Bad to worse

fish trap

The ultimate fish trap, a recirculating aquaculture system as proposed by Nordic Aquafarms in Maine. 

More bad news for Alaska’s third-largest industry is coming out of Europe.

Dutch-based banking and financial powerhouse Rabobank, a global leader in food and agriculture financing, says the aquaculture business has grown by $100 billion in the past six years and is expected to increase by another $100 billion in the next decade, Aquaculture North America reported this week. 

“Aquaculture is the fastest-growing protein-producing industry” on the globe, says the report from RaboResearch itself.

“…In the last six years, aquaculture increased its value by another $93 billion (US),” the bank said. “As a comparison, before 2010, it took 15 years to grow by $84 billion (US).”

Aquaculture is largely banned in Alaska, though the state has been heavily involved in ocean ranching salmon which are then sold as “wild caught.” Increasing questions about that practice are being raised, however, with wild runs appearing to suffer at the expense of hatchery fish.

Meanwhile, the state that banned salmon farming decades ago hoping to control the market for salmon increasingly finds itself a bit player in that segment of the seafood business. It has tried to fight back with a campaign to market “wild” and “wild-caught salmon,” but seafood industry analysts note that as aquaculture continues to grow, farmed fish become ever more the norm.

Seventy-five percent of the salmon eaten today is farmed.

As farmed salmon have increasingly defined the mass market, they have pushed Alaska salmon into niche markets where prices are still constrained by farmed fish although Alaska fishermen have long counted on earning a premium in those markets as their salvation.

Today’s value?

How big a premium “Alaska wild” is now worth and how long any premium will last is unclear. University of Copenhagen PhD candidate Isaac Ankamah-Yeboah this year calculated an “organic price premium of approximately 20 percent,” but whether Alaska can capitalize on wild as organic is also unclear.

As salmon aquaculture begins a move to land-based farms using filtered and recirculated water, a pushback against “dirty” wild fish has already begun.

Land-based, farmed fish “are grown without any antibiotics or pesticides ever. No contaminants or pollutants like you’ll find in the ocean,” a writer for Festival Foods, a supermarket chain in Wisconsin, wrote this year in a pitch for the locally farmed Superior Fresh salmon being sold by that grocery.

The U.S. Department of Agriculture (USDA) does not at this time certify any salmon as “organic,” and organic certification has run into difficulty because both commercial fishermen and fish farmers want the label.

“Our brand sells the most sustainably farmed seafood in the world, which embodies the values and standards of organic and yet gets none of the benefit of an organic label,” Jacqueline Claudia, co-founder and CEO of LoveTheWild, told the Supermarket News in February. 

Wegman’s, an East Coast supermarket chain, sells salmon filets labeled “organic,” but the label is European and goes on farmed, Atlantic salmon filets costing $18.99 per pound. 

Farmed salmon lacking that label is available for $8.49 per pound. Alaska wild sockeye retails at $16.99 pound, but that price could be on the rise soon. A 10 percent tariff on seafood imported from China kicked in on Monday, and a significant volume of Alaska sockeye is now shipped to China for processing and then imported back into the U.S.

The high cost of processing Alaska wild salmon, linked in part to the seasonal nature of the fishery, is one of the many problems facing 49th state salmon producers. Farmers can build their operations around a steady, year-round supply of fish very similar in size that can then be run through automated processing plants that produce boneless, skinless filets in a matter of minutes.

Technology weighs heavily on the side of the farmers, which has led Gunnar Knapp, a fisheries expert and the former director for the state’s Institute of Social and Economic Research (ISER), to call for innovation the Alaska fishing business. But the industry faces significant constraints.


Built-in inefficiencies

It is, for instance, saddled with government-mandated regulations designed to share the wealth among a maxiumum number of fishermen. Gillnetters in Bristol Bay, the state’s richest sockeye fishery, are limited to boats of no longer than 32-feet in length to limit harvest capability. The lengths of gillnets in all fisheries are limited for the same reason.

“Will policies of regulated inefficiency eventually price Alaskan seafood out of global markets?” Knapp and former Alaska Lt. Gov. Fran Ulmer asked in a 2004 analysis of the Alaska fishing industry. “As noted above, the Alaska Legislature has the constitutional authority and responsibility to manage Alaska’s salmon fisheries for the ‘maximum benefit’ of Alaskans. But the legislature has neither assumed nor delegated clear responsibility, authority, and ability to restructure Alaska salmon management for the purpose of strengthening the economic viability of the industry.”

