Nothing but bad news for Alaska commercial fisheries and one of Alaska’s historically largest employers is contained in a new report from Rabobank – the huge, Dutch financial company the specializes in global food and agriculture financing.
First there is the forecast that “land-based farming is set to disrupt salmon,” as a company statement puts it.
“Rabobank sees the tide turning for recirculating aquaculture systems (RAS) and sees potential for this emerging technology to change the aquaculture game over the next decade, according to the latest RaboResearch report ‘Aquaculture 2.0: RAS Is Driving Change – Land-Based Farming Is Set to Disrupt Salmon.'”
The report is focused on salmon farming, which now produces more than 70 percent of the salmon consumed around the globe. Farms are the businesses in which Rabobank, like the Alaska Permanent Fund, actively invests.
The bankers envision RAS operations becoming a significant competitor to net-pen salmon from Norway, Chile, New Zealand, the Faroe Islands and elsewhere. This is the banks forecast for the most likely RAS salmon production come 2030:
- A 250,000 metric ton catch – more than twice the annual harvest of Alaska’s Bristol Bay – with a cost to raise of “€3.5 per kilo.”
At today’s exchange rate, 3.5 euros per kilogram translates to $1.78 pound, which can be expected to cap wild salmon prices if – and this is a significant if – if the wild fish can even compete with the RAS fish.
Alaska salmon processors for years put their marketing efforts into promoting wild-caught (though not necessary wild) as “better” than farmed because of anti-biotics used at some salmon farms, fish escapes at others, and questions about the fecal contamination of bays and estuaries from pens containing huge numbers of salmon.
“Many salmon farms impact the environment in numerous ways – pollution, chemicals, parasites and non-native farmed fish that escape from salmon farms all affect the natural habitat and the native salmon in the surrounding areas,” Target, the country’s eighth-largest retailer, reported in 2010 when it banned farmed salmon from its 1,740 stores.
“Wild-caught salmon from Alaska is considered a “Best Choice” by the Monterey Bay Aquarium and is certified as sustainable to the standard of the Marine Stewardship Council.”
A changing world
A lot has changed since then. Fish farms began to reduce their use of chemicals and clean-up their operations, and the Monterey Bay Aquarium changed its mind on farmed fish. The aquarium manages the popular “Seafood Watch” program that advises consumers on what kind of seafood is best to eat from a health and environmental standpoint.
Alaska wild salmon headed the Watch’s list of “Best Choice” salmon in 2005 with only two sources of farmed salmon at that time ranked “acceptable.” By 2012 Seafood Watch was labeling “acceptable” all farmed salmon certified by the Aquaculture Stewardship Council, an independent monitoring group set up by the WWF and the Sustainable Trade Initiative.
Today all Alaska salmon are gone from the Watch’s list. There’s not even one that ranks “Good Alternative” status although some wild salmon caught in selective fisheries in the Pacific Northwest are classed that way.
All of the fish on the “Best Choice” list today come from a variety of net-pen farms in Norway and New Zealand, lift-net fisheries in Washington state, or any “indoor recirculating tank.”
The latter are the RAS farms in the Rabobank report, and some of them have already launched a direct assault on Alaska wild fish as health crapshoot from a polluted ocean.
When Amy Bailey, a food writer for the Festival Foods supermarket chain in Wisconsin, was tasked with promoting the locally grown RAS salmon from Superior Fresh, second on her list of reasons to buy was this:
“They are grown without any antibiotics or pesticides ever. No contaminants or pollutants like you’ll find in the ocean.”
Fourth on her list was “fed an organic diet.” Some salmon farmers are now pushing for an official “organic” designation and the U.S. Department of Agriculture (USADA) reports it “is in the process of developing organic practice standards for aquaculture. Specific labeling guidance will be detailed after these standards are implemented. Certification of aquatic animals will not be available until new standards are complete.”
“Organic” has become a major selling point in retail groceries. Seattle-based Coherent Marketing Insights is projecting an 8.4 percent growth in the sale of organic products through 2026.
