A News Analysis

Superior Fresh salmon 

If Alaska commercial fishing interests think they now have problems with tariffs stemming from the simmering trade war with China, they best not look too far into the future because the possibilities there are far scarier.

Consider this end of July pitch for farmed salmon from Amy Bailey, a food writer for the Festival Foods supermarket chain in Wisconsin:

“Six reasons you need to try this delicious fish:

1. “They’re grown right here in Wisconsin!
2. “They are grown without any antibiotics or pesticides ever. No contaminants or pollutants like you’ll find in the ocean.
3. “They’re high in Omega-3 fatty acids.
4. “Superior Fresh received the Highest Sustainability Ranking of “Best Choice” by the Monterey Bay Aquarium Seafood Watch.
5. “The fish are fed an organic diet.
6. “Amazing flavor!”

The “delicious fish” in question was the first from Superior Fresh, a Midwest aquaponics business that farms salmon and lettuce. While Alaskans were fretting over missing Kenai River sockeye, Superior was preparing to deliver its first batch of farmed Atlantics from a a 3.75-acre facility that celebrated it’s grand opening only a year earlier.

“Aquaponics is the symbiotic relationship between fish, beneficial bacteria, and plants,” the company says on its website. “In an aquaponics system, water from an aquaculture system is fed to a hydroponic system where the by-products are broken down by nitrifying bacteria into nitrites then nitrates. After the nitrates are utilized by the plants, the clean water is recirculated back to the aquaculture system with virtually zero waste. By creating optimum environments for all three of these living organisms, we are creating an efficient ecosystem that we benefit from.”

Think of futuristic, self-contained farms for space travel, and you’ll get the idea of what is going on here. Only this isn’t the future. This is the here and now, and Superior Fresh isn’t the only company diving into land-based, salmon aquaculture to end the complaints salmon net pens can cause pollution problems in marine waters.

Atlantic Sapphire, a Norwegian company, is building a land-based salmon farm in Florida of all places that it plans to be big enough to supply 10 percent of the current U.S. market. The Japanese are hard at work developing “bluehouses,” the fish equivalent of greenhouses, for use throughout Asia. And Norway just keeps growing and roboticizing its farmed fish industry.

Losing battle

Alaska for years tried to hold back the tide of farmed salmon with the pitch that “wild caught” salmon are better. It was once joined in that camp by the Monterey Aquarium, but it has now gone over to the enemy.

Six of its eight “Best Choice” salmon picks are farmed fish, and there are no Alaska salmon in that category.  The Aquarium’s Seafood Watch program begin re-examining its position in 2015 amid discussions of Alaskas large volume of hatchery ranched salmon marketed as “wild caught.”

The Alaska Department of Fish and Game has bragged about how “the hatchery harvests alone in both 2013 and 2015 were greater than the entire statewide commercial salmon harvest in every year prior to statehood except for 7 years (1918, 1926, 1934, 1936, 1937, 1938 and 1941).”

Despite all those hatchery fish in the mix, Alaska back in 2003 started pushing the idea that “wild-caught fish from Alaska, reared in clean, pollution-free waters is a healthy, natural food, rich in heart-friendly omega-3 fatty acids,” as the Alaska Journal of Commerce reported.

” ASMI’s (the Alaska Seafood Marketing Institute) new initiatives may not turn the tide against the flood of farmed salmon coming into the U.S. and overseas markets Alaska once dominated, but they may help Alaskans carve out higher-end niches among consumers interested in organic foods and the sustainability of natural systems.”

ASMI has since modified the fish-farm-bashing approach, given that most of the salmon processors that help fund the agency have diversified into farmed fish. ASMI now pitches “Alaska’s icy, pure waters and the abundance of natural food (that) give Alaska salmon unparalleled flavor.”

Processors, meanwhile, have moved a lot of their operations to Asia to try get processing costs down to compete with farmed fish at a more basic level – price point.  That is the reason they now find themselves in the middle of the trade war started by President Donald Trump.

Exactly how much salmon is headed and gutted in Alaska and then shipped to China for fileting and time-consuming removal of bin bones is unclear. So, too, the volume of Alaska salmon processed in China coming back to the U.S.

What is known is that Alaska exports about $1.3 billion in seafood to China every year. And that much of it is processed and shipped back to American consumers who spend $2.7 billion on the imports, according to the National Oceanic and Atmospheric Administration (NOAA). 

While Alaskans are fighting over who gets to catch what Alaska fish, the Chinese are turning a $1.4 billion profit on processing whatever does get caught.

Innovation needed

Nothing here looks very good for Alaska fisheries in the long run. Gunnar Knapp, the retired director of the Institute of Social and Economic Research (ISER) at the University of  Alaska Anchorage, has suggested the state needs to find ways to encourage innovation in the fishing industry, but it is a business largely locked in the past.

Commercial fishermen regularly fret about hanging onto the commercial fishing “lifestyle” when they should be worrying about how to keep their fishing operations economically viable. Meanwhile, they aggressively protest any transition of salmon stocks into tourist-attracting sport fisheries where the fish might in a few cases be worth significantly more to the state economy.

Alaska now attracts about 2 million tourists a year although many Alaskans don’t particularly like the idea because tourists get in the way. The Seward Highway heading south from Anchorage to the Kenai Peninsula now regularly features bumper-to-bumper traffic.

Still, the tourism industry accounts for $2.7 billion in direct spending and $4 billion in total economic activity, according to the Alaska Travel Industry Association, making it the state’s second biggest industry behind oil and gas development. 

Salmon are but a small part of that business, but one the state needs to consider along with changes to the commercial fishing industry to try to get more value out of a product facing ever more competition.

Alaska halibut prices soared after federal regulators reduced the number of fishermen and gave them more flexibility in when to catch and sell their catch. Daily troll-caught Alaska salmon are year-in and year-out the most valuable Alaska salmon, but commercial trolling is banned in most of the state.

The Canadians have put fishermen on individual quotas, a scheme similar to what federal regulators did with halibut in Alaska, based on total allowable catch numbers. Such plans eliminate the derby-like nature of fishery openings, and allow for longer fishery openings which make possible the sale of more “fresh-caught salmon,” generally the most valuable of the fish.

But at the end of the day, you still have to wonder how Alaska competes with “no contaminants or pollutants like you’ll find in the ocean.”

Can you say “Fukushima radiation,” which scares people even if it’s only a bogeyman, or The Great Pacific Garbage Patch”?

And what about that “organic diet” when wild fish are eating who knows what, including some of what is known like microplastics?

It’s nice to think powerful industries will exist forever in a current form because they’ve existed for a long time – like, say, newspapers – but the world doesn’t work that way. Technological innovation has a way of changing everything.

And the salmon farmers are now in a huge, second-wave of technological innovation which has big consequences for all Alaskans. Salmon were the oil of the territorial government.

As oil taxes support the state of Alaska today, fish taxes supported the territory of Alaska then. Those days are long gone. Corporate income, tobacco, motor fuel, mining and alcoholic beverage taxes – in that order – now bring in more revenue than fish taxes, although oil and gas taxes continue to comprise more than 60 percent of revenue, according to the state of Alaska.

Oil and gas plus the aforementioned taxes comprise more than 88 percent of state revenue. Fish taxes account for about 4 percent.

As the value of the fisheries goes down, the tax revenue also goes down, making the issue of fishery value a problem not just for fishermen but for all Alaskans.