Buying fish


Investing Alaska Permanent Fund style, a salmon farm in Norway/Simo Räsänen, Wikimedia Commons

The state of Alaska might have banned salmon farming in 1990, but a investigation has found the state of Alaska now big into the salmon-farming business.

The Alaska Permanent Fund Corporation is invested in no less than seven of what the publication Salmon Business in 2017 identified as the world’s 20 largest salmon farming corporations. 

Among these companies is Norway’s Marine Harvest, by far the globe’s biggest producer of farmed salmon. It annually turns out nearly twice as much salmon as all of Alaska’s salmon fisheries combined.

The Permanent Fund holds more than 79,000 shares of Marine Harvest valued at about $1.6 million. The investment has increased its value by $657,000 since the Fund purchased it, according to its online portfolio.

The Permanent Fund’s investments don’t stop there, however. The Fund’s reach into salmon farms is global with multiple investments in Norway and Chile to the tune of about $6 million, and more than 40,000 shares of stock in Stanford LTD, a New Zealand-based company that has taken a leadership role in “sustainable fisheries.”

On the opposite end of the continent, it is farming Chinook salmon – kings to almost everyone in Alaska – which have “been recognised by world-renowned Monterey Bay Aquarium – who has named New Zealand King Salmon the world’s most environmentally sustainable farmed salmon,” the company website proclaims.

The Monterey Bay Aquarium was once aligned with Alaska commercial fishing interests in trying to kill salmon farms. The aquarium’s Seafood Watch program in 2011 advised consumers to avoid farmed salmon except for the very few coho (silver) salmon then being raised on land in closed-containment water systems.

Pressure from Seafood Watch led Target – the countries number-two, discount retailer – to pull farmed salmon from its 1,744 stores at the start of the decade.

“The Minneapolis-based company consulted with the Monterey Bay Aquarium to make its decision to remove farmed salmon from its shelves,” Seafood Source, an online trade publication, reported at the time. “Target called the decision an ‘important step’ to ensure that the salmon its sells is from a sustainable, environmentally friendly source.”

Three years later, Seafood Watch modified its position and said some farmed salmon were OK to eat.  And just days ago, the Minneapolis/St. Paul Business Journal revealed Target has quietly brought farmed salmon back into its stores.

“In a statement, Target said that farmed salmon could still be sustainable, and that it added the fish back to shelves last year using fish certified by the nonprofit Aquaculture Stewardship Council,” the online publication reported. “‘Currently it is the only major eco-certification for farmed salmon that has been benchmarked to perform to at least a Yellow Seafood Watch equivalency and now meets our sustainable seafood policy.'”


Selling salmon

“Sustainable” has become the buzz world in salmon markets these days. Norway’s Marine Harvest produces close to 400,000 metric tons of Atlantic salmon per year at farms in Europe and South America, and touts its efforts to do so as environmentally friendly.

“Impact on the environment is a key concern in all Marine Harvest’s activities,” the company says on its website. “Since 2008, Marine Harvest Group has worked with the World Wildlife Fund-Norway to strengthen its focus on sustainable aquaculture and to help shape and improve the whole industry’s environmental standards.”

The other fish-farming businesses in which the Permanent Fund has invested make similar marketing pledges as to sustainability. Those companies are:

  • Salmar ASA, a company based in Trøndelag in northern Norway with farms there and a half interest in Scottish Sea Farms. It is the fourth largest farmed salmon operation in the world producing about 130,000 tons of salmon per year.
  • Grieg Seafood ASA, a company based in Bergen, Norway with farms in the Rogaland and Finnmark regions of that country and in British Columbia, Canada and the Shetland Islands. It is the sixth largest producer of farmed salmon in the world churning out about 80,000 tons of salmon per year.
  • Multiexports Foods SA, a company based in Puerto Montt, Chile. Ranked seventh in terms of world production, its output about equals that of Grieg.
  • Bakkafrost P/F,  a Norwegian company based in Denmark’s Fareo Islands. The world’s eighth largest producer of salmon, it accounts for 55,000 tons per year.
  • Cia Pesquera Camanchaca SA, a Chilean company with its headquarters in Santiago and salmon and mussel farms scattered all along the central Chilean coast. Its salmon production ranks fourteenth in the world with an output of about 34,000 tons.
  • Norway Royal Salmon ASA, a company based in Trondhiem. It produces was ranked 18th in global production in 2016, but now reports a harvest of about 70,000 tons of salmon per year.

Combined with Marine Harvest, the companies in which the Permanent Fund is invested produce about 850,000 metric tons of salmon per year. Alaska wild salmon fisheries at their best produce about 250,000 metric tons, and most of this tends to be low-value pink salmon. 

The fish farms are focused on high-value, fresh, Atlantic, coho (silver) and king salmon.

“Everyday fresh fish is flown to Miami and Dallas where we package and ship it across the country,” Marine Harvest USA brags. “Our strategic plant locations enable us to ship fresh, never frozen fish anywhere in the US.”

