Commentary

Where goes Alaska

 


Alaskans are yet again fighting over who gets to catch the state’s limited supply of salmon,
and the rest of the world is marching into the future not caring at all.

The Chinese have accomplished proof of concept on salmon farming offshore in the Yellow Sea and are now planning large-scale cultivation of pen-raised fish.

Give them a few years to fully figure out this business, and maybe Alaskans will be able to buy cheap, Chinese fish at prices that will end the fighting between Cook Inlet commercial fishermen and the state’s personal-use dipnetters.

Made-in-China cheap salmon might make it sensible for the residents of the Anchorage Metropolitan Area to just go to Costco and buy fish, as was suggested at the latest meeting of the Alaska Board of Fisheries, instead of going to Costco to spend $115 on made-in-Alaska dipnets before spending another $100 or more – sometimes way more – on dipnet paraphernalia ranging from waders to dry suits, coolers, filet knives, four-wheelers, boats and God-only-knows-what else, like maybe a circus tent to erect on the Kenai River beach to shelter yourself and friends when not fishing.

And then there’s the money spent on gas to drive to Kenai and more money spent to park in Kenai and more money spent to buy things in Kenai because you can’t hardly drive hundreds of miles without stopping to eat or enjoy a cup of coffee.

And lastly even more money spent to buy ice to put the fish on if you’re lucky enough to catch a salmon.

Against this backdrop, a quick drive to Costco to buy some farmed salmon – which, by the way, has been winning blind taste tests – doesn’t look so bad.

Unfortunately, Costco, for all the good it does Alaskans, doesn’t do much good for the Alaska economy. Cheap, tasty Chinese farmed salmon or Norwegian or Chilean or Scottish or Canadian or Floridian salmon might be individually great for you and me, even if I would prefer to catch my own wild fish.

But if cheap farmed salmon undercuts the market for Alaska “wild caught” salmon, Alaska overall loses. And the market has already been undercut. Alaska salmon prices peaked at more than $3 per pound for Bristol Bay sockeye in 1988.

Two decades later, the same fish were going for $1.30 to $1.70 per pound even though the 2018 dollar was worth less than half of what it was worth in 1988. Put another way, the $3 per pound paid for Bay sockeye in 1988 equaled $6.43 per pound today.

Only that isn’t the going price. Instead, Bristol Bay sockeye are worth about 25 percent of what they were worth back then.

Realities

This is about as likely to change going forward as the longhorn steer making a comeback as the U.S. beef of choice.  Commercial fishermen do not like to hear this.

Commercial fishermen in the 49th state – most especially those in the Inlet at the doorstep of the state’s largest city – are loath to recognize the many ways Alaska has changed in the new millennium, let alone the many ways the world has changed.

They live in some Neverland where if only they could only catch evermore salmon the world of yesteryear would live on forever and ever. It won’t and it can’t.

Phase two of the Chinese foray into salmon farming calls for a pen capable of producing 45,000 tons of salmon per year from a pocket of cold water located about 130 nautical miles off the shore of Rizhao in eastern China’s Shandong Province, Xinhua reported late last month. 

That is a production level near the 1.9 million sockeye salmon harvest the Alaska Department of Fish and Game is predicting for the Inlet this year.

The 80 meter (240-foot)-tall “Shenlan 2” cage is more than twice as tall as the “Shenlan 1” cage which demonstrated the feasibility of Yellow Sea salmon farming in the world’s first fully submersible cages.

The project backed by the Ocean University of China and two Chinese firms involved a reported investment of $643 million. China is the global capital of “state capitalism” making it impossible and also somewhat irrelevant to untangle where the university investment ends here and the business investment begins.

At the end of the day, all of it is basically Chinese government investment, and the Chinese government is buying big into aquaculture as Norwegian and Chilean business have already done.

Alaskans might like to believe their free-ranged-chickens of the sea are the best tasting salmon in the world, and they might be. But it doesn’t matter. Farmed fish are the 750-pound gorilla in the room, and the gorilla just keeps growing.

Future fish

“Another (Chinese) government-backed farm aims to annually produce 20,000 tonnes in an inland recirculating aquaculture system (RAS) facility in Ningbo, eastern China,”  Gregg Yan and Jonah van Beijnen reported at The FishSite in January.

“There are ever-growing opportunities for collaboration as many of these projects are conducted with the aid of European aquaculture experts and technology providers.”

The Fish Site covers commercial fisheries in general, but has its focus on aquaculture which now provides 53 percent of the world’s seafood and is steadily increasing market share.

