Geoducks, Tulips and Internet Stocks

Current activity in the geoduck industry points clearly to a growing concern about a collapse in geoduck prices. (read a recent Seattle Times article on sky rocketing prices here) When that happens, and it will, what will Puget Sound's intertidal tideland habitat be as growers abandon their farms?



Consider the control of "production" from intertidal and subtidal tidelands suitable for growing geoducks in Puget Sound and investor "frothiness" in Canada.

Intertidal private tidelands:
1. There is a rush by shellfish operators to extend and lock current leases at the minimal 10% lease rates. This not only guarantees a minimal cost in the form of rent or property taxes, it also guarantees those tidelands cannot be used for anything else by anyone else. (Private tideland owners, unaware of the value and control they could extract from the growers, simply agree, allowing producer profits to be maximized.)
2. Controlling the supply of tideland production is seen further through their being purchased at premium prices. As an example, Manke Timber sold Taylor Shellfish 10 acres of tidelands, of which perhaps 5 are able to grow geoduck, for $475,000. Fudge Point Property appears to have sold 5 acres of lower tidelands to Taylor Shellfish for a similar price. (Note: Counties are to date reluctant to appraise tidelands being used for geoduck production at their true value, leaving hundreds of thousands - if not millions - of dollars in tax revenues uncollected. A rare exception is the Taylor/Manke tideland parcel.  However, its balance of $7,941 has not yet been paid by Taylor.  Again, if tidelands are leased, that tax burden will fall on the owner, not the producer.)
3. Of the remaining privately held tidelands, most have chosen instead to have their tidelands remain in their natural state, prioritizing their natural habitat functions and species diversity over the PVC structures needed to grow geoduck and the drop in species diversity which occurs (i.e., a monolithic population dominated by geoduck, with the few species attracted to PVC "structure" eliminated when the PVC pipe is removed).  This also constrains production.

State owned public tidelands (Is DNR the Saudi Arabia of the geoduck market? Able to turn on or off supply to influence pricing?):
1. Of the few remaining publicly owned intertidal tidelands, the shellfish growers have pending leases on many of those suitable for geoduck production. The state may or may not allow these tidelands to be removed from the public's use. If leased, further control over production would be gained by the few large operators, at a minimal lease rate (one bid was close to 20%, the remaining are at the "standard" 10% rate). As long as they are not leased, production is constrained.  If leased, producers gain production at minimal cost, a loss in revenue for the state and a loss in use by the public.  (Note: Some wonder whether there is complicit support by some growers preventing those tidelands from being leased to further constrain supply, thereby keeping prices artificially high.)
2. Subtidal tidelands owned by the state are currently stripped of geoduck, then allowed to re-populate naturally over a period of 20 to 35 years, at which time a new "crop" is available. Harvest limits are set at ~3% of the estimated number of wild geoduck. Instead of pursuing subtidal replanting as is being done in Canada and Alaska, and as is required on state forest lands after logging, the state instead has chosen to add further to the constraint in production - and lost revenues - by not requiring replanting after harvest. (This management decision puts additional pressure on the use of intertidal tidelands, putting these few remaining tidelands accessible to the public, with species unique to Puget Sound, at risk of forever becoming nothing more than industrial shellfish farms.)
Read about Alaska's subtidal planting here:
http://findarticles.com/p/articles/mi_hb5261/is_4_27/ai_n57283634/
(Note:  There is an additional risk to this philosophy, clearly identified in the increasing acidification of the upwelling deep sea waters which flow into these subtidal areas.  Increasing acidification prevents shell formation at the larval stage.  Perhaps this is why the wild populations are not "filling in" as expected.)

Investor frothiness may be the best economic indicator of a coming collapse:
1. Consider this article pointing to a frothiness to acquire money from investors:

http://business.financialpost.com/2012/03/19/will-jim-trelvings-wallet-clam-up/
2. A Canadian website describing geoduck as a "Bilogical Goldmine" which is devoted to garnering investor interest. http://genuinegeoduck.com/about/
3. A Canadian "reality show", the Dragon's Den (where entrepreneurs seek out investors) shows Jim Treliving (Boston Pizza) negotiating a $500,000 investment being sought for expansion of subtidal planting in British Columbia.
http://www.youtube.com/watch?v=y0GijMj7XFM&feature=player_embedded

Product supply constrained through artificial means and resultant inflated pricing is not sustainable. Product pricing with a significant component based on a culture's unfounded belief in a product bestowing virility is not sustainable (e.g., how many sharks have been killed for their fins; how many rhinoceros are killed for their horns). Geoduck prices will collapse whether from increased production through subtidal planting or the Chinese demand collapsing. Tulips and Internet stocks should have taught people a valuable lesson, especially when it relates to what species Puget Sound's intertidal tidelands will support in the future.