / Matt McClain
When the US had a glut of the crustaceans, it looked far afield for a new market. Photo / Matt McClain

The long journey from this remote island of free-spirited fishermen to the most populous country in the world began, as it does most mornings, at just about sunrise. Bruce Fernald, a sixth-generation fisherman, loaded his 38-foot fiberglass boat with half a ton of bait and set out in search of Maine's famed crustacean: the lobster.

One by one, Fernald checked the 800 traps he had placed along 30 square miles at the bottom of the Gulf of Maine. He quickly hauled each wire cage onto his boat, reached a gloved hand inside and plucked out the lobster lurking within. The young ones, the breeders and the crusty old ones were thrown back into the water. The rest were dropped into a saltwater tank to keep them alive and energetic on their 7,000-mile trip to China.

"Just do everything you can to not stress them out," Fernald, 64, said of his cargo. "The less stressed they are, the more healthy they'll be, just like people."

Little Cranberry, an island of 70 inhabitants, and China, a nation of 1.4 billion people, increasingly find themselves connected by the shifting currents of the world economy.

The rise of China's middle class has coincided with a boom in Maine's lobster population, resulting in a voracious new market for the crustaceans' succulent, sweet meat.

Exports of lobsters to China, nonexistent a decade ago, totaled $20 million last year. The bright red colour of a lobster's cooked shell is considered auspicious, making it a staple during Chinese festivals and at weddings.

The lobster's tale is a testament to the complexities of the global marketplace - and a reminder that the line between economic winners and losers is not always clear.

China has played the villain from Wall Street to the presidential campaign trail, blamed for plunging stock markets, the downfall of developing nations and the disappearance of blue-collar jobs - including in Maine, where the closings of lumber and pulp factories have left thousands of workers unemployed.

Yet the reality is more nuanced. Even as foreign competition has devastated parts of the US economy, China ranks among the biggest international customers for a vast array of other industries, from ginseng to airplanes to pork. Maine lobsters are just a tiny sliver of the $116 billion in annual exports to China, a figure that has nearly tripled in the past decade.

"China is undergoing an economic transition," said Shaun Rein, managing director of the China Market Research Group. "It's this new buying class that's changing trade patterns throughout the world."

Maine is still testing the potential - and the limits - of that relationship. The state is hoping that deeper ties to the Chinese can help boost ailing industries, but it could also make the state vulnerable to a far-off, and unpredictable, source of customers.

Out here on the water, the forecast is sunny. Amid the roar of the boat's engine and the blustery wind, Fernald said his philosophy is simple.

"My father always said, 'Keep hauling, and you'll get a day's pay,'" he recalled. "Most of the time, that's true."

Josh Kane works on a lobster boat as it sits by a dock on Friday April 29, 2016, in Islesford, Maine. Photo / The Washington Post
Josh Kane works on a lobster boat as it sits by a dock on Friday April 29, 2016, in Islesford, Maine. Photo / The Washington Post

There's no escaping the lobsters at Fernald's home on this island, where his family has lived since 1850. A brass lobster decorates the front door. A metal lobster graces the front yard. His collection of baseball caps hangs on lobster hooks. Even his butter dish is shaped like a lobster.

Fernald has been fishing since he got out of the Navy more than four decades ago, one of three siblings to follow in his father's rubber-booted footsteps. In his workshop, Fernald keeps wooden buoys painted by generations of lobstermen before him.

Although the techniques for trapping lobsters haven't changed much since, the industry itself is in the midst of transformation.

For the first time in decades, Maine is facing a glut of lobsters.

When Fernald's father was working these waters, Maine's lobstermen pulled in roughly 20 million pounds a year. But since 2012, landings have topped 120 million pounds. Explanations for the population boom range from climate change to the overfishing of cod, the crustacean's natural predator, but the statistics are irrefutable: The state has more lobsters than it can handle.

The record catch in 2012 caught the industry by surprise, sending prices falling to the lowest level in almost 20 years. Lobstermen averaged just $2.69 per pound of lobster, barely covering the cost of going out on the water for many fisherman. The businesses that buy and sell the crustaceans say they did not fare much better. The sheer volume helped make up for the decline in price, but the margins grew scarily thin.