More than a decade on, the Legislature still hasn’t done anything to restructure the industry. Commercial fisheries in some areas – Cook Inlet among them – continue to be home to more commercial fishermen than the salmon runs can support given today’s salmon prices.

Drift gillnet fishermen in the upper Inlet averaged an income of but $28,192 last year, according to the state’s Commercial Fishery Entry Commission, and they will average far less this year after a disastrous sockeye season. 

The federal poverty level for a family of four in Alaska is $30,750. 

For most Cook Inlet commercial fishermen, the fishery has become a seasonal, part-time job, but they still lobby vocally and heavily to keep any salmon catch from shifting toward what has become a highly valuable Kenai Peninsula tourism industry.

Market adaptation is difficult in Alaska fisheries. It is much easier in the salmon farming business where capital is free to gravitate to new financial opportunities.


Headed ashore

“On a projection screen in front of a packed room in a coastal Maine town, computer-animated salmon swim energetically through a massive oval tank,” Laura Poppick wrote for Scientific American in a Sept. 17 story forecasting a sea change in salmon aquaculture. “A narrator’s voice soothingly points out water currents that promote fish exercise and ideal meat texture, along with vertical mesh screens that ‘optimize fish densities and tank volume.’ The screens also make dead fish easy to remove, the narrator cheerily adds.

“The video is part of a pitch made earlier this year for an ambitious $500-million salmon farm that Norway-based firm, Nordic Aquafarms, plans to build in Belfast, Maine, complete with what Nordic says will be among the world’s largest aquaculture tanks. It is one of a handful of projects in the works by companies hoping these highly mechanized systems will change the face fish of farming—by moving it indoors.”

The businesses making these moves do face hurdles, RaboResarch noted.

“Improved genetics, new husbandry technologies, and innovations in aquafeed will be the three key factors determining aquaculture’s future,” its report says. “Further long-term growth in the sector can only be achieved through modernisation and professionalisation, while maintaining a strong respect for the environment and local communities.”

But changes are coming fast. Some farmed salmon could soon be moving to a trout diet – flies.

A South Africa based-company called Agri-Protein is now running the largest fly-farming business in the world.

“We take waste and convert it into our three products — one of which is protein,” Jason Drew, the company’s CEO, told CNN earlier this months. CNN reported the company has raised $105 million in capital this year and is now valued at $200 million.

Ankamah-Yeboah has already examined a key market issue surrounding the new feed source.

“Consumer preferences for fish products produced from insect-based protein sources does not significantly affect majority of the consumers choices,” he reported, “which may allow the scarce standard feed substitution and lessen pressure on fishery resources.”

One of the biggest complaints against salmon farms has been that they increase the harvest of forage fish in order to produce salmon-farm feed. The shift to alternative food sources counters that complaint just as the move to land-based facilities undermines accusations salmon farms can pollute local waters.

Technological advances have powered the industry, and Alaska commercial fishing businesses have found themselves on the wrong side of the technological curve.

The response of one Alaska commercial fishermen looking at the direction in which the salmon business is moving was simple: “Close to time for me to retire.”

On an individual level, that might be a good out. On a state economy level in a state where commercial fishing remains an important industry and vital in rural, isolated, already struggling communities, this is all nothing but bad news.


14 replies »

    • if i had a narrative i was pushing, Joe, this would actually fit nicely. when a die-off or other accident happens inside a RAS farm, there is nothing to see.

      but i have no narrative. i don’t think these guys are going to save the world or destroy the world. i think they are what they are, and the story for Alaska is not about them but about us.

      a screw up at a B.C. salmon farm isn’t going to change the way the Norwegians, Chileans or others do business. it is to them a business loss and a temporary environmental problem to deal with and then back to work. this is pretty much the way farmers of all sorts think.

      it hasn’t changed modern agriculuture (see the Gulf of Mexico’s ‘dead zone’) and it won’t change aquaculture. it might, however, encourage more RAS farms.

      unfortunately, more RAS farms aren’t exactly good for Alaska; they’re bad for Alaska. the comparison here would be all those salmon killed by heat in Alaska. the RAS farmers can point to that the way you point to this and say, “eat locally grown salmon and help save those Alaska wild salmon already struggling to survive climate change!”

      as my lastest RAS story observed, the best Alaska can hope for is a massive failure in RAS tech, but that will probably only buy us time. never bet against tech.