The European Union already sanctions “organic” fish farms, and salmon sold by some U.S. groceries are today being marketed as meeting “European Union Organic Certification.”
The U.S. National Organic Standards Board almost two decades ago vetoed the idea of labeling wild salmon “organic.” The board said it was impossible to do so because the designation depends on a guarantee the food eaten by the fish is organically produced, and there is no way of knowing what wild fish are eating.
At the time, the decision was met by howls of protest from Alaska, and then Lt. Gov. Fran Ulmer observed in an oped for the Alaska Journal of Commerce that “under those restrictive and ‘landlocked’ definitions, it’s obvious that virtually no fish likely will qualify for the organic label. That will put an indisputably healthy and natural product (Alaska salmon) at a distinct disadvantage in the marketplace where the term ‘organic’ is increasingly appealing to consumers.”
U.S. RAS operations raising fish in tightly controlled environments with clean, filtered water and fed largely vegetable-based or insect-based feeds diets, the latter like young salmon eat in the wild, could possibly meet organic standards.
Technology Networks earlier this year forecast a big boom in the sale of insect-based fish meal.
“The advantage of insect meal compared to fresh or unprocessed dried insects is that it can easily be mixed with other feed components, such as ground grains and soy, to form a mixture of a desired composition that is then pressed into pellets for better and more convenient feeding to animals,” the website reported.
“Overall, insects as a feed component for animals in aquaculture have great potential due to their high energy and protein content. This potential has been recognized by EU legislation and several insect species have been permitted for the production of animal feed in aquaculture. It will be exciting to follow the development of how and to what degree these insects will be used over the next few years.
Bad to worse
All of this comes as the breaking wave atop a giant swell of farmed fish.
Only a year ago, Rabobank reported 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.
Pen-raised salmon farming – unlike the free-range farming in which Alaska fishermen are now heavily engaged through a variety of state-backed private, non-profit hatcheries – is limited by the carrying capacity of ocean waters.
Hatcheries, aided by warm waters in the North Pacific Ocean, have helped boost Alaska salmon annual salmon harvests to over 200 million fish four times this decade, and seven times in state history.
All of those monster catches came after hatcheries began large-scale production.
“To put the magnitude of…production in historical perspective,” the Alaska Salmon Fisheries Enhancement Annual Report 2017 notes, “the hatchery harvests alone in both 2013 and 2015 were greater than the entire statewide commercial salmon harvests in every year prior to statehood except for 7 years (1918, 1926, 1934, 1936, 1937, 1938 and 1941).
The state’s problem is that most of the hatchery fish are high-volume, low-value pink salmon that sell for 30 to 60 cents per pound. The 23 million hatchery pink salmon caught last year were worth about $43 million or $1.87 per fish, according to the state enhancement report.
U.S.-bound, farmed Atlantic salmon was at the same time selling for more than twice as much per pound at $4.97 per although these prices are not directly comparable to the Alaska price paid fishermen. The Chilean value would be closer to the after-processing value or what is called the “first wholesale value” in Alaska.
The Alaska Department of Fish and Game reported a 2018 value of about $1.35 per pound for headed and gutted pinks being shipped out of the state that year. That’s less than a third of the value of farmed fish, but species of wild salmon other than pinks do better.
Headed and gutted Bristol Bay sockeye were worth $4.13 per pound last year – almost as much as farmed fish, according to Fish and Game. High prices for farmed salmon are now seen as a good thing by those assessing Alaska market conditions; they’ve come to see farmed fish prices as setting the standard by which everything else is measured and thus propping up prices that can be obtained for the higher-grade species of Alaska salmon.
That is how much the market has changed from the 1980s when Alaska fish set the bar for value.
The price paid fishermen for Bristol Bay sockeye peaked in 1988 at over $2.00 per pound – about $4.35 in 2019 dollars when inflation is taken into account. Fishermen were earning $1.35 this year though that could grow to as much as $1.50 per pound with after-season bonuses.
With farmed salmon now selling at $4.97 per pound wholesale and production costs forecast at $1.78 pound, the Rabobank warning of RAS disruptions in the market would appear more than justified.
