UPDATE: Crabbers worry about cash flow as year ends

Jessie's Ilwaco Fish Co. is a major processor of Dungeness crab, but some crabbers are expressing frustration with how quickly they are being paid for this year's harvest.

ILWACO — What has turned out to be a rough commercial crab season recently became even harder for some fishermen selling to Jessie’s Ilwaco Fish Company.

According to fishermen, many of whom have sold their crab to Jessie’s for years, the seafood processor had not paid the full amount owed them as of Christmas Eve. As of Dec. 29, some fishermen said they have received more money, but still not the entire amount. No update or comment on the situation was available from Jessie’s as of Dec. 30, though owner Don Alber spoke with the newspaper briefly on Dec. 24.

This puts the fleet out by thousands, according to some estimates. Dungeness crab was going for $3.10 at the start of the season and then $3.50 per pound, an increase over last year when fishermen saw prices of $2.62 per pound at the start of the season. The price rose again after Christmas to around 4.50 per pound.

One woman who called the Chinook Observer worried about meeting costs for the season, let alone turning a profit. She said they had yet to pay their crew and were relying on a full pay check from Jessie’s to do so.

“We’re paying the boats,” was all owner Don Alber would say in a phone interview Dec. 24.

The day before, long-time manager Doug Ross said the rumors that Jessie’s wasn’t paying crab fishermen were “not true.”

When asked if Jessie’s had paid fishermen only a third of what was owed them, as some fishermen have reported, Alber repeated, “We’re paying the boats.”

When asked when fishermen would see the full amount owed them, Alber answered, “Shortly. Very shortly.”

Fishermen and their spouses brought the issue to the Chinook Observer’s attention last week, but preferred not to be quoted in order to preserve the possibility of future business relationships with Alber and Jessie’s.

The commercial Dungeness crab season started off on a high note, beginning for the first time in several years on the traditional Dec. 1 opener. Oregon and Washington’s fish and wildlife departments reported “beautiful” crab, some of the fullest they’d seen in years.

But landings were low and remained low for the rest of the month, dropping off even more as storms moved through the area and crab fishermen had to pull in their gear.

Crab fishermen are typically paid on a schedule, in this case on the 5th and 20th of each month. Some crab fishermen had been paid for earlier loads and a few others had deferred payment until after the New Year. But as for the rest, fishermen say, they have only seen a third of what was owed them by Jessie’s.

Fishermen who attempted to collect money on or after Dec. 20 said they were told there had been computer issues and to come back on Dec. 22. When they came back, the company only paid a portion of what was owed, they said.

Seafood processors sometimes struggle to pay boats upfront or on a schedule. Fishing and seafood processing is an uncertain business after all, but processors are known to take out a line of credit with their banks so that boats are paid and product continues to flow through the processors’ doors.

Alber either chose not to go that route or, as some fishermen and others theorize, he couldn’t.

Alber operates the seafood company Alber Seafoods, based out of San Francisco. He acquired Jessie’s Ilwaco Fish Company at the end of last year. Purchases and upgrades followed close behind.

This summer, after a long battle with a former tenant of the old East Point Seafood Facility in South Bend, Jessie’s expanded north and began processing ocean pink shrimp.

In an Observer story published in July, South Bend Mayor Julie Struck said Jessie’s expansion into South Bend brought a much-needed spark of development to the city. The facility was expected to provide about 60 jobs.

But the expansion required some investment on Alber’s part and a new lease to account for.

Alber also installed equipment at Jessie’s to enable the facility to process surimi, a sort of paste made from cheaper seafood such as whiting.

That was in place by this summer, but in August, Russia declared an embargo on various U.S. foods including seafood, which more or less gutted the “headed and gutted” whiting market. The benefit Jessie’s hoped to see from a calculated shift to surimi was diminished because other whiting processors pursued the same idea.

In an Observer story published in November, Jessie’s vice president of business development, Richard Carroll, spoke about the whiting market and the switch to surimi.

“This year is a train wreck,” he said, in reference to the drop in the whiting market.

Alber had also entered into a public-private agreement with the Port of Ilwaco not long after taking over Jessie’s.

The seafood company and the port hoped to work together to develop a cold storage facility in Ilwaco on port-owned land. The facility would have been primarily used by Jessie’s, but part of it would have been open to the public too.

After receiving support from the Ilwaco City Council, the port and Jessie’s requested a $2 million loan and a $300,000 grant from the state Community Economic Revitalization Board (CERC), but they were turned down.

In November, Carroll and port Manager Guy Glenn, Jr., told the Observer that the plans for a cold storage facility were on hold. Jessie’s had been paying for initial development of the plan, including collecting samples from the site where they hoped to build. According to Carroll and Glenn, Jessie’s was also paying for the services of project developer Ed Backus.

Jessie’s is, by some estimates, one of Pacific County’s larger employers, providing anywhere from 51 to 159 jobs depending on the season.

Current estimates provided by the Washington State Department of Labor and Industries show Jessie’s was employing 51 to 75 workers for the third quarter of 2014. This, of course, does not include the many independent fishermen and boat owners who also rely on checks from Jessie’s.

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