In search of a lost market

GOOD CATCH: According to the National Oceanic and Atmospheric Administration Fisheries, Rhode Island landed about 66 percent of all butterfish on the East Coast between 1965 and 1995. / PBN PHOTO/JOHN LEE
GOOD CATCH: According to the National Oceanic and Atmospheric Administration Fisheries, Rhode Island landed about 66 percent of all butterfish on the East Coast between 1965 and 1995. / PBN PHOTO/JOHN LEE

From the late 1970s through the ’80s, the small, silver-colored butterfish was a high-flying commodity in Japan. Millions upon millions of pounds were bought and sold, and almost the entire harvest came off Rhode Island vessels.
But as often happens with boom cycles, this one was followed by a bust – and the whole butterfish market dried up and vanished. The end came in the mid-1990s, after the Tokyo stock market crashed, and the value of the yen sank further below the dollar. But there were problems on the Rhode Island end as well – the fish were getting too small for the prices U.S. sellers were asking. So the Japanese found a cheaper substitute.
For nearly two decades the East Coast butterfish market has been dormant. Landings have been stagnant, and the quotas have been too low to regain market footing.
But that could change. In the past two years National Oceanic and Atmospheric Administration Fisheries has begun raising the butterfish quota, with the largest increase set for last month.
Getting a lost market back won’t be easy for Rhode Island fish sellers. Two significant obstacles stand in the way: one is economic, the other biological.
“There is no way we’re going to just flip a switch with this and be back in boom time,” said Glenn Goodwin, co-owner of SeaFreeze Ltd., a Rhode Island frozen seafood company based in North Kingstown and the Narragansett fishing village of Galilee.
SeaFreeze has been in the butterfish business since 1984.
Goodwin owns the company with his brother Kyle, who is the captain of one of the company vessels, and their father, Richard, who started it, and who helped develop many innovations for at-sea freezing, sorting and processing.
Richard Goodwin is among those who helped make Rhode Island the largest harvester and processor of butterfish before the crash. According to NOAA landing reports, from 1965 to 1995, Rhode Island landed about 66 percent of all butterfish on the East Coast.
“It’s a Rhode Island fishery,” said Chris Roebuck, second-generation squid-boat captain and owner of two Galilee trawlers. “All the butterfish history is here – from the markets to the landings. SeaFreeze has the connections. It is up to them for the market to happen again.”
Patience, pleads Glenn Goodwin. “All this will take time,” he said. “You need to displace something else to get a market going. You need to create new demand or new outlets for the fish.” Butterfish are a schooling fish that grow fast and die young. A 4-year-old butterfish is considered old, and many don’t live much past the age of 3. Their range is from southeast of Nantucket to below Virginia. The waters outside of Block Island have been a traditional area for large butterfish catches.
“The 1980s were a good time to be in the fish business,” Goodwin said. “Jimmy Carter dropped the dollar down to historic lows at the same time that the Japanese economy was rising.”
“In 1983,” Goodwin continued, “The butterfish market exploded. That’s when the Japanese started putting our fish on auction in Japan. Overnight the price went from 50 cents a pound to a dollar.”
According to NOAA landing reports, in 1984 11,715 metric tons of butterfish were harvested off the East Coast. Of this amount Rhode Island landed 10,560 metric tons, or slightly more than 23 million pounds.
After the butterfish market collapse in 1995, butterfish landings sank and with them so did the quotas. The East Coast quota in 2005 was 1,681 metric tons. In 2009 it dropped to 500 metric tons, and then rose to 812 metric tons in 2012. The quotas were too small to get the fishery back off the ground. SeaFreeze kept putting pressure on fishery managers, telling them that the fishery had not collapsed, the market did. The fish, they claimed, were still abundant and warranted bigger quotas.
Then in 2013 a new stock assessment by scientists, fishermen and managers was done. Through a cooperative effort, a new way of looking at butterfish stocks was born. The science – through modeling and real-time data – looked at everything from the ever-changing environment in which the butterfish live to how effective the survey net is at catching them.
The new stock assessment showed a much higher population of butterfish than previously calculated. The East Coast quota for 2014 jumped to 5,100 metric tons. And last month the quota was set for 22,530 metric tons, just shy of 50 million pounds – the largest it has ever been.