China is undergoing an economic transition... It's this new buying class that's changing trade patterns throughout the world.
Managing director of the China Market Research Group Shaun Rein

"We bought a ton of lobsters and made absolutely nothing off it," said Aaron Bernstein, who manages the dock from which Fernald and the other fishermen on Little Cranberry ship their catch. "It was a very difficult season."

Maine faced a potential crisis. The Pine Tree State already had suffered the decline of its traditional manufacturing industries, lumber and paper, victims of advances in technology and foreign competition. An analysis by the Economic Policy Institute estimated that cheap exports of Chinese goods cost Maine 11,400 jobs, or nearly 2 percent of total state employment, between 2001 and 2013.

The lobster industry could not be allowed to implode as well.

The solution state officials came up with seemed to come straight from an economics textbook: When supply is too high, increase demand - in other words, get more people to eat lobster. And nowhere are there more people than in China.

The first Maine trade delegation arrived in Hong Kong at the end of that year. Since then, the state has established a full-time development office in Shanghai and led a second trade mission to the city last year. Last fall, officials finagled lobsters onto the menu during the White House state dinner for Chinese President Xi Jinping. The lucky red crustaceans were featured as the second course, poached in butter and served alongside traditional rice-noodle rolls.

It was a coup for a state that lacks name recognition in China. In fact, Maine lobsters are often called Boston lobsters overseas, since they are shipped from Logan International Airport.

"Most of the time when we go to Asia, we find that people don't even know where Maine is," said Janine Bisaillon-Cary, who heads the Maine International Trade Center.

Her pitch typically begins with geography but quickly moves on to the state's pristine waters and crisp air, its strict seafood conservation efforts and outdoorsy culture - selling points intended to appeal to a country plagued by pollution.

Experts say well-off Chinese consumers have moved beyond collecting luxury goods such as designer handbags to coveting luxurious experiences. Their palates now demand beef from Australia, honey from New Zealand, wines from Chile - and lobsters from Maine, preferably alive, so that chefs and diners can select the feistiest ones to feast on.

That's a really tough concept for the Chinese. They're like, 'We want to own everything'.

At the five-star Conrad Hotel in Beijing, chef Mirko Sun dishes up lobster porridge, lobster bisque with garlic croutons and a lobster salad with fresh herbs. The crustacean sells for roughly $42 a pound, about a quarter of the average urban worker's weekly income.

"For most Chinese people, eating lobster is about face," Sun said. "Mostly people only order it to treat important guests."

But Maine is not the only source of the crustacean.

China gets much of its lobster from Australia, although it is the spiny-tailed variety that residents here deride as tougher and less flavorful. Still, China is spending millions of dollars to erect a shipping facility in Australia, and a fishermen's co-op there is building holding tanks for live lobsters in Guangzhou, according to local news reports.

The projects exemplify China's typical investment strategy: Go big. Instead of just shipping copper from Africa, it bought the mines. To feed its growing taste for American pork, it bought the largest producer in the world, Smithfield Foods. Bisaillon-Cary said she has had to explain to interested investors that Maine's fiercely independent lobster industry is not for sale.

Each of Maine's 5,785 lobstermen is an independent business: A license allows its holder to own one boat, and he must do the fishing himself. Each day, the lobstermen sell their catch to dealers for shipment across the country and around the world. State law prohibits dealers from owning boats and lobstermen from becoming dealers, ensuring that this $500 million industry remains decentralized.

"That's a really tough concept for the Chinese. They're like, 'We want to own everything,' " Bisaillon-Cary said. "We're like, 'You can't do that.' "

Instead, the state has tried to steer Chinese investors toward plants that process lobsters - or other industries altogether. A Chinese firm purchased a struggling paper mill in 2010 and recently announced investments expected to add hundreds of jobs. Another Chinese company is building a health-care center in an abandoned shoe factory that caters to foreigners seeking medical care. State schools and colleges are wooing international students.