Chefs across the country agree fresh salmon is the best salmon, which appears to have given farmed fish an edge.

After conducting a blind taste test of farmed and wild salmon in 2013, the Washington Post reported the farmed fish won “hands down.’‘ The top-rated fish came from Costco and Trader Joe’s retail stores, which do not disclose the suppliers of their fish but identified the product as Atlantic salmon from Norway.

Atlantic Sapphire, another Norwegian company,  is now trying to one-up Marine Harvest in the freshness game. It is building a $130 million land-based salmon farm in Florida from which it will be able to pull fresh fish to be shipped almost anywhere in the U.S. in a matter of hours.

Meanwhile, a former Marine Harvest executive is helping to build land-based salmon farms in China, a market coveted by Alaska fishermen, and the Japanese are plunging into land-based salmon farming with hopes of overtaking the monstrous production of Norway. 

Switching sides

Land-based salmon aquaculture is considered the gold standard of environmentally friendly salmon farming, but the operators of net pens have in many cases cleaned up their act.

Two net-pen operations are now rated “Best Choice” on the Seafood Watch list from Monterey  Bay. No Alaska salmon rise to that category.

Of a total of eight “Best Choice” options, six are farmed – including the two raised in the marine net pens Seafood Watch once abhored – and two are wild.

The latter are Washington state sockeye (red) and pink salmon caught in “lift nets,” or what that state’s Department of Fish and Wildlife calls a “reef net.”

Reef nets provide for “a selective fishery…in which bycatch is avoided altogether or able to be released alive and unharmed,” the agency’s website says. “…Reef nets stand out as the original and still the best in selective fishing.

“Practiced by the Indians of the Puget Sound region using materials gathered locally, reef nets are unique to the area. Modern materials and hydraulics have improved efficiency but the basic methods remain the same. Reef nets do not gill or surround salmon with a net. Rather they count on natural and manmade structures to lead the salmon into a shallow laid net which is then lifted and the fish spilled into holding pens.”

Alaska has no similar commercial fisheries although it introduced a commercial dipnet fishery on the Yukon River in 2013 to provide for the harvest of abundant chum salmon while allowing for the release of king salmon struggling to meet spawning goals.

Most high-value Alaska salmon are harvested with gillnets. Mortality has generally proven high when efforts have been made to try to free unwanted salmon species from the nets. The nets can to some degree sort salmon by size, but not by species.

More Alaska salmon are caught in purse seines than gillnets, but they are nearly all pink salmon, most of which go into cans. Sales of canned salmon are forecast to grow in coming years, but canned salmon are expected to remain a comparatively low-value commodity.

Pink salmon accounted for 63 percent of the 2017 Alaska salmon harvest, but only 25 percent of the value, according to the Alaska Department of Fish and Game. A catch of 141.6 million pinks was worth about half as much as a harvest of 52.4 million sockeye.

Most of the sockeye were harvested in hatchery-free Bristol Bay. Most of the pinks were harvested off Kodiak Island or  in Prince William Sound or Southeast Alaska, and about a third of them were hatchery fish. 

Some scientists have suggested the hatchery-boosted runs of pinks in those regions could be reducing and replacing wild runs of sockeye, Chinook and coho salmon – all more valuable species.

Though Alaska banned fish farming in the form of net-penned salmon, it encouraged and supported fish farming in the form of ocean ranching. Alaska fish farms would likely have created new, independent businesses. The ocean ranching operations started by the state are now run by collectives of commercial fishermen the state helped organize as regional aquaculture associations. 

“From a political science perspective, the Alaska controversy over salmon
farming is fascinating,” Brent Paine, wrote in a 1991 Oregon State University, graduate-level analysis of the state’s ban on fish farms. “The bitterness and rancor expressed in the debate reveals a profound ambivalence in our attitudes towards development and the extraordinary role that politics plays in the economy of a state. Allowing one industry to exercise veto power over another seems like third world politics. In a sense it is given Alaska’s history of fisheries development.

“We all remember how, in the early 1970s, Detroit automakers ignored the underlying trends in the marketplace in favor of short-term profits. Finally they lost so much of their domestic market share to higher quality Japanese imports they were forced to seek protection from the federal government through import quotas. Alaska currently is the General Motors of salmon producers. By not taking advantage of the salmon farming opportunity, and build a foundation for a future aquaculture industry with other marine species, the commercial fishing industry is in danger of becoming a victim of its own political power.”

Paine’s word turned out to be prescient. While Alaska commercial fishermen in many areas of the state are struggling to survive this year, salmon farmers now so dominate the global salmon market that wise investors like the Permanent Fund are banking on them for the future.

Laura Stine contributed research for this story.

12 replies »

  1. Craig, the research behind this report did not dig deep enough to reveal how Alaska’s ban on salmon farming began. If you want to know its roots–which this article does not come within light years of addressing, you might contact the person who, with a friend, originally got the ban ball rolling–yours truly.

