Inflation comes for your oysters

By Erika Tulfo, CNN

New York (CNN) — Americans are shelling out more for oyster happy hours.

Experts say the buck-an-oyster deal of yore is all but dead, with some noting restaurants have hiked prices as high as $2.50 apiece.

Oyster happy hours are just the latest piece of American life that’s gotten more expensive as prices have muscled higher in recent years. While the US Federal Reserve has made progress in beating back the rate of price increases, inflation has remained stubbornly above target, and Americans have been paying more for everything from groceries to rent to, yes, hanging out at their neighborhood bar for an oyster deal with friends.

Wholesale oyster prices soared to triple digit highs in 2022 and only began coming down late last year. But general inflation forced retailers to raise store prices to avoid losses on their excess oyster stock, even as sales and wholesale costs trended downwards, according to Wells Fargo Agri-Food Institute’s most recent report.

In decades past, oysters were plentiful and (relatively) cheap — a good combination for bar food.

“Historically, Americans would consume a lot of wild oysters, and because they were so abundant, they were at such a low price,” said Julie Qiu, co-founder of the Oyster Master Guild, a New York City-based organization focused on oyster education. “People kind of anchored their perception of oysters being a cheap food until all the wild oysters pretty much went away.”

While Wells Fargo says that wholesale oyster prices have come down from the previous year’s high of $117 per gallon to $88, longstanding supply issues exacerbated by climate change could mean the price that consumers see on oyster bar menus won’t be deflating anytime soon.

The sheer lack of wild-caught oysters is the biggest supply issue underlying market fluctuations, and industry experts say the problem can be traced back more than 10 years.

“We’ve had a lot of both man-made and natural events that have created some issues with oysters,” said David Branch, sector manager at the Wells Fargo Agri-Food Institute. He pointed to the 2010 Deepwater Horizon oil spill in the Gulf of Mexico and the rash of hurricanes in Louisiana as high-profile disasters that left oyster beds devastated and forced the industry to shift from wild-caught to farm-raised oysters.

Branch estimates that up to 60% of the current oyster supply comes from farms — a near-complete turnaround from 20 years ago, when 70% of oysters were wild-caught.

Qiu echoed Branch’s assessment, adding that the remaining wild oyster reefs are only a small fraction of their historic numbers.

“We are really relying on intensively farmed oysters, which means that they require a ton of labor and personalized handling from people and sophisticated machinery,” she said. “That is starting to reflect down the supply chain. It gets into a restaurant, and the restaurant has to mark it up a certain percent in order to cover their labor costs.”

While there are efforts to restore wild oyster reefs, the effects of climate change aren’t making things easier.

Beyond rising temperatures, heavy flooding and rain could change ocean salinity, introduce new predators or allow new diseases to flourish.

“Climate change is making growth really difficult to be consistent … there’s just a whole lot of things that can go wrong with farming oysters,” Qiu said.

But for all the complications rocking the oyster market, demand hasn’t showed signs of slowing. According to Branch, interest in the shellfish has actually been on the uptick, fueled by Gen Z and millennials looking to explore gastronomic options. But he says that that demand, coupled with already dwindling supply, is only pushing prices further up.

“The industry has been trying to catch up and replace the loss of what we had with our wild-caught (supply),” he said. “It’s still expanding, but it just hasn’t been as quick to fill the gap with what we had.”

This renewed interest in oysters as a luxury appetizer is not something lost on Qiu. Still, she says she is optimistic that the industry will be able to boost supply and stabilize pricing in the long run through restoration efforts and sustainable farming.

“We hope that one day we will get back to that space where you can have oysters as an affordable, healthy protein,” she said.

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