“So far, we (Rabobank) have identified more than 50 RAS proposed projects (and counting) to farm salmon on land,” according to Beyhan de Jong, a company analyst for “animal protein.” “The total estimated production of these announced projects up to 2030 is equal to 25 percent of total current salmon production.
“Although the RAS concept is still under development and the future holds uncertainties, in our view the future of RAS operations is positive. If the risks within RAS operations are managed effectively, in our view, RAS will disrupt aquaculture trade flows, supply chains, and the marketing of salmon within the next decade.”
The Rabobank analysis does concede RAS could fail. The technology, at least at the large-scale production level, remains even though Atlantic Sapphire, a Norwegian company, has invested a reported $350 million in a massive Florida RAS facility.
A RAS failure is arguably the best Alaska hope, but technology failures in the short term seldom extend into the long term.
“The graveyard of technology is riddled with failed products: remember the Apple Newton? Or Microsoft’s Zune? How about Amazon’s Fire Phone?” Time magazine observed in 2017.
“And yet in Silicon Valley ‘failing fast’ is heralded as a virtue and, sometimes, even failing slowly can have unforeseeable benefits. Cutting-edge products may die an embarrassing death, but they often also lay the groundwork for better, more well-timed ideas that flourish later on.”
The Times story cites a long list of tech that died only to come back stronger. The Blackberry, the first handheld device able to connect to the internet, had a short life but “paved the way for the super-powered smartphones we carry around today.”
GM’s EV-1 – the first mass-produced electric car of modern times – lasted from 1996 to 1999 before it died as “too niche.” Today the Tesla is a rage with all auto manufacturers scrambling to get into the game.
MySpace faded away only for Facebook to take over the world. An all-but-forgotten Pebble pioneered the smartwatch only to buried by the Apple Watch, Samsung’s Galaxy Watch, and the FitBit. MapQuest provided the first mobile phone GPS and mapping only to be rendered extinct by more efficient Google Maps and Apple Maps.
These were all ideas destined to appeal to a broad market, and RAS ticks those boxes in these days of increasing worries about the environment and “climate change.”
Ocean warming appears to be playing a role in declines of West Coast salmon in British Columbia, Canada, and the Pacific Northwest, and the New York Times, among other publications, has pushed the idea that warming now threatens Alaska salmon.
There is no truth to the idea although warming might someday lead to a decrease in Alaska salmon. To date, however, it has been the opposite. Alaska wide, salmon have been returning in numbers never seen before, and harvests have increased accordingly.
On a sustainable-harvest basis, Alaska commercial salmon catches are near twice what the state once produced. But perceptions are sometimes far more important than reality.
“Alaska fisheries…are increasingly challenged by climate change,” The Nation magazine reported this month in a cover story headlined “THE LAST SALMON.”
Against this backdrop, consumers could hardly be blamed for choosing RAS salmon raised in clean, filtered water and fed organic food over wild, Alaska salmon portrayed as struggling to avoid extinction in an ocean threatened with climate change.
So here’s the consumer choice:
You can buy wild-caught salmon that might be consuming microplastics or worse in an ocean full of pollution before being caught in Alaska, a state that could care less about climate change although the Times says its salmon are threatened by the same, or you can help save wild salmon by buying environmentally friendly, farmed salmon from a RAS operation where they are raised in clean, filtered water, fed organic food and never come anywhere close to an estuary, bay or ocean they could pollute.
Which would you pick if this was all you new? And how about if someone sweetens the deal by tossing in the victory of farmed salmon in blind taste tests?
Then again, Dimitry Kudryn could be another Edward Snowden. An agent.
While a higher-level figure than Kudryn might qualify for elaborate incarceration measures, there’s nothing (in the public record, yet) that says that our industrious if charmingly misguided All-Alaskan Russian-American entrepreneur is in need of secretive imprisonment arrangements.
The only thing better than finding an ethnic Russian crime-figure, is ‘turning’ him. Less likely, but of great interest to law enforcement where it can arranged, is planting him in the first place.