Seventy-five percent of the salmon consumed around the world today is farmed fish. And that percentage continues to creep upward with fast-growing, genetically modified salmon – the Frankenfish of the nightmares of Sen. Lisa Murkwoski, R-Alaska – wiggling every closer to the market every day.

Frankenfish are already in supermarkets in Canada, and the company which produces them – AquaBounty – has now gained permission to import GMO salmon eggs into its Indiana hatchery.

The New Food Economic website on Monday billed this as “effectively clearing the way for the country’s first GMO seafood—and first commercially raised GMO animal—to come to market….The company’s proprietary breed of fish is modified to contain genes from Chinook salmon and an eel-like creature called an ocean pout, which allows it to grow twice as fast, on less food, than a normal Atlantic salmon.”

Murkowski remains unhappy about the U.S. Department of Agriculture requirement the fish be labeled “genetically engineered” when sold. She managed to block GMO salmon in the U.S. while a battle was fought over labeling, but it was only a delaying tactic.

In a statement in January, she said labeling at least serves to inform consumers and then continued to attack GMO salmon.

“When you splice DNA from another animal and combine it with farmed salmon, you are essentially creating a new species, and I have serious concerns with that” she said. “If we are going to allow this fabricated fish to be sold in stores, we must ensure there is at least clear labeling. Americans should not become test subjects for this new product without their full knowledge and consent.”

Whether consumers care remains to be seen. GMO foods are now everywhere. As far back as 2011, the International Service for the Acquisition of Agri-biotech Applications was reporting that in the U.S.  95 percent sugar beets, 94 percent of soybeans, 90 percent of cotton and 88 percent the feed corn was GMO product, according to USA Today.

There have been pushbacks against GMO foods, and then pushbacks against the pushbacks.

“Between 1996, when they were first introduced in the United States, and 2015, GE (genetically engineered) crops were planted on a total of almost 5 billion acres in 28 countries,” writes Guy Crosby in the Harvard Public Health Review. “To put this into perspective, the entire landmass of the United States covers 2.3 billion acres.

“Not a single case of human illness resulting from food produced from GE crops has been reported. It is time for the world community to overcome the fear of genetically engineered food and unleash this incredible technology to solve the environmental issues of agriculture and produce enough healthy food for a growing population. It’s time to leave the island.”

Crosby is a clear, scientific advocate for genetically manipulating food to increase production; others are not. It probably doesn’t matter. The history of the human world is that if a food product can be produced cheaply at a quality even close to the prevailing standard, it will become dominant.

McDonald’s might not have the best tasting burgers in the world (Southide Bistro in Anchorage makes a better one), but McDonald’s sells more burgers than any other business.

Why? Price point.

People are frugal, and that’s the problem.

People will buy the salmon they can afford to buy if the price is affordable and the product is reasonably good. Alaska can’t compete there in the run unless it improves harvesting efficiency, which will take government action, and processing efficiency, which will take private capital.

And even then, the commercial fisheries will be able to support smaller numbers of fishermen as an economic reality. It has long been obvious that the road accessible parts of the state should be finding some way to transition from a commercial fish harvesting industry to a tourism-based model.

But people generally hate change, and many Alaskans appear no different.

They’d rather fight and die holding onto old ideas than try to move toward a new future. To a large degree, it is the simple reality of evolution. Alaska would seem to have much to gain by developing a wise salmon policy for the future, but then that’s way easier to say than to do.

 

 

 

 

 

 

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16 replies »

  1. i will spice it up here since Craig is too tired for a new story and everybody is bored.
    I agree with Craig it is time to go back to the fish traps.Each river will have its communal fish trap where superior specimens are allowed through (such as mother hen Kings) The fish trap on each river will be a communal asset operated as a co-op.No fish will go to waste!

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  2. Wow, that list of expenses incurred by a dip netter pales in comparison to what I spent in Kenai on my set net crew of 6 last year. After taking into account my pathetic catch on only a short handful of fishing days, I lost 31K when I factor in the minimum salary I pay for each guy regardless of how many pounds we catch, food, crew license, gear, permit/lease renewals, new nets/net repair, purchase of a used pickup/boat trailer/ used outboard/5th wheel trailer, etc. That doesn’t included what the guys spent on sight seeing/day trips, golfing, movies, souvenirs etc ( a lot I imagine as we had LOTS of time available since we fished so little). How many days did a dipper or sporty get shut down last year? ONE DAY! The sport fishery was closed down ONE DAY early for reds.

    Please don’t discount the amount of money poured into the local economy by the comm fisherman as its a staggering amount.

