A farm-raised halibut/INVE Aquaculture photo

First the farmers came after the wild salmon. Now they’re coming after the wild halibut.

A campaign by Direct Seafoods urging chefs to replace wild halibut with farmed halibut on restaurant menus was this week lighting up fishing sites across the web.

The farmed halibut campaign is aimed at Atlantic halibut, but restaurants often don’t distinguish.

“Direct Seafoods is a trading name of Seafood Holdings Ltd, part of Bid Corporation Group,” according to the website Fish Information & Services United States. “Bid Corporation is one of the largest catering companies in the world and owns many fish and seafood businesses across the globe.”

“Direct Seafoods is urging chefs to take wild halibut off menus and has pledged to only offer the farmed variety to its customers,” the company said in a media release. ‘With dishes such as roast halibut increasingly popular on menus, Direct Seafoods are encouraging their customers to use farmed fish sourced from both Scotland and Norway.”

The statement did note that Pacific halibut are sustainably managed by the U.S. and Canada, but how the trickle down on the information works with consumers is always an unknown.

“Halibut is an extremely slow-growing species and is considered endangered,” Laky Zervudachi, Direct’s director of sustainability was quoted as saying. “…Most halibut landed in Norway is from targeted longlines which, however well managed, are still targeting an endangered species.

“Direct Seafoods is clear that we won’t sell wild halibut until a truly demonstrable well-managed fishery is in place. The USA and Canada have proved that it is possible, and the Pacific halibut fishery has been MSC certified for many years.  In the meantime, we’re urging chefs to avoid supporting the trade in endangered species and only put farmed halibut on menus.”

Numbers game

The best thing Alaska halibut fishermen have going for them at this time is that European success in growing salmon has not translated that well into growing halibut.

Norway, the world leader in fish farming of coldwater fish, is producing only about 1,600 tonnes of halibut per year compared to 1.2 million tonnes of salmon. The total global production of farmed halibut is only about 2,000 tonnes.

Historic harvests of Pacific halibut off Alaska have been eight to 10 times greater, but the wild harvest has been falling in recent years apparently due to a changing ocean environment in some ways more favorable to salmon than to halibut.

The International Pacific Halibut Commission has set a limit of about 8200 tonnes off the Alaska coast this year, but even that dwarfs the farmed catch. Wild halibut – unlike wild salmon – still dominate their market.

Wild salmon long ago became minor players in a market where farmed fish now rule even in the best years for wild salmon. Alaska lawmakers who have criticized those warning of market shifts have clearly not looked at the data.

“Global wild salmon catches were good in 2018, with the Alaskan and Russian Federation fleets producing an estimated 915,000 tonnes of all species combined,” the Food and Agriculture Organization (FAO) of the United Nations reported in January. “The major component of this total was a record-breaking pink salmon harvest in the Russian Federation, totalling 510,000 tonnes.”

Even with the record-breaking season in Russia, however, wild production fell 300,000 tonnes short of Norway’s farmed production, and the Norwegians are facing increased competition from farmers in Chile, Canada, Scotland, the Fareo Islands, Iceland, New Zealand and elsewhere.

“Total global production of farmed Atlantic salmon is estimated to have reached 2.5 million tonnes in 2018, a 5 to 6 percent increase of 130,000 tonnes over 2017,” the FAO reported.

Alaska salmon, once a dominant force, now account for only about 12 percent of the global market, and about half of that is low value pink salmon. All indications are that Alaska’s percentage will continue to shrink.

“Between Nordic Aquafarm’s planned facilities in both Belfast, Maine and Humboldt County, California; Whole Ocean’s plans for a facility in Bucksport, Maine; and Atlantic Sapphire’s facility in Miami, Florida, the recirculating aquaculture system (RAS) method for growing salmon (on land) is poised to become a breakthrough technology,” Seafood Source reported this week. Production numbers from all four, using the low end of company estimates, would amount to nearly 120,000 metric tons of salmon a year.

Boutique producers

And those big producers might be the least of the worries for North Pacific fishermen who’ve tried to make the quality of “Alaska wild” salmon their big selling point. Smaller companies like Superior Fresh in Wisconsin and Cape d’Or in Canada are going after the same market as Alaskans with a locally grown, environmentally friendly, antibiotic and parasite-free product.

“Cape d’Or salmon, located in Advocate Harbour, Nova Scotia, may be on a smaller scale than the aforementioned projects (in California, Maine and Florida),” Seafood Source said, “but its success over the past five years has proven that a RAS model can work.”

“Our land-based facility provides security for the fish while minimizing our environmental impact,” Cape d’Or’s website says. “Our fish are disease, parasite, chemical, hormone, antibiotic, and GMO free.”

The company, it adds, has also “completed our transition to organic management and now offers a fully sustainable, 100 percent organic product.”