It may not be enough to replace all the manufacturing jobs that have disappeared, but it's a start.

"To me, this is our last stand," said Matt Jacobson, head of the Maine Lobster Marketing Collaborative. "We better do this right."

Aaron Bernstein, top, is reflected in a mirror as he and Brian Bunker, right, work on unloading a boat with lobsters from Cranberry Isles Fishermen's Co-op. Photo / The Washington Post
Aaron Bernstein, top, is reflected in a mirror as he and Brian Bunker, right, work on unloading a boat with lobsters from Cranberry Isles Fishermen's Co-op. Photo / The Washington Post

Forty years ago, Fernald convinced the two dozen other lobstermen on the island to pool their catch so they would all receive the same price per pound and share in the bounty of a good year and the belt-tightening of a bad one. That cooperative is still operating, with the island's haul ferried roughly once a day to a dock on Mount Desert Island, three miles away.

While Fernald worked his traps on a recent morning, another boat carried the previous day's landings to the dock. Workers hoisted the crates of live lobsters from the boat and onto the pier, then loaded them onto a truck for the three-hour drive down to Portland.

"That's a nice catch for Little Cranberry this morning," said Bernstein, the manager at the dock, which is run by Beal's Lobster Pier.

The truck was headed to Ready Seafood, a large supplier of Maine lobsters to China. At the company's headquarters in downtown Portland, the lobsters would be immersed in cold water to purge their intestines and keep them docile. Then they would be transferred to a second, cleaner tank until they could be packed into boxes with frozen gel packs and wet newspaper to keep them alive during the drive down to Boston and the long flight to China, which takes at least 14 hours.

Lobster prices have rebounded since their 2012 plunge, but this year could test Maine's strategy. Forecasters are predicting an early start to the fishing season, which could push prices down again. On this day alone, the value of a pound of lobster dropped 75 cents - on top of a $2 decline over the past few weeks.

"They say it's not going to be like 2012. But no one can really predict that with any certainty," said Justin Synder, part of the family that owns Beal's Lobster Pier. "It's classic supply-and-demand economics."

When I first started, we made a living, and that was good... I know it won't stay this way forever. Anybody that's not taking advantage of it might be in trouble.

The lobsters loaded onto Ready Seafood's truck went for $5.25 a pound. But for Fernald's catch today, he would get just $4.50 a pound. He learned the bad news as he unloaded his boat back at Little Cranberry.

"What?!" Fernald said in surprise, then rolled his eyes. "What a bunch of bucketheads."

Maine's iconic industry is more than just a revenue stream. The mix of fishermen, artists and wealthy New Englanders on this tiny, picturesque island is at the heart of the state's nonconformist culture. Fernald has entertained blues singer Bonnie Raitt on his boat and once appeared in an Old Milwaukee commercial, sitting by a campfire and enjoying a cold one. His wife, Barbara, used to work on his boat, earning his respect when she baited his traps with maggot-infested fish without complaint. Now she designs jewelry, and his crew member is a 24-year-old college grad who walked away from a high-paying job offer at a hedge fund in California to spend his days on the water and also raise hogs.

In Fernald's father's day, trapping lobsters was the path to a modest but comfortable lifestyle. Since the population boom, it has become big business: Many fishermen pull in sales totaling six figures. Some lobstermen have indulged in new traps, new cars and new boats with monthly payments that can rival a mortgage.

For Fernald, the increase has helped pay for his twin sons to go to college and helped shore up his retirement account - even though he says he has no intention of turning in his boots anytime soon.

"When I first started, we made a living, and that was good," Fernald said. "I know it won't stay this way forever. Anybody that's not taking advantage of it might be in trouble."

- Washington Post

Get the news delivered straight to your inbox

Receive the day’s news, sport and entertainment in our daily email newsletter

SIGN UP NOW

© Copyright 2016, NZME. Publishing Limited

Assembled by: (static) on production bpcf02 at 28 Sep 2016 09:51:49 Processing Time: 657ms