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Alaska’s losing battle against farmed salmon

BY CRAIG MEDRED
CRAIGMEDRED.NEWS

Bristol Bay – Alaska’s highest profile salmon fishery – had a banner year, and yet everywhere in the global market Alaska salmon fisheries look to be in more and more trouble over the long-term.

A $2 to $3 dollar per pound commodity in the 1980s ($4 to $6 when corrected for inflation)Bristol Bay sockeye is today a $1 per pound commodity, and there is no sign the pricing is going to get much better. It could actually get worse.

Chilean farmed salmon production is again on the rise and production costs in South America are falling.

“AquaChile lowered costs by 13 percent in the first quarter of 2017, in line with other competitors,” Reuters reported from Santiago in mid-July.  “The company’s shares rose 60 percent in 2016 and 13 percent in the first half of the year to 323 pesos and could rise another 25 percent, Guillermo Araya, analyst at local brokerage Renta 4 Chile said.

“‘According to technical indicators, this stock I see easily at 400 pesos,’ he said. ‘(AquaChile) isn’t the only one that looks good, the whole industry does.’”

“Lower costs” and an industry that “looks goods” are about the worse news possible for the Alaska fishing business given that University of Alaska Institute of Social and Economic Research economist Gunnar Knapp in a 2004 report observed that the “costs of farming, processing and distributing Chilean coho salmon to the Japanese wholesale market are about $1.63, and that future costs are likely to stay at about this level.”

The 170-page report is full of charts that show farmed salmon production costs and global salmon prices trending steadily downward for two decades. The news out of Chile would indicate the trend is continuing.

Why does it matter?

Chile is number two in global salmon production with an output of close to 400,000 metric tons. Norway is number one at about 1.2 million metric tons. Alaska, in a good year, can challenge Chile for production, but generally ranks number three overall.

And it lags way behind Chile in production of the premium product – fresh and frozen filets.

[Read more at CraigMedred.news.]

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Suzanne Downing had careers in business and journalism before serving as the Director of Faith and Community-based Initiatives for Florida Gov. Jeb Bush and returning to Alaska to serve as speechwriter for Gov. Sean Parnell. Born on the Oregon coast, she moved to Alaska in 1969.

Latest comments

  • Medred is missing a key point. Organic quality. People will pay more for quality organic food. McDonald’s burgers have gotten a lot cheaper (when adjusted to 1980’s) CPI. But the demand for organic beef has skyrocketed in the last decade. By Medred-logic, organic beef would not exist because McDonalds steroid beef is cheaper. People are not as dumb as Medred thinks. And they prove this with their checkbooks at Whole Foods, the Natural Pantry and the organic produce section of your local grocery store. These same people will buy wild salmon, even if it costs more, and not pellet-fed, pen-raised fish.

  • We just have to educate more. campaign more, specially on POINT of SALE such as Restaurants, Supermarket and even on Schools ) on the GREAT advantages and BENEFITS of WILD, NATURAL and Sustainable Alaska Seafood

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