Other Eastern Canadian provinces haven’t missed what is going on in Nova Scotia. Residents of two other provinces are busy talking about a $1.1 million economic development study that suggests, among other things, that Newfoundland and Labrador salmon farmers should “by 2030…be producing more than five times current volumes, exceeding 100,000 metric tons annually.

“Fully realized, increased salmon production, coupled with a substantially more integrated aquaculture supply and services network, could contribute up to $600 million in gross domestic product uplift and generate more than 7,000 additional jobs by 2030,” the so-called McKinsey Report says. “Many of these jobs would be concentrated in the Province’s rural and remote communities, supporting the government of Newfoundland and Labrador’s priority to advance regional economic development.”

The report notes that already reduced tariffs on seafood shipped from Canada to the European Union (EU) are due to disappear in seven years. The EU is second only to Japan as a consumer of Alaska salmon, and it has historically accounted for the largest foreign sales of canned Alaska salmon.

All market indicators point to stiff competition for salmon sales in the market due to the abundance of farmed fish, and in that regard, Alaska commercial halibut fishermen are far better positioned. But there are potential market problems related to high cost and the suggestion wild halibut are endangered.

They are not, but the sales pitch of Direct Seafood could lead to that idea. And there are already those out there hawking farmed halibut as the next great thing.

Farmed flatfish

“Tank to Table: How a Tiny Farm in Norway Is Hoping to Feed the Planet With Sustainable Farmed Fish,” Men’s Journal magazine headlined above a story touting the virtues of shore-farmed halibut.

“Based on looks alone, you’d never guess that this seemingly low-tech fish farm might one day save us from starvation—or at least from a diet of Soylent. But it just might,” writer Mickey Rapkin gushed in the story below.

“Scientists predict that our oceans will become virtual deserts by 2050. According to reports by the University of British Columbia, overfishing is causing global catches to fall three times more quickly than previously estimated. In 2010, chef Dan Barber, of the internationally acclaimed restaurant Blue Hill at Stone Barns, gave a TED Talk on this grim future.

“‘It’s hard to overstate the destruction,’ he said. ‘Ninety percent of large fish—the ones we love, the tunas, the halibuts, the salmons, swordfish—they’ve collapsed.'”

Sales pitches like these, more of which can be expected as salmon and halibut farms continue to expand, are hard for a small market player – as Alaska increasingly is – to overcome.  The state is already marketing uphill against an ever-growing competitor expanding into all of the high-value fisheries.

FIS reported in March that Stolt Sea Farm,  a company based in Spain, is in the process of “building two new farms with state-of-the-art technology for sole farming: one in Cervo, Spain, and another one in Tocha, Portugal. …In addition, SSF is carrying out a new project in Anglet, France, to remodel and expand the current farm, in which the company has been operating since 2009. The projected expansion of the(ir) Icelandic farm will also help further boost growth.”

Sole is a flatfish that competes with halibut in many markets. Farming of these and other flatfish is only just beginning to expand after years of experimentation. INVE Aquaculture, one of the pioneers, started in business more than 20 years ago. 

“The Nordic Halibut company was founded in 1995 with a clear aim to revolutionize integrated farming from hatchery to end product in European halibut production,” INVE says on its website. “Nordic Halibut’s current annual production volume of about 800 tons will be gradually increased in the years to come, to reach an impressive 2,000 tons.”

What’s driving expansion in the halibut farming business – PEI Halibut on Prince Edward Island, Canada, has been steadily growing its operation for years with government support – is the same thing that drove expansion of salmon farms: high prices for wild fish.

In 1988, fishermen in Bristol Bay were being paid today’s equivalent of more than $4 per pound for sockeye. The Alaska Legislature in 1990 banned salmon farming thinking it could keep those prices high.

It didn’t work. Norwegian farmers inspired the by the high value began ramping up the salmon farms that would come to dominate the salmon business. By 2001, Bristol Bay sockeye were worth less than 50 cents per pound in 2018 dollars.

Prices have slowly crept up since. Prices averaged $1.26 a pound last year, according to the latest report from the Institute of Social and Economic Research (ISER) at the University of Alaska Anchorage. 

But farmed fish now dictate market prices, and Alaska salmon prices are constrained by the market. The prospects for major increases in wild salmon prices are poor, and there is the possibility prices could always start slipping downward again.

No economist expects them ever to get back near the ’88 price. Retired ISER director Gunnar Knapp and others have called for a rethink of how Alaska wild-fish fisheries do business with an eye to maintaining value in a market looking to grow ever more competitive in the future.

But that is a discussion hard to get started in a state full of commercial, personal-use, subsistence and sport fishermen pre-occupied with arguing over who gets to catch the fish along Alaska’s coast or in the state’s creeks and rivers. 

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