Project Title: Woods Hole Sea Grant COVID-19 Related Rapid Response to Aquaculture Industry
Evaluation of oyster shucking and processing in Massachusetts to explore logistics, production costs, and retail pricing of value-added products
Shellfish aquaculture production of oysters is a $27.6 million dollar industry in Massachusetts with 1200 acres in cultivation and 388 growers participating (DMF 2018). The size of the industry has nearly quadrupled in value over the decade from 2008 (~$7.5M) to 2018 (~$27.6M). A 2015 MA Shellfish Aquaculture Economic Impact study estimated that the industry supported a total of 909 jobs in 2013 and that an economic multiplier of 1.79 could be applied to account for the indirect jobs it creates and the related businesses that it supports such as hatcheries, warehouses, transportation, and ice.
Ninety-four (94) percent of oyster production in MA goes to the raw half shell market. This is a high value per piece market that has requirements in terms of product size and quality. Given the growth of the industry in MA, and winter temperatures that more often than not produce ice, growers have experienced a glut of product being sold in the fall that leads to the industry receiving lower prices per oyster, if there is even opportunity to move product at all. The ironic piece of the fall market challenge is oysters are at their highest meat yield quality. Even before the COVID-19 pandemic, which severely impacted the half shell market, efforts were underway to explore and mitigate these imbalances. Could creating a new market for shucked oysters provide a way for growers to sell oysters that do not meet the high-quality standards of half-shell product while also providing a secondary market for periods of over-supply in the fall?
Woods Hole Sea Grant/Cape Cod Cooperative Extension (WHSG/CCCE) staff and partners began formally exploring this issue in 2017 within the project, “Market Development to Diversify Shellfish Aquaculture Products in Massachusetts” that was funded by the 2017 NOAA Sea Grant Aquaculture Impediments Competition (NOAA-OAR-SG-2017-2005177.) A food industry consulting firm was hired to assess the current shucked oyster market, associated products, and potential for growth in that sector (Pentallect 2018). Shucked oysters represent roughly 40 percent of the domestic oyster volume. With no commercial scale oyster shucking houses currently located in the Northeast, the supply is from the Chesapeake, Gulf Coast, or Pacific Northwest.
Additional value-added product forms such as smoked, premium canned, pickled, or frozen half-shell forms represent a small but higher value niche in the national market for shucked products. The smoked and canned varieties are largely sourced from cheaper overseas markets. The frozen half-shell product geared for large scale catering events is estimated at 1-2 percent of the total fresh oyster market but requires significant expense in shucking and freezing infrastructure.
Using information gathered from a regional and nationwide survey of growers, dealers, and retail buyers the consultant determined there is an estimated $1M in additional opportunity for shucked oyster products sourced from the Northeast and packaged in retail containers. It was overall uncertain whether a local product would have more value or opportunity in the Northeast than current competing products. To begin to assess this question an event was planned for April 2020 to introduce member chefs in the Cape Cod and The Islands Chefs Association to local Cape Cod shucked oysters and compare their taste, size, and texture to shucked oysters sourced from elsewhere. This in-person event had to be canceled due to COVID-19, but it has been modified to an at-home “Shucked Oyster Cook-Off” with 6 chefs participating in early June.
With the arrival of COVID-19 and the social distancing measures to mitigate its spread, sales of oysters have plummeted. This has negatively impacted shellfish aquaculture businesses and the related businesses that support their operations. Most seafood in the United States is eaten in restaurants. Without restaurant sales to drive the purchase of large quantities of half-shell oysters, those oysters are now sitting on aquaculture lease areas taking up space and growing in size and in some instances already outgrowing the half shell market. Crowded oysters can also become misshapen as farmers struggle to determine how to operate in an extended market interruption, creating further half shell market challenges or downward price pressure. Without the space (or the staff) on the lease area to sort, grade, and reduce the density of younger oysters contained in gear, the quality of the oysters destined to be sold next year will be negatively affected. Oysters remaining on the lease area taking up space also affect cash flow and a grower’s ability to purchase seed for the next crop.
The highest need of the Massachusetts shellfish aquaculture industry at this time is to move product off of aquaculture lease areas and into active markets that allow for recuperation of ongoing expenses.
WHSG/CCCE proposes to work with a team of partners with diverse backgrounds in the aquaculture, seafood, food systems, social services, manufacturing, shucking, and food processing industries to explore the logistics and costs involved with creating value-added products from shucked oysters and assess their market feasibility. This will be accomplished through a combination of technical assistance, extension work, and cooperative research.
1. Provide opportunity for growers to sell oysters in the absence of the normal restaurant markets
2. Provide funding and work for shucker/packer and food processing businesses that have reduced activity due to COVID-19 related issues
- Provide high quality protein to people in need
4. Track and assess the logistics and costs associated with the shucking and processing of oysters
- Assess the market feasibility of various value-added oyster products
6. Synthesize the information into a report made available to individuals and businesses interested in the potential profitability of value-added oyster products