The hatchery case

hatchery profitsWith winter closing fast on Alaska and discussions on the possible impacts of hatchery fish on wild salmon expected to continue into the season when many have little to do but talk, Prince William Sound salmon ranchers are actively promoting the value of their business.

A McDowell Group study commissioned by the Prince William Sound Aquaculture Corporation in September estimates the value of the region’s farmed fish, primarily pink salmon, at almost $125 million per year.

This is no doubt the PWSAC hatcheries have created a sizable fishery where there was only a marginal one.

“Five hatcheries in Prince William Sound (PWS), Alaska release more than 500 million juvenile pink salmon each year, constituting one of the largest salmon hatchery programs in the world,” University of Washington fisheries scientist Ray Hillborn and now retired state fisheries biologist Doug Eggers observed way back in 2000.

“Before the program was initiated in 1974, pink salmon catches were very low, averaging 3 million fish per year between 1951 and 1979.”

Harvests these days average about 45 million pinks per year, a 15-fold increase over the historic catch, according to the Alaska Department of Fish and Game (ADF&G). On top of that, the catch hit a record high of 92.6 million in 2013.

Prior to 1980, the entire statewide harvest rarely topped 100 million.

“Annual (statewide) commercial harvest levels in excess of 100 million salmon had only happened in six years (1918, 1934, 1936 to 1938, and 1941); only 6 percent of
the years prior to 1980,” according to the official state history of commercial fisheries.

For the Sound, the hatchery program has been a phenomenal success. As the 20th century was drawing to an end,  fisheries biologist Alex Werthemier and colleagues “concluded that pink salmon hatcheries in PWS provide a net gain of up to 25.3 million fish per year. They also noted that under certain worst case conditions there might be up to a 4.5 million annual wild stock yield loss due to hatchery releases. However, even under these conditions there still was a 20.8 million net gain in available pink salmon for fishery harvest in the region.”

As hatchery returns to the Sound continued to climb into the new millennium, however, questions arose both as to what millions of hatchery strays might be doing to the genetics of wild fish within PWS and what competition from the sheer volume of young pink salmon leaving the Sound might mean for other species of salmon.

Scientists looking for lingering damage from the Exxon Valdez Oil Spill in the Sound last year stumbled on evidence that the hatchery production was depressing returns of sockeye salmon to the Copper River.

“All sockeye salmon stocks examined exhibited a downward trend in productivity with increasing PWS hatchery pink salmon returns,” concluded the peer-reviewed study led by Northwest Fisheries Science Center scientists Eric Ward in Seattle. “While there was considerable variation in sockeye salmon productivity across the low- and mid-range of hatchery returns (0–30 million), productivity was particularly impacted at higher levels of hatchery returns.”

That study coupled with declining, average returns of sockeye to Cook Inlet and a peer-reviewed study suggesting pink salmon exert “competitive dominance” over other species led the Kenai River Sportfishing Association and other conservation groups to request the Alaska Board of Fisheries block further expansion of hatchery operations in the Sound and start a review of current farming operations.

Pressured by commercial fishing interests, the Board refused to do so, but the admission of Bill Templin, the state’s head fishery scientist, that ADF&G has no clue as to what is going on with salmon interactions offshore left some Board members uncomfortable. They said they want to re-visit the issue.

The comm fish lobby

Commercial fishing interests have long controlled the politics of salmon in the 49th state, but the hatchery issue has left them feeling vulnerable.

Alaska long ago banned fishing farming in the common form of pen-reared salmon, but both the state and commercial interests invested heavily in salmon ranching since the late 1970s.

The North Pacific Anadromous Fish Commission (NPAFC) report for 2017 pegged the U.S., led by Alaska, as the world leader in hatchery-salmon ranching with Japan a close second and Russia significantly behind in third.

Alaska pumped into the ocean some 1.6 billion of the 1.9 billion salmon stocked by U.S. hatcheries. Alaska hatchery output topped not only that of Washington, Oregon, Idaho and California, but of the entire North American West Coast including Canada.

Sound fishermen, their incomes now linked to hatcheries, have put on a full-court press to both underline the economic value of this aquaculture in the 49th state and to try to minimize those who’ve raised questions as to whether hatchery fish are suppressing wild fish numbers.

No sooner was the McDowell Report completed than they ran it to Alaska Fish Radio, a blog financed by commercial fishing interests.

“Prince William Sound hatcheries benefit salmon fishermen across Alaska,” it headlined above a story that reported “the state’s hatchery program, which has operated since the early 1970s, is the target of a small group of critics who claim the fish are jeopardizing survival of wild stocks on the Kenai Peninsula, and they want caps on hatchery fish releases.”

The reality is that fishery scientists have been raising concerns about ever-increasing stocking levels in the Pacific for two decades. Bill Heard, a hatchery advocate, was questioning hatchery expansion in 1998.