As with the Edward Snowden soap opera. (And Bradley & Chelsea – not to slight anybody!) These guys were both already in Intelligence, and their stories can be seen as them rising to the call … “Your mission, should you choose to accept it…”. Or at least, that’s a working alternative explanation.
That Kudryn’s case is babysat for a decade by high-level investigators is an indicator. To have an inside man in the Russian-American crime-network, is priceless.
Now Snowden trots out a nothing-new tell-all book, a big-fat non-reveal … yet because he was in intelligence, he signed standard paperwork for people in that line of work, agreeing to submit anything he wants to publish in the future, to review by the CIA, NSA, etc … FIRST.
‘Open and Shut Case’: Edward Snowden Seems Pretty Screwed in New DOJ Lawsuit
However, by the soap opera theory, he’s reading his lines just fine. And in this line of thinking, Vladimir Kostenko’s character should be temporarily removed from the script – most likely, at law enforcement’s behest.
“The advantage of insect meal…it can easily be mixed with other feed components, such as ground grains and soy”
I wonder what (natural) fish has ever eaten ground grains and soy…
I wonder what (natural) fish meant for human consumption has ever eaten ground grains and soy…
Look up what soy does to the human body and why soy is being put into all kinds of food, it’s apparently better for us to eat it than to put it in the landfill or compost it? That’s strange.
Soy is a fabulous crop, right up there with corn and canola. But as happens with all 3 of these, it’s the oil that’s the top prize and after extracting it there’s a surplus of the spent meal.
Soy has a special status among beans & grains – and all plant based foods – because it contains so-called ‘complete protein’. That’s in the sense that it includes all of the “9 Essential Amino Acids”, meaning that the human body can’t internally metabolize (create) those 9 necessary building-blocks of proteins. So that’s quite unusual about soy, and gives it extra value not generally available elsewhere in the plant-kingdom.
However, there’s a problem with the protein of soy, under the heading of “Protein Quality”. A web search using that phrase shows the Wikipedia entry at #1. This article appears to have degenerated into an attempt to portray down-ranking of soy-protein as an effort of the dairy industry. While Dairy is certainly going to promote themselves … nooo, soy is not a protein-panacea, not interchangeable with animal proteins, and I’m a long-time soy-booster & user (although neither a soy- nor pajama-boy).
You can use soy for a modest portion of the total protein ration in the diet of growing chicks, with no loss of optimum growth. But more than that and the feed-efficiency & growth both start to fall. If you push it too far with the soy, the young birds begin showing obvious damage, and the economics are down the toilet. Some of it is fine; more than that is not.
#2 after the maybe-politicized Wikipedia return is a paper on NCBI-NIH that more-serious students of human and animal nutrition will want to bookmark and give some quality attention.
Protein – Which is Best?, from the Journal of Sports Science & Medicine. It’s slanted to adult humans.
Soy protein supplementation in animal feeds is very common … and nothing is done in factory-farming that deviates from the optimum outcomes in terms of growth-rate and product-quality. Anything less is incompatible with business-success.
Animal digestion is set up to work with whatever is available. There is specialization between carnivores & hervibores; between short-gut & long-gut systems (among both plant & meat-eaters) … but the truth is, extreme adaptability is the norm. Our dogs do very well on largely plant-based diets that are far removed from their intake in the wild. And so it will be for farmed salmon, no problem.
Looks like another typical day in the “mass distraction world” of Alaskan Media..
Medred has salmon on the menu.
Downing has Walker and Mallot.
ADN once again has opinion pieces from life long Alaskans who are leaving the state…
“After a lifetime in Alaska, I’m moving out of state. As I write these words, I’m not sure they’ve sunk in…”
I am sure this current “news” cycle is far from finding it’s end.
Steve, let’s face it, Becky is at her career prime for upward and professiional development. My guess is those opportunities are elsewhere which is nornal for most with professional careers. You move where opportunity presents itself. Maybe she accomplished all she could in Alaska and seeks to attain higher goals? I say good for her, not boo-hoo.