  2. Seeing as one can’t here reply to a reply – to Stine – I reply it’s obvious that you don’t know what an ‘investment’ is. Having said that, you do realize that loans carry interest and save non payment, do add to the treasury when the state is the bank? That rate is currently at 6.75%. We can quibble about WHAT we fund, but I think like Elmer Rasmussen when it comes to investing in Alaska – make damn sure whatever the outlay is: they earn.

    • Monk,
      Until you use your real name, I have no idea who you are or what you really believe in.
      You can be some dam robot in Bethesda, Maryland that is programmed by the Carlyle Group to influence Alaskan politics…
      Funny how Alaskans all lost thousands in PFD’s while Rogoff’s husband made millions to manage our fund?
      I guess you and Rasmussen would say he “earned” it?
      Number one country invested in is China (technology)…
      Same group that just tried to hack into state government.
      This is not the America I was born into.

  3. More Hatcheries mean more fish-born diseases, more escapes of large aggressive farmed salmon that decimate wild salmon stocks. Norway’s Atlantic Salmon do not belong in the Pacific ocean, negligence of Norwegian Fish Farms already caused environmental impacts when Fish Farms collapse releasing diseases and diseased salmon that aggressively consume wild stock. Alaska passed a law Banning Fish Farms, yet fish farms are thriving and nobody is fining the illegal activities.
    The Forest of the Pacific Northwest developed their historic diversity and vigor health in conjunction with eons of Native salmon returning Upstream to spawn and die, becoming Nature’s fish fertilizer. Salmon from hatcheries will never return upstreams to replenish the forests. The forest fires in Alaska will not have the nourishment of the healing forces of nature, there will not be enough wild salmon to run up those streams and provide the god-given fish fertilizer that was available since the time of creation. Farmed fish will exacerbate the decline if ecosystems. Burn Forest will have little chance to recover without the natural cycle of salmon migrations. Fish farming is indeed an ecological and economic cover up for the historic decline and decimation in all wild fish stock within the ocean.
    Big money will have its way, but there will come a day…
    Remember, You can’t eat money.

  4. Thanks for this. I did not know. Very good news that the APFC is building expertise is this sector. Wild-caught Alaska salmon is precious to most of us but there aren’t really any institutional investment opportunities. Farmed salmon production will continue to grow. Farmed salmon is chicken. Nothing wrong with eating chicken and it is impractical economically and from a volume issue for people to put birds on the dinner table any other way. Pink salmon production will probably grow but that is unlikely for the more valuable fish. Wild-caught will be a smaller and smaller niche. There is nothing inherently wrong with niches, especially if you can increase the margin.

    At some point RAS and or closed-containment will make salmon farming benign in terms of the major concerns such as dead zones from feed and feces; escapement, illnesses and it will be no more political than chicken production. Then the decision will be purely economic. Since we suffer from a transportation disadvantage for much of our economic activity, salmon farming might not ever make sense in Alaska. We don’t have a dairy or poultry industry because the economics don’t work and maybe that will be true for salmon farming. For some bizarre reason we have this notion that it is wise and prudent to never use our financial assets for strategic purposes. Singapore and Norway succeeded because there are just lucky. Happy to learn our SWF is developing an understanding of the industry.

  5. Alaska has become the true modern “Africa” for globalists like Walker and Treadwell.
    Exploit our resources to foreign powers and reinvest the capital (PF) in other foreign economies.
    Meanwhile the “locals” face declining natural salmon runs, a budget deficit and Austerity measures like closures to their personal use fisheries and threats to cut healthcare for the poor…
    Why are no candidates speaking of investing the PF in AK?
    Just like in the book “Heart of Darkness”, Kurtz who has ventured too deep into Africa and learns the truth of what is happening all around him, there are only two words to describe the atrocities…
    “The Horror, The Horror!”

    • “Why are no candidates speaking of investing the PF in AK?”
      Steve, you can see how getting politics involved in PF investing would introduce an element of risk that would be unacceptable.
      By the way, have you seen the movie “Apocalypse Now,” that was based on the Conrad, “Heart of Darkness?”

      • Bill,
        Without starting to invest the PF in AK, “the level of risk” may prove unacceptable?
        Currently in state poverty, crime, homelessness, unemployment, meth and opiate addiction are making our location an “undesirable” place to raise a family or start a business.
        Yes, Apocalypse Now is a favorite movie of mine since my father was assigned as a “Bosun” in the Navy to run a PBR in the Mekong Delta when drafted to the Vietnam War.,_River

      • So why do we have over $150 million in state funds “invested” in commercial loans to fisherman and hatcheries?
        Why not farm fish in Alaska?
        You can even do it on land and grow lettuce with waste water from operation?
        The current set up is obviously not working…at least not for the “non millionaires”.

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