“Biological changes in size and age at maturity of some stocks have raised questions on the density effects of high abundance, and on the long-term well being and health of salmon stocks,” he wrote in a paper for NPAFC consideration at that time. “Changes in size and age notwithstanding, favorable ocean conditions for survival and growth, even growth at reduced levels, have produced historic numbers and biomass of salmon suggesting the evidence for limitations in the carrying capacity for these fishes is inconclusive.

“But little attention has been directed toward this issue in the ocean….Given biological concerns about ocean carrying capacity and socio-economic issues associated with record runs, should NPAFC member countries consider cooperative quotas to limit production of salmon around the North Pacific Rim? If implemented, each country could determine what portion of its quota would be derived from wild and hatchery production.”

Nothing came of the idea, and most of the research on ocean-carrying capacity in the years since has been directed at climate change. McDowell’s PSWAC report clearly outlines the profit motives that hamper cooperation on developing country quotas.

Vital profits

For about 220 salmon seiners in the Sound, the McDowell report says, “earnings over (the 2012 – 2017) period totaled $1.6 million, or an annual average of $265,000. Harvest of
PWSAC fish contributed about $682,000 – annual average of $114,000 – to this total.”

Commercial gillnetters, who focus more on sockeye, Chinook, coho and chum salmon, didn’t do as well as the seiners on gross, but the McDowell report claims PSWAC hatcheries put an average of $45,000 per year in the pockets gillnetters.

Given that seiners usually have a crew of three to five, and gillnetters are usually run by only a couple of people, and sometimes only the skipper, the latter might actually have done better on net than the former.

But the big money is in processing. A handful of processors each year buy, on average, just over $59  million worth of salmon from some 750 commercial fishermen with limited entry permits to fish PWS, according to McDowell; the processors then generate about $146 million on the sale of those fish.

Or, as the report puts it, “processors added $434 million in value to PWSAC-produced salmon over the 2012-2017 period. This value-added (or gross margin) is total value ($730 million) minus the cost of purchasing the fish ($296 million).

That doesn’t necessarily mean processors are getting rich. Salmon processing in Alaska is a labor-intensive, seasonal business with high overhead. Buildings and equipment must be maintained even in the long, off-season when there are no fish to process, and just finding people willing to work the “slime line” in the plants has become a problem in recent years.

As a result, the McDowell report says, “most PWSAC pink salmon is processed into frozen headed and gutted (H&G) form and shipped to a reprocessing facility. A declining portion of pink salmon are canned. In 2012 about half of all Alaska pink salmon were canned; in 2017 this proportion had declined to about a quarter.”

Most of the reprocessed salmon go through China, and many are then shipped back to the U.S. for sale. In Safeway’s frozen food section today, you can buy “wild Pacific” chum salmon filets labeled as a “Product of China” because that is where the finally processing takes place. 

Those fish could have come from Alaska, Japan or China, but it is common in other supermarkets to find frozen filets labeled as an Alaska caught “Product of China.”

“When fish are caught in U.S. waters and then processed in a foreign country that foreign country of processing must appear on the package as the country of origin,” according to the U.S. Department of Agriculture (USDA). “This processing usually takes the form of filleting and packaging the fish into the cuts you see in the grocery store seafood department or frozen food aisle.  However, if the fish was actually caught in Alaskan waters, retailers are also able to promote the Alaskan waters the fish was actually caught in, in addition to the country in which the processing occurred.”

A tough business

The Alaska-Chinese partnership is now, however, facing problems because of a U.S.-China trade war put tariffs on some fish and threatened tariffs on other.

Up until then, the relationship appeared to be working well.

Cheap Chinese processing helped keep Alaska’s ever shrinking number of processing operations in business and they, in turn, help keep commercial fishermen working. A 2017 McDowell report on ‘The Economic Value of Alaska’s Seafood Industry” reported “169 shore-based plants, 73 catcher-processors, and more than a dozen floating processors in 2016. “

The National Marine Fisheries serviced reported “Alaska had 660 (processing) facilities in 1989.” Over the years, fish processing plants in Alaska have come and gone and finally, in modern times, consolidated in or around a few communities – Kodiak, Dutch Harbor, Naknek, False Pass, Dillingham, Sitka, Cordova, Petersburg, Ketchikan, Sand Point and a few others.

The days of remote salmon canneries in Alaska have largely ended. An early history of the salmon canneries of in Southeast Alaska prepared for then-territories first Alaska Fisheries Board reported the “mortality… has been high. During the years, 1878-1949, covered by the following history, 134 canneries were built; 65 burned and were not rebuilt; five plants burned and were rebuilt; ten were moved to other sites; some operations were consolidated. There were 37 operating plants in Southeastern Alaska in 1949.”