Kind of like the salmon issue, “you go where the opportunities present themsevles.”
I am just pointing out the patterns…
Everyone can draw their own conclusions…
No matter the personal reasons, there are quite a lot of lifelong Alaskans packing up and heading south this year…an even larger majority have sent their children “outside” for college and few ever make the permanent move back.
Without a strong sense of “roots” AK is doomed to stay an “extraction state” subservient to outside special interests on all political sides.
And this speaks to mining, as well as logging and fish ranching in partnership with Big Oil while the unions provide the “man power” to keep the Globalist “dream” alive.
Well said Steve, but the reality is that I’d say 80% of professional career ops are in the lower 48. Kid goes to Clemson, then Georgetown Law, and decides to stay in D.C. where the ops ar. Kid goes to UA and is then accepted in med school in CA and stays in San Diego. Kids goes to UA and gets a degree in Petroleum Engineering. Does he stay on the North Slope or head to Texas or Louisiana? Is what it is. It is the unmotivated druggie I’d be more concerned about.
Good on you for pointing out that we have some media that deal with actual issues while the states largest newspaper prints selfagrandizing opinion pieces that do nothing to help but simply kick the rest of us in the shins on the way out the door. Thankfully we have a media presence in this state that deals with actual issues affecting this state and not a media consumed with people who hate the state they live in or have left. That was your point, right?
If the farmed salmon are so real and natural why do they have to use dye to color the fish?
Salmon are pink or red because of carotenoids in their diet (from the word ‘carrot’). A very large family of related pigmented chemicals present in plants & animals, naturally. “Dye” isn’t really what it is, even when it’s added separately.
Feed-stuffs can found or harvested special that contain the same pigments that wild salmon would eat, that turn them pink. Crustaceans and little shrimp-things. Krill.
There are better criticisms of the farmed-salmon game, than that they sneak around pumping them full of dye to hoodwink the customer.
they don’t. all they have do is feed them some krill.
just ask the new Iditarod sponsor: Qrill Aqua.
it’s all about the anti-oxidant astaxanthin; not “dye.” https://www.qrillaqua.com/qrill-aqua-products
astaxanthin is what turns the flesh of our salmon red, too, or not. witness the now coveted “white king salmon.”
astaxandhin is itself a carotenoid phytonutrient found in a lot of plants. and if you don’t like eating fish, Aker Biomarine – the parent company of Qrill – says you can skip the salmon and go straight to its krill oil supplements to gain anti-oxidant benefits:
instead of eating the salmon, you can be the salmon.
That’s a fascinating link, Craig, “white king salmon” on ADFG.
I did not know that whites had become chic, with premium prices, but I am not surprised. Fishing boats often hustled them off or set them aside special (’50s, ’60s) … but the market only gave a fraction of the normal-colored price. I saw white salmon loving home-canned in quart jars, at the County Fair. Show-off stuff … hmm.
But what really slays me in the ADFG article, is this:
One of my nice old trolling-memories concerns catching a big white king. As I unsnapped the leader off the mainline and let it dart back & forth a couple times, I was aware that my skipper had stepped out of the wheelhouse and was waiting behind me. This was not normal for him. I gaffed it and heaved it up on deck, and he came up by my elbow and took the gaff, put the point on a spot by the cheek and peeled open a little patch of meat – shiny white.
Face dripping disgust – the color cost him $$ – he hands me the gaff and stalks back into the wheelhouse.
That was always an oddity about that memory – that Peters came out while the fish was still in the water, and then checked the meat. I had no idea that it was thought that you could tell.
I like your thinking:
“…instead of eating the salmon, you can be the salmon.”
I would say go 1 step further down the food chain and just include some seaweed and micro algae in your daily diet.
Less contaminated food sources and plant based nutrition.
There are also many GLA fatty acids in Hemp Oil and sources such as nuts and flax seeds provide many healthy benefits as well.