Right now, according to market reports, the average ex-vessel price (what the vessel is given for its fish at the dock) for butterfish is from 20 cents to 70 cents per pound. Recouping a majority of the projected growth market could mean tens of millions of dollars for the state’s fishing industry.
“But you need buyers,” Goodwin said. “Just because there’s a big quota doesn’t mean the quota will be caught. I bet most of these fish will be left in the ocean. We’re not just going to stockpile our inventories with butterfish expecting to sell them off later on.”
He doubts the strong Japanese market of the 1970s and ’80s can be found today, either there or elsewhere.
“I’m not sure there’s an economy out there that is strong enough that they’ll pay high prices for our fish for extended periods of time,” he said. “When the dollar rises it makes it hard to make money exporting fish.”
The Japanese did replace the butterfish from their diets with a species of mackerel from Europe, called saba.
“So now you have a whole generation of Japanese eaters who have never heard of butterfish,” he said. “It’s not easy trying to get them to switch. Just because their parents ate butterfish doesn’t mean they will.”
Domestically, butterfish have not taken off, except for a small amount going into urban Chinatowns and a small amount going into the bait market.
But Point Judith fishermen are starting to think about butterfish again. Most fishermen over 45 remember the butterfish boom – and making enough money to buy a second home or a second boat, money to expand the fish plant.
All this butterfish revenue came during the winter months. “Midwinter is about the perfect time to catch them,” said Scott Smith, Galilee captain of the trawler Seafarer. “You’d look for butterfish at night – that’s when we’d catch them.”
One of the reasons is the way the Japanese wanted the fish, full of fat and with empty stomachs.
The fish would swim out to spend the winter in deeper water between 300-500 feet, out near the edge of the continental shelf. The fish would stop eating in the deeper water, using their fat reserves to last through the winter.
“The Japanese were very exact about how they wanted their fish,” said Jim McCauley, retired fishing captain and past owner of the Point Judith Fisherman’s Cooperative. “They had a certain way they wanted them packaged and frozen. They had a certain size fish they wanted. They called the shots.” Goodwin says Japanese buyers still want the fish, but they want them cheap.
“They keep asking when our production is going to begin,” he said. “So we send them product, and they say the fish are too small. And I tell them, ‘That’s the size of the fish we have.’
“We used to find big schools of big butterfish,” Goodwin recalled. “That isn’t so easy now. We used to catch 100-gram fish all day long. Now 80 grams is big – but the Japanese want 100-gram fish.”
Which brings up the other problem, the one of biology: a change in fish size.
NOAA Fisheries biologist David Richardson at the Narragansett Bay Laboratory looked back into the NOAA data collection and found that during the 1970s and 1980s the trawl survey tended to catch a higher percentage of big butterfish than they do now.
“It’s hard to say why this is happening,” Richardson said. “We’ve seen it with sea herring too. The fish tend to be smaller now.”
Fish can become stunted in size if the population gets too large, or if the water temperature gets too high. It has also been shown that high fishing effort can drive the size of the fish down by pressuring it to reproduce at smaller sizes.
“The first thing we look at is heavy fishing pressure,” he said. “With butterfish we don’t think this is the case – there hasn’t been enough fishing effort. These fish have a much higher natural mortality than they do fishing mortality.”
Scott Smith, the Galilee captain, is all for trying to revive the local butterfish industry. “If it gives me another opportunity to work on something when the squid are in a lull, then it could be a real boost to our incomes,” he said.
But he has some concerns about a quota so large.
“It’ll attract attention,” he said. “A lot of the New England fleet has been squeezed out of their traditional groundfish fisheries. Point Judith isn’t the only port that has butterfish permits.
“Just because we have all the history and processing doesn’t mean [fishermen based in other ports] can’t try and get in. The market could easily get flooded. But we could use four or five butterfish trips during the winter. That’d be huge for us. And I think I can find the big butterfish. I think those fish are off to the east.” •

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