Stormy horizons

Good news for Alaska commercial fishermen:  Salmon last year ranked as the favorite fish at Japanese conveyor-belt sushi restaurants for the sixth year in a row, according to a survey by seafood processor Maruha Nichiro.

 

Bad news for Alaska fishermen: “Ninety percent of that salmon is imported from Chile and Norway, but its popularity is now spurring domestic fish farming,” Nikkei Asian Review reported earlier this month.

The report of Japanese domestic fishing farming might be the worst news of all.

Gunnar Knapp, the now retired director of the University of Alaska Anchorage Institute of Social and Economic Research, more than a decade ago wrote a book-length study on the radical changes then beginning in the global salmon business. It was a warning of what was to come.

About the only thing Knapp missed was a transition from ocean-based net pens to land-based salmon “bluehouses,” as one Norwegian company is calling its  $130-million, 380,000-square-foot variation on a greenhouse under construction in Florida.

Another such farm, again backed by experienced Norwegian fish farmers, is planned for Maine. And the Japanese are talking about designing similar farms for use throughout Asia.

Salmon farms are technologically evolving at the speed of the 21st century while wild fish harvest techniques along the West Coast of the U.S. remain tied to early 20th century gear. While the Norwegians turn increasingly to computers and robots to help manage their marine farms, some Alaska fisheries rely on gillnet technology more than 100 years old and an indiscriminate fishing technology that sometimes causes significant problems for the management of mixed-stock fisheries.

The only big change in Alaska commercial fishing in the past three decades has been the steadily increasing volume of Alaska salmon head-and-gutted in the state, and then shipped to China to be filleted and resold. The process significantly cuts production costs, but drains processing jobs out of Alaska communities.

“China is Alaska’s largest seafood export market in terms of tonnage and value, accounting for 35 percent of tonnage and 27 percent of export value in 2015,” according to a report prepared for the Alaska Seafood Marketing Institute. “However, it is estimated that approximately 80 to 90 percent of these exports are sold to secondary processors which re-export finished products to other global markets – primarily in Europe, the U.S., and Japan. Most of Alaska’s exports to China consists of frozen H&G
(headed/gutted) fish, which are then filleted in China where labor costs are considerably lower.”

Japan accounts for another 20 percent of Alaska export tonnage, according to the report, but the Japanese are trying to change that despite being handicapped by warm water.

Terrestrial salmon

GlobalAgInvestiing last year reported Mitsui & Co., one of the largest trading companies in Japan, paid $8 million for an 80 percent interest in FDR Japan Co., a new company trying to pioneer a recirculating system to enable land-based fish farming in Japan.

“Salmon-trout” operations, as the Japanese lump them, require seawater temperatures near 60 degrees, and Japanese coastal waters get warmer than that in the summer, making traditional, ocean-pen, salmon farming impossible, the Ashi Shimbun reported.

FDR thinks it has solved the problem with a closed-water system that uses artificially processed seawater. If the system works, it could revolutionize Japanese aquaculture that has to date focused on ocean ranching of salmon as in Alaska. The 49th state banned fish farming, but is almost as heavily into fish ranching as the Japanese.

“Ocean ranching of chum salmon commenced in (in Japan) the 1960s…(but) releases were dramatically increased in the late 1960s and early 1970s,” notes the Food and Agriculture Organization of the United Nations (FAO). “Since this seemed to yield good results releases continued to increase reaching the current level of about 2 billion smolts annually in the early 1980s….Annual harvests have increased almost ten-fold since the early 1960s.”

Alaska hatcheries release about 1.6 billion fry, the bulk of them in Prince William Sound. The salmon ranchers in Alaska face the same problems as those in Japan: The number of adult salmon returning from the releases vary from year to year, and the harvest is seasonal.

Fish farms can produce salmon year-round, provide them fresh to market on a schedule, and promote “locally grown,” a modern marketing trend.

“There’s no doubt that national interest in locally grown food is now leagues beyond a cultural trend,” writes Emily Payne at New Food Economy. “As of 2014, there were 8,268 operating farmers’ markets in the nation, up 180 percent since 2006, when the local food movement was already well underway, following a 200-percent surge from the period of 1994 to 2009.”

Yet more competition

The Japanese, however, aren’t looking at just local sales. As with the Norwegians building in Florida and Maine so they can market “Made in the USA” farmed salmon across the country, the Japanese are looking at bigger markets beyond the home island.

“Most of the salmon raised in Japan (now) goes to the local market,” writes Takumi Sasaki at Nikkei. “But Okamura Foods, a processor in Aomori Prefecture, northern Japan, wants to export. It hopes large-scale production will help it compete on price.”