Craig Medred alludes to what – anyone can grasp – really dooms wild salmon: FrankenChicken.At today’s exchange rate, 3.5 euros per kilogram translates to $1.78 pound, which can be expected to cap wild salmon prices if – and this is a significant if – if the wild fish can even compete with the RAS fish. [emph. added]
So-called ‘Standard Breeds’ of meat-chickens cannot be sold at meaningful levels in the mass-market. That’s because a so-called FrankenChicken has redefined what the public expects from the chicken meat they buy in the supermarket … and yeah-huh, that outcome was very much by design.
The modern Cornish-Rock Cross hybrid lines are not just more efficient at feed-conversion and very fast-growing: the flavor, the texture, the fats, all aspects of the cooking & eating of the meat is drastically different from even the best-grown ‘farm chicken’.
This is what will happen with salmon. The aquaculture industry will carefully determine what it is that consumers like or prefer in their fish, and amp it up to levels wild-caught cannot attain. Plus they will add characteristics that don’t exist in the wild. Plus the product will be highly uniform & predictable … which is dramatically untrue of wild anything, and still a large factor for all traditionally-raised farm meats.
In another generation, most of the population will not eat wild salmon on a dare.
Thanks for the analysis, Craig.
Are these RAS salmon sterile? No roe skeins? The AK salmon roe market for pink and chum is actually worth more than the flesh. There will always be a market for AK salmon roe!
Since Russia killed off all their “black caviar” sturgeon, they have turned to salmon roe, to feed their people. Japan was the primary buyer of all AK salmon roe for decades, now Russia thru China, has been increasing their import of roe. Due to the economic sanctions levied against Russia, Chinese companies purchase the roe from AK processors, then divert the cargo ship to Russia, once it crosses the international line. Sort of like China, sending all of their electronic products to Vietnam, to bypass the tariffs. America is still importing all of the Chinese electronic products, only now it takes a slight detour. The Chinese government is smarter than us. No matter what ideology they practice, it looks like pure State controlled corporate capitalism to me.
While we dither and ring our hands, and whine like puppies, our National debt continues to rise. We are still the world’s policeman (no longer working for us), costing thousands of American lives, for no purpose, except to put billions of dollars into the many US corporations, within the military industrial complex.
Salmon roe, the not so new revenue for Alaska. What a thought!
RAS may have flesh, though no roe!
No reason RAS fish won’t have roe. Just keep the females around until maturity. The producers will do whatever the market requires, and in the end continue to grind commfish into economic dust.
Sure you guys don’t want to get on board and help repeal the statewide ban on fish farming in AK? It would be a lot more productive than running around wailing “All is lost.”
Hint: For planning purposes, protectionism never works. It removes you from the marketplace and ensures you never learn how to be competitive in it as it changes. Cheers –
If you look a little closer, you will see, that goes against their economic model. Fast growing fish, do not produce fully mature roe skeins. Also, you fail to realize, that the Japanese roe techs, have been incorporated into every AK salmon processor, since the ‘60s. The egg house or roe room’s production is tightly controlled by the different Japanese companies. All top grades are exported to Japan, China & Russia. The lesser grades are sold to US companies for fish bait (where they are salted and dyed).
The Japanese import market will not purchase any roe, unless their techs have processed it.
I doubt if the Norwegians or other foreign companies will allow that, even if they let their fish grow to full maturity.
If the price is high enough,they’ll figure a way to grow skeins in a petri dish
Yeah, the problem with egg-laying salmon is the dang things die with their first clutch … but like chickens there is a very large range & variety of strategies & tactics seen in individuals … which breeders can select from.
For sure, meat-fish will be discouraged from wasting energy on eggs … but equally sure there are anadromous salmonids that spawn many times. Domesticated animals are usually marked by a disengagement from the wild breeding cycle.
White Leghorn salmohead, coming right up!
All politics, oceans dirty, must save the environment, “Global Warming” contaminates “wild” salmon. Just ask Steve S., all wild slamon is radiated from Fukushima. “Sustainable” meant this before it meant that. Strictly “Globalism”/politics, $$$$, and predictable control over a financial resource. Wild will be a term that will become “evil” because Alaska would destroying the “environment”. Usual crap.