2026 Atlantic Sea Scallop Observer Compensation Rate Calculation Summary

We encourage vessel owners, captains, crews, industry representative groups, and the New England Fishery Management Council to review the calculation.

If you would like to provide feedback on this calculation, please send it to the following:

• By email to: Emily.Keiley@noaa.gov
• By mail to: Michael Pentony, Regional Administrator, Greater Atlantic Regional Fisheries Office, 55 Great Republic Drive, Gloucester, MA, 01930.  Please write “Comments on Fishing Year 2026 Scallop Fishery Observer Compensation Rates”

Compensation Rates by Fleet

The fishing year 2026 compensation rates for Limited Access (LA) vessels are:

• 0.20 lb per days-at-sea (DAS) fished (that is, the vessel will be charged 0.80 DAS for each DAS fished with an observer onboard)

The fishing year 2026 compensation rate for Limited Access General Category (LAGC) individual fishing quota (IFQ) vessels is:

• 200 lb for the first 24 hours in addition to the daily possession limit when carrying an observer. For trips that exceed 24 hours, the trip will be prorated into 2 additional 12-hour increments with each prorated increment receiving an additional 100 lb for a maximum of an additional 24 hours and 200 lb.

The fishing year 2026 compensation rate for Northern Gulf of Maine (NGOM) declared trip is:

• 125 lb per trip in addition to the vessel’s possession limit for the trip when carrying an observer

We selected these compensation rates because they should provide sufficient compensation for the observer fee while also providing sufficient observer coverage based on anticipated coverage levels needed for fishing year 2026. 

We calculated all observer compensation rates assuming an average daily rate of $813.75 for the observer, and used an average scallop price of $16.53 per pound for LA open area trips, $19.71 per pound for LAGC open area trips, and $33.98 per pound for NGOM trips. We estimate the compensation rates provide the following average buffers over the daily cost of the observer:

• $3,024 per day for LA Open Area trips;
• $3,128 per day for LAGC IFQ open area trips; and,
• $3,334 per trip for LAGC IFQ and NGOM vessels fishing on an NGOM trip

We intend for these excess funds to account for variations in the fishery, such as lower scallop price and landings per day fished (also called landings per unit effort (LPUE)), without creating financial incentive to extend an observed trip. 

PLEASE NOTE:  We may consider changing the compensation rate as we gather fishery information throughout fishing year 2026, such as scallop price, length of trips, LPUE, and overall rate of observer set-aside usage.

The following explains how we determined the fishing year 2026 compensation rates.

Compensation Rate Calculation

We evaluated a range of compensation rates. Table 1 summarizes the information we used in the calculation (see “Information Used in the Calculation” section below for details). 

Table 1:  2026 Compensation Rate Calculation

*Trips

**Buffer per DAS = Compensation per DAS minus the daily cost of carrying an observer ($813.75 per day).

Observer Coverage Levels  

The compensation rates above will support coverage rates that are higher than what is needed to cover Standardized Bycatch Reporting Methodology (SBRM) minimums. We try to balance the compensation rates and the associated observer coverage levels to allow for sufficient observer coverage while providing a compensation rate that has a neutral effect on fishing effort. For example, higher compensation rates supporting lower coverage levels provide a buffer between the cost of the observer and the revenue from the compensation that are very high. In turn, excess revenue from the set-aside could change fleet behavior in a way that we cannot predict. We watch this trend as the fishing year proceeds to determine if rate changes are necessary.

Information Used in the Calculation

The information used in this analysis represents the best available information regarding estimates of the amount of effort, catch, and scallop price. 

We used the information from analyses in the Council’s Framework Adjustment 40 document, which recommended management measures for fishing year 2026.  We also considered updated scallop price information based on the average price paid for scallop landings during fishing year 2025 for price estimates for fishing year 2026. 

The following explains the information that we used in our calculation:

Trip costs  

We have estimated daily fishing costs to be $2,200/day for limited access DAS vessels and $400/day for LAGC vessels. Although total trip costs may be higher due to increases in fuel and oil price and other increased operating costs, the daily cost of fishing has only a slight impact on the adjusted price (see below). For example, with a $2,200/day trip cost and $16.53/lb unadjusted price, the adjusted price is $16.22/lb in open areas (see explanation of adjusted price below). Increasing the trip cost to $5,000/day, the adjusted price drops to $15.83/lb, which has minimal impact on the compensation and buffer at a given compensation rate.

Adjusted scallop price  

The price of scallops was adjusted downward by approximately one percent to account for the cost of the extra time to catch the scallops or compensation DAS to pay for the observer. We based the adjustment on the estimated daily cost of fishing and the estimated LPUE. We established the adjusted price as a way to generalize the effect of costs when applied to various compensation rates and LPUEs (which affects the amount of time needed to catch the extra scallops or fish the extra days). To calculate the adjusted price, we subtracted the cost of the additional fishing time associated with the compensation from total revenues. We then divided the reduced total revenue by total revenue for the trip, equaling an adjustment factor. We applied this calculation to a range of compensation rates, prices, and LPUEs, resulting in an average of about a one percent reduction.