  1. Craig, I’m a little confused. Are you saying that Alaska should jump into farming salmon knowing that there are no viable wild salmon fisheries where there are large scale farmed salmon operations? It seems a little crazy that you are worried about salmon hatcheries but in the same breath think we missed the boat not getting into farmed salmon. Maybe you think we should jump into the onshore salmon farms, but I think we would have a distinct disadvantage with our climate and geographical location. I won’t argue that as a commercial fisherman we have had some stiff competition with fish farms, but I can’t comprehend how having Alaska salmon farms would have helped. On shore, off shore…or are you just spreading the good word that Alaska salmon and fishermen are screwed? 2018 wasn’t the best season for a number of fisheries in the state, but the last 10 years on the whole have been pretty good. Sometimes it feels like you are cheer leading for the state’s fisheries to fail. I’m not too worried about onshore farms. I’m happy to see that they are getting the problems like sea lice infestations, dead zones from fecal and feed collecting on the bottom, escapement on small and epic scales into wild spawning areas that previously had no Atlantic salmon, and areas of shoreline that were available to the public for recreating. You really think Salmon farms in Alaska are a good idea? Really?

    • Danny: what i know is everything evolves or it dies and this applies as much (possibly more) on an economic scale as on a biologic scale.

      our harvest techniques are inefficient by design. that was for years a good thing. it’s not going to last. industrial agriculture has trumped wild harvest everywhere in the world that they’ve come into competition.

      wild harvests invariably shift to niche markets where you can maintain high prices at low volumes, but you don’t find high prices at high volumes because the high-volume producers – be they in beef, chicken or salmon – put a cap on the market.

      a rare, niche product – say “first of the season” Copper River salmon – can climb well above that cap, but the more common the product becomes – say Bristol Bay reds – the more it has to compete with the other volume producers, which are in this case farmed fish.

      if the past is precedent in beef, chicken and pork. the comparative costs of farmed versus wild will slide steadily downward. it would appear unlikely Alaska salmon prices will keep place with inflation from here on out. so our resource will get progressively less valuable.

      some of that can be repaired with efficiency. i’d guess as time goes on, a larger and larger portion of Alaska’s hatchery component of returns will be taken as “cost recovery,” which is highly efficient, and those hatcheries will increasingly become more business like.

      but i don’t think that’s the greatest threat to Alaska commercial fishermen. that’s almost sure to come from aquaphonics with its land-based farms producing salmon raised in filtered water and fed government-certified organic food.

      the question then put to urban consumers is this: “which would you rather eat? that fish or something that has spent it’s life in a dirty ocean eating God only knows what?”

      i fear the answer of many of them.

      i don’t know if salmon farms in Alaska are a good idea or not. i do know we shouldn’t be so goddamn closed minded about new ideas in this state. we’re now shipping large volumes of fish meal to China. could that fish meal be used at job-creating Alaska fish farms instead?

      i don’t know, but we should be looking at it. and much the same can be said for aquaphonics. is an aquaphonics business supplying produce and year-round fresh salmon to Anchorage viable in the MatSu valley? beats me, but we’ll never find out with the opportunity foreclosed.

      nobody thought brewing beer in Alaska made any sense either until Alaskan Brewing wenn and produced some amber in isolated, out-of-the-way Juneau. and now look….

      Alaska’s ban on fish farming was nothing but economic protectionism. protectionist measures never work over the long term. economies wiggle around them. Alaska’s fish farm ban helped push salmon prices sky high for a brief period. the sky high prices helped encourage the development of the fish farms that now produce more than 70 percent of the salmon eaten in the world today.

      that percentage will keep growing, and when Alaska loses market share or market representation due to, say, a bad year like this one for sockeye around the east Gulf coast, getting back share or even market entry could prove a struggle.

      modern supply chains rank reliability high on there list of important standards to be met. we’re not reliable. it’s a problem.

      we need to be looking at all of these issues and discussing how best to manage them.

      seiners in Southeast have already done that. they bought back permits to reduce the fleet. we should probably do that in some other fisheries as well. and we should probably consider ways to make some other fisheries more efficient and/or more operationally efficient for processors – ie. a steady stream of fish through the plant versus pulses of fish.

      and in places like Cook Inlet, we should be looking at solid economic information to decide where we get the most value per pound out of our salmon. there might be situations in which we actually get a better financial return out of people catching sockeye and hauling them south through the Anchorage airport in visible coolers than in packing up the fish by the tote and shipping them south invisibly.

      it’s nice to think can stay the same forever, but the reality is that they can’t. just ask my colleagues in journalism.

  2. While the rest of the world moves on, Alaska will invariably continue bickering about wild vs farmed Salmon.

    We better face it now, Frankenfish are going to feed the world into the future. We can do both farm and wild, however without farmed production in Alaska we will become bit players.