Mitsui has even bigger plans, according Asahi. If the FDR technology proves up, Mitsui wants to build more land-based salmon farms in warm regions of Asia. Land-based salmon farms are on the leading edge of the technological revolution in salmon farming that includes a move to plant-based feeds that lower the costs of production, minimize toxins that can originate with fish meal from long-lived fishes, and end the criticism that fish farms are implicit in depleting the ocean’s forage fish.

“The most significant challenge facing feed production today…lies in the fundamental changes that ingredients are undergoing,” according to All About Feed, a website for agricultural businesses. “Traditionally, the protein in salmon feed has come from animal sources such as fishmeal and fish oil – both ideally suited to the needs of salmon and easy to convert into protein in the body. The fact that they are produced from wild-caught fish, however, makes them finite natural resources. Feeding wild fish to farmed fish is justifiably one of the biggest criticisms leveled at aquaculture and is a dubious practice from a sustainability perspective.”

Feed, the website notes, makes up about 50 percent of the operating cost for the average fish farm. Reduced food costs, increased product supply and growing competition are all factors that drive down price, which is good for consumers but not for Alaska commercial fishermen in a world where fish farms are already thriving.

Chilean salmon farmers this week reported 2017 profits up 17 to 82 percent over 2016, according to the Fish Farming Expert website. The Chileans also reported harvests were up 17 percent, but still short of the 2014-15 average. The Chileans have struggled with disease outbreaks and algal blooms, which are again causing problems this year.

The ability to isolate farmed fish from such ocean-related problems is another part of what is driving the move to land-based salmon farms. AquaBounty – the company made famous for the genetically modified, fast-growing salmon Sen. Lisa Murkowski, R-Alaska tried to get banned as “Frankenfish” – last year bought a land-based fish farm in Indiana.

The company still needs approval from the federal Food and Drug Administration before it can begin growing genetically modified fish, but the idea of doing that appeared to be gaining some local support in the Midwest.

A Muncie Star Press report fingered Local Farm Bureau leader Joe Russell, who has been growing genetically modified soybeans and corn for 20 years, as a supporter.

“If it’s deemed safe by all of the regulatory agencies, I’d be honored to eat the first salmon to come out of there,” he told reporter Seth Slaubaugh. “It basically comes down to giving consumers a choice. If they prefer wild salmon, fine. It’s just like eggs. I saw eggs at Meijer the other day — 49 cents a dozen for commercial, $4.99 for free range and $5.99 for organic. They’re all probably equivalent food value, but it gives consumers a choice.”

Russell’s simple market summary underlines the problem now hurtling at Alaska commercial fishermen. Price has a big influence on sales. Those premium free-range and organic eggs are trendy but account for only about 5 percent of the market for eggs in the U.S., according to NPR.

Some people will pay higher prices some of the time, and all people will pay higher prices if there is no choice. But most people want a decent product at the lowest price.

When it comes to salmon, salmon farmers already set the market’s base price, according to Knapp and other economists, and they are going to continue to do so in the future with prices expected to creep downward as technology, as it always does, lowers production costs.

None of this is good for Alaska commercial fishermen catching salmon with antiquated gear and often further handicapped by traditional fishing regulations focused solely on conservation with no thought as to economic efficiency.

More bad

Possibly even worse, at least from a future marketing perspective, is the increasing portrayal of finfish aquaculture as a good thing.

“Over the past three decades, the global aquaculture industry has risen from obscurity to become a critical source of food for millions of people,” Michigan State University professor Ben Belton and colleagues from University of Stirling in the United Kingdom and Wageningen University in Holland wrote in The Conversation earlier this month. “In 1990, only 13 percent of world seafood consumption was farmed; by 2014, aquaculture was providing more than half of the fish consumed directly by human beings.

“Most of it comes from a dynamic new class of small- and medium-scale commercial farms, the existence of which is rarely recognized. To understand the potential of aquaculture to feed the world, researchers and consumers need to appreciate how dynamic this industry is.”

Whatever negative light that Alaska fishermen have managed to shine on farmed salmon up to his point is inevitably destined to fade as people globally become more and more accustomed to eating farmed fish.

“Throughout human history most of the fish people eat has been captured from oceans, rivers and lakes,” Belton and the other academics note. “But the total quantity of fish harvested from these sources peaked in the mid-1990s due to overfishing and environmental degradation. Demand for seafood has continued to increase since this time, as urbanization and average incomes have risen globally. Aquaculture is filling the gap.”