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Lobster industry squeezed by oversupply

Justin Sullivan - Getty Images

The Maine lobster industry is being crippled by a glut of supply that many attribute to climate change, sending the price per pound plummeting and turning the crustacean into something it has rarely been before: affordable.

According to figures from the Maine Department of Marine Resources, the volume of the state's lobster harvests has skyrocketed from about 28m pounds in 1990 to 126m pounds last year as oceans have warmed, helping the shellfish and their larvae to grow faster.

But demand for what has long been considered a luxury dish has not kept pace, especially since the global recession hit in 2008, even as fuel and equipment costs rise.

(Read more: Spill May Cause Seafood Shortage)

"Overall profitability of the industry is suffering," said Patrice McCarron, executive director of the Maine Lobstermen's Association. Volumes are up about 80 percent since 2008. "So we're in a situation where we're trying to move an ever-increasing supply chain into a weak market."

Prices paid to fishermen at the wharf peaked at $4.63 per pound in 2005, but fell to $2.69 last year. Gastropubs have been offering lobster macaroni and cheese, while a Walgreens pharmacy in downtown Boston is selling live lobsters for $9.99.

Rising Chinese demand for high-end seafood is driving global seafood prices to all-time highs, according to a recent UN Agricultural Organisation report. But the Chinese effect on lobster prices had not been sustained, said Mark Murrell, owner of getmainelobster.com, an internet retailer.

(Read more: Cheap Lobster: Great For Tourists, Bad for Business)

"The price is around $2.25 [a pound] right now, though it changes daily," said Mr Murrell. "There's plenty of Maine lobsters. We may have another record-breaker."

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This year a massive Chinese order drove the price up $2.50 per pound overnight. But the rise lasted a month before dropping once the order was filled.

The drop in prices has caused tension between Maine and Canada. The U.S. state generally harvests cheaper soft-shelled lobsters, which are generally sold either to restaurants in the region or to food processors. Canada harvests hard-shell lobster, which are easier to transport.

(Read more: One Year Later: Louisiana Seafood Still In Flux)

Each country is the largest importer of the other's lobster.

But last year Canadian lobstermen blocked their US counterparts from delivering to the processing plants north of the border that buy more than half of Maine's lobsters.

This year the Canadian harvest has also been strong, sending lobstermen to farmers' markets and roadside stalls when processing plants – which make frozen lobster tails and other products – put limits on how much each fisherman could deliver.

(Read more: Red Lobster Fears Diner Backlash From Anti-Obamacare Stance)

The price drop has brought out entrepreneurs, who are opening processing plants in Maine to handle the glut.

The state might receive a boost from what seemed to be an improving US economy, said Robert Bayer, head of the University of Maine's Lobster Institute. "Lobster is a celebration food – when things are good, people go out to lobster meals."

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