  3. Hi Craig,
    You have officially jumped the shark. As for myself, the ADN just banned me for 6 days. I simply stated the truth that I was one at that party who whipped it out as a joke which was very well received at the time. You understand the nuance? Right?

  4. i didn’t know salmon lived to be 15 years old, Bryan…

    salmon are also naturally white. they might or might not develop red flesh depending on what they eat.

    the red coloring comes from a build up of astaxanthin, a carotenoid, in their flesh. the chemical is produced by algae. shrimp and krill eat the algae. salmon eat the shrimp and quill and squid and viola, they turn red.

    but not all salmon get enough astaxanthin. “white king salmon” are white, and considered something of a delicacy in some parts of the world, and i’ve encountered very pale – nearly white pink salmon – and a rare red salmon or two with white flesh.

    the latter was a little creepy.

    farmer feeds their fish astaxanthin, the same thing the wild fish eat, to turn them red.

    • I am not advocating one way or the other between farm raised or wild but, I while I’d eat both, “wild” does have more appeal. Obviously farm raised encounter more stresses than wild.

      “Fish tend to accumulate potentially harmful contaminants from their environment.

      These contaminants are found in the water they swim in, as well as the foods they eat (1, 11).

      But farmed salmon has much higher concentrations of contaminants than wild salmon (12, 13).

      European farms have more contaminants than American farms, but species from Chile seem to have the least (1, 14).

      Some of these contaminants include polychlorinated biphenyls (PCBs), dioxins, and several chlorinated pesticides.

      Arguably the most dangerous pollutant found in salmon is the PCBs, which are strongly associated with cancer and various other health problems (15, 16, 17, 18).

      One study investigated over 700 salmon samples from around the world and found that on average, the PCB concentrations in farmed salmon were eight times higher than in wild salmon (19).

      Those contamination levels are deemed safe by the FDA but not by the Environmental Protection Agency (EPA).

      Researchers suggest that if the EPA guidelines were applied to the farmed salmon they tested, recommendations would be to restrict salmon to no more than once per month.

      However, many argue that the benefits of consuming Omega-3s from salmon outweigh the health risks of contaminants, which is a reasonable assumption.”

  5. Yummy!!!

    The majority of salmon on the market is farm-raised, meaning it’s farmed and harvested under controlled conditions in sea cages or net pens. The problem, according to some researchers, is that the crowded conditions of most farms can cause contamination. A 2003 report from the Environmental Working Group (EWG) found that seven out of ten farmed salmon purchased in grocery stores in San Francisco, Washington, DC, and Portland were contaminated with cancer-causing polychlorinated biphenyls (PCBs) at “levels that raise health concerns.”

    Additionally, farmed salmon has been found to contain toxic chemicals methylmercury and dioxins, and farms have been accused of polluting the oceans, fostering disease, and spreading sea lice. Salmon farms have also been criticized for other questionable practices, including the content of the feed, which is often supplemented with chemicals to give the fish their pink color (wild salmon develop it naturally).

    • Bryan,seems like your stuck in the decades old battle of wild/farmed debate.
      Its been settled by market share(just not here).
      The importance of this reaccuring(sp) theme is the coming socio economic impact on the state.
      Craig id say your about 5-7,maybe 10 years ahead of the curve.
      But we’re like deer in the headlights.
      Think substance abuse rates are bad now just wait…

      • David, I think CreigMac said it best “Frankenfish are going to feed the world into the future.”
        That is the driving force here. An ever growing world hunger problem. Obviously, farmed fish for that purpose is no different than many other innovative ways to address the ever growing demand. Would I equate farm raised salmon to wild? No, as a consumer I wouldn’t. Also, think about it, “Alaska – The Last Frontier” or “Wild Alaska”. When people think of Alaska they naturally think “wild salmon”. When I go into a place of business and I see “wild Alaskan Salmon” on the menu it creates a natural tasty image. But, I guess in reality 40% of “wild” salmon is actually farmed. I guess wild Alaskan Salmon would still reign supreme but, I just can’t imagine the image of not getting diluted. Does Alaska need to farm to be competitive? I assume so. Why stop there though? Get some high fencing, grow some bone, and offer the canned Alaskan moose hunt.
        To answer the question, yes, I think farmed salmon is not as healthy as wild “due to the fact that farmed salmon are often fed ground-up fish in their food (yep, you read that right), they may contain more of a contaminant called PCBs, which animal research links with an increased risk of cancer, notes Gorin. However, use and production of PCBs in the United States have been banned for decades, per the FDA. The EPA says that while levels of PCBs are declining in the environment, consumption of contaminated fish over an extended period of time can still pose a health risk.”

Leave a Reply