Processors would argue they’re not in much better shape now. The continuing mortality in the state’s Panhandle is indicative of the broader statewide trend. Pelican Seafoods in the community of the same name on the outer coast of Chichagof Island shutdown in 2008. The Hoonah Packing Company Cannery to the east on the island has been converted into part of the Icy Strait Point cruiseship stop. 

PWS processors in 2010 asked the private, non-profit hatcheries in the Sound to seriously boost hatchery production to help them out.

“From 2000-2009 the average statewide hatchery pinks returns were 32.6 million in even years and 55.9 million in odd years – in both cases about 40 percent of total pink returns,” processors said in an “Open Letter to Alaska Hatcheries.”

“We would like production to increase to 70 million in both even and odd years over the next five years, which would bring hatchery production to roughly 50 percent of that total.”

The goal was not met, and hatchery backers now worry that pressure might be mounting to push production down instead of creeping it up. And that, they argue, could sink a cornerstone of the region’s economy.
















19 replies »

  1. I just read that 40 percent of all fish harvested from the sea is fed to pigs, chickens, cows, domestic cats, and farmed raised fish.
    I am wondering if this direction is sustainable for natural stocks of fish and if this current commercial demand is why we see a shift to lower grade salmon such as pinks in the majority of hatchery stocks?
    As the ocean looses biodiversity, the interconnect relationship between species dies.
    We are obviously losing biodiversity when we add a billion pink salmon to the water each year.

  2. Perhaps Bob, however a local Juneau gal just reported to the Chamber of Commerce here, that in SE Alaska, 47% of the mining employees live out of State. An even larger percentage of fish processing employees are also out of State, but they tend to be seasonal employees with low-paying jobs.

  3. Depending on today’s election results perhaps there will be a complete economic analysis that will include out of state migration of Alaska fishery dollars.

    • Perhaps Bob, however a local Juneau gal just reported to the Chamber of Commerce here, that in SE Alaska, 47% of the mining employees live out of State. An even larger percentage of fish processing employees are also out of State, but they tend to be seasonal employees with low-paying jobs.

  4. Funny how in the long list of benefits of Prince William Sound hatcheries, there is no mention of the benefits to the state government in terms of taxes and net revenues. No mention of how much the state underwrites the hatchery fisheries in terms of management, enforcement, research, and infrastructure.

    • Mavo: simply doesn’t have the time to do a full-on, cost-benefit analysis here, but someone should. as with all things in life, there are tradeoffs.

      the bombproof, 2-foot-high, two-pound tent in which you can stand up to get dressed and run a woodstove to stay warm doesn’t exist.

      the EVOS study indicates money is lost on Copper River sockeye to make money on PWS pinks. there is no doubt the mixing of those stocks with wild socks increase management costs in the Sound itself. the state has given the hatcheries money in the form of grants and use of the infrastructure the state built, and the state is heavily involved in financing the operations.

      a cost-benefit analysis would be interesting. i tend to think it would show a net economic positive for the hatcheries at this time, even if they are playing a role in suppressing Cook Inlet sockeye runs (or Chinook and coho there) as well as Copper River sockeye.

      a CI sockeye is worth three or four times per pound as much as a PWS pink, and sockeyes (generally) are much bigger, but in a pure $ game i wouldn’t be surprised if the huge volume of pinks still translates into pink value coming out ahead of sockeye value on the balance sheet.

      but who knows.

      and then, of course, you get into the social value questions. do the people who Stand for Salmon also Stand for Wild Salmon, or is a salmon-just-a-salmon to them?

      would they be willing to embrace the big economic engine that would be the Pebble Mine if Pebble was to build a massive hatchery to ensure salmon runs even if there was a mining disaster? and if not, what if Pebble was willing to build a number of hatcheries around the state to ensure salmon return to where people want them?

      • Craig, it is pretty apparent that the Stand for Salmon folks are standing for wild salmon since the ballot initiative is mainly dealing with salmon habitat relative to wild salmon. Practically all of Alaska’s hatcheries are right at saltwater and few are concerned with those hatchery fish’s habitat, other than (in general) clean ocean.

      • The stand for salmon folks don’t stand for salmon at all, some of the followers of the ballot measure have been conned into thinking ballot measure 1 is about salmon because that’s a nice easy slogan. Ballot measure 1 is not about salmon.

      • Bill,

        Thanks for posting that opinion piece, if I needed to read the opinion pages to form my opinion I would spend more time reading them. I chose to read the ballot measure, and form my opinion based on what it says, hopefully you’ve done the same.

      • Steve-O, you have formed your opinion on what you think the initiative says.
        That’s the difference IMO.

      • Yes Bill that is how I form my opinion, by informing myself about the subject at hand. Do you not form your own opinions, do you just let other people give you your opinions?

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