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    • well that would explain a lot of those latent permits, wouldn’t it?

      nobody with any economic sense discounts the amount of money poured into the local economy by anyone, but the economic reality is this:

      the more inefficiently a fishery operates the more money it contributes to the local economy right up to the point it becomes so inefficient it goes out of business and ceases to contribute to the local economy.

      that reality is the reason the state of Alaska has all kinds of rules intended to do nothing but limit the efficiency of commercial fisheries. given the competitive salmon market of the future, some of those out-of-date rules in some places need to go away and fleets need to be consolidated if the commercial fisheries are to continue as viable businesses rather than hobbies.

      and in some places where the commercial fisheries have become largely hobbies already, the fisheries need to be scaled back to rational numbers and harvests constrained so as to transition fish into even more inefficient and yet viable non-commercial fisheries that can produce more economic return per salmon than the commercial fishery.

      if, of course, one cares about maximizing, in-state economic return. Alaska could always go back to the old model, too: downsize the population by about half and maximize harvest efficiency for a lot of people coming north from Outside in the summer to grab resource value and head south at the first sign of termination dust.

      that was pretty much the fisheries model in the fish-trap days of pre-Statehood, and it worked quite well as a market entity. traps were efficient, and they captured fish in way that made it easy to ensure quality. had Alaska kept the traps, it would actually be in a better position to compete with the farmers than it is now.

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      • How come there has been no mention of the set net buy back within your column? You mention fleet reduction and here is great opportunity to downsize by about 40%, the east side set net permits. This can both make those permit holders who opt to continue fishing be less of a “hobby” as you say and put more fish up the river. Or perhaps there is no interest on your part because you just want the comm fish industry in the Inlet to disappear so offer no support of this? I honestly don’t know where you stand on this but it seems to me to be a great way to get rid of almost half of the permits fished on the East side and help satisfy the needs of the dippers/sporties.

        I’m not yet sure where the funding is coming from to support this buy back but I for one would be willing to be taxed (like the SE seiner buy back program) to promote it. Perhaps if guides/sporties/dippers wanted to support this also, there could be a small tax paid on license purchases and the pay back would be more fish up the river for their use? Just thinking out loud here…..

        Regarding the “hobby” comment. I can’t think of any hobbies I’ve participated in that have earned any money at all. I see my set netting as simply a part time job not a hobby as I typically make money with my efforts. Nor do any of my fellow set net friends come any where close to earning a living on 5 -7 weeks of work but instead use set netting to supplement their incomes from slope work, education jobs etc. Summer set netting is no different than say a guide job in that its seasonal part time work where hopefully you can make a few bucks and add support to the local economy….

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      • i didn’t mention the permit buy-back plan because it still appears pretty vague. i do, however, think it is a good idea for that fishery. i’m not sure it has much affect on the other fisheries.

        even if 40 percent of the permits are gone, the fishery will still have the harvest capacity to mop up every harvestable fish at current run sizes. but fewer people competing for those fish in the setnet fishery would clearly be good for setnetters.

        “hopefully you can make a few bucks” is pretty much the definition of a hobby, “an activity or interest pursued for pleasure or relaxation and not as a main occupation.”

        you make a few bucks. the average dipnetter offsets his food budget with a few fish. the value of the fish isn’t much different. you just convert your fish to cash which makes it easier to value in the market.

        we don’t know the value of the dipnetter’s catch. it has some value greater than zero, but since no one has bothered to study it we don’t know what value. the value might be very low, in which case there’s a good argument for cutting back on the harvest in that fishery (although it was pretty damn low last year.)

        the value might also be a lot higher than i think. the dipnetters i know personally are pretty damn efficient, but then they’ve been doing it for a long, long time and most of their investment in gear long ago zeroed out.

        the state really does need a study of the value of that fishery.

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  3. It will be a good day for Alaska when all those out of state inlet fisherman go the way of the DoDo Bird along with all the oily bilge water they pump into the environment from those aging monstrosities of boats they use. I say don’t let the door hit you in the arse on the way back to Washington State.

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  4. Fifteen years from now, when the farmed fish product has totally eclipsed the wild one, who will protect and champion our wild stocks? Maybe this fight we are now engaged in does have a silver lining in that there is serious focus on the wild stock numbers. We need to be thinking about conservation in a post commercial fishing era.

    Liked by 1 person

    • “Fifteen years from now, when the farmed fish product has totally eclipsed the wild one” Bob, frankly that’s already occurred when talking total market but there are few talking “post commercial fishing.”
      What makes you think this will change in 15 years?? You thinking the price collapses or the wild stock numbers will collapse (with us focusing on them)?

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      • Bill- What I think is that these RAS systems will put the price of commercially fished salmon totally out of reach except as an expensive novelty. I do worry about who will champion the fisheries then. If the fishery has no watchdog anything is possible.

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