Commentary

New world orders

 

Bakkafrost, a mid-tier salmon farming business in the remote Fareo Island, is reporting a third-quarter harvest of about 28 million pounds or – to translate that into Alaska terms – the equivalent of about 5.1 million sockeye salmon.

That’s about four times the Cook Inlet commercial sockeye harvest of 1.3 million this year, and one and a half times the Inlet’s 10-year-average, annual harvest of 3.4 million sockeye, according to Alaska Department of Fish and Game data. 

And the Bakkafrost yield comes on to top of a second-quarter harvest of nearly the same and a first-quarter harvest of more than 30 million pounds. To date then, Bakkafrost’s Faroe farms have produced about 87 million pounds or more than four and a half times the average commercial production in the Inlet at the doorstep of Alaska’s largest city.

Bakkafrost is one of the three companies farming salmon in the outcrop of North Atlantic islands between Norway and Iceland. Though the islands support major offshore fisheries for cod, haddock, herring, whiting and mackerel, farmed salmon now represent 50 percent of the value of the country’s exports, according to Sustainalytics.

Alaskans like to think of Cook Inlet as a significant salmon fishery. Over the last three decades, untold hours and tens of millions of state dollars have been consumed by research aimed at maximizing the Inlet catch, management aimed at seeing the fish weren’t overharvested, and bureaucratic expenses necessary to run Board of Fisheries meeting at which Alaskans have fought incessantly over who gets to catch Inlet salmon.

Historically, 70 percent or more of the fish have gone into the nets of commercial fishermen with Alaskans who fish for food, and sport-fishing businesses trying to make a go of tourism, getting a shot at the escapees from gillnets who make it into the hundreds of streams that feed the Inlet.

The Faroe salmon farmers know exactly what their fish are worth with farmed salmon now trading at about $2.65 per pound wholesale, pushing Bakkafrost’s third quarter gross over $74 million.

No one has much of an idea as to what the Alaska harvest is worth. The state pegs the 10-year average, ex-vessel value of the Inlet’s commercial catch at $31 million per year. Ex-vessel value is what the commercial fishermen get paid for their fish.

No one has a clue as to the economic value of the personal-use dipnet fishery.  A 1997 study of the sport fishery estimated it brought $37.4 million “into the Kenai Peninsula.” Values for the Matanuska-Susitna Borough, home to the other major rivers draining into Cook Inlet, were not calculated.

A report out earlier this year estimated that statewide anglers spent almost $950 million in Alaska in 2016 and drove an industry worth $1.5 billion, but the report did not break out the value of Cook Inlet, home to the state’s largest sport fisheries.

Alaska has done a great job of managing salmon numbers in the years since Statehood, but the state’s handling of the economy of salmon looks more like mismanagement. Fish and Game employs no economists.

The Fish Board allocates salmon between commercial, sport and personal-use fisheries with little discussion, if any, as to how the state might get the greatest value out of the fish because at this time board members simply don’t know where the maximum value is to be found.

New vs. old

While the three salmon farming companies in the Faroes have grown their production from about 50,000 tonnes at the start of the decade to near 65,000 tonnes last year, Cook Inlet production has been going the opposite way.

Commercial harvests – always up and down year to year – peaked at an average of 4.4 million sockeye per year in the 1980s. Sockeye are the Inlet’s big money fish. The annual average fell to about 3.5 million in the 1990s. It has continued to creep ever so slowly downward since.

Commercial fishermen blame competition from personal-use and sport fishermen, but their combined catches don’t begin to account for the number of salmon missing from a commercial fishery that has always had more participants than it could really support.

It is against this backdrop that commercial fishermen and non-commercial fishermen  are slated to meet early next year to resume what has come to be called the Cook Inlet “fish war.”

Some of the more inflammatory proposals to go before the Board have already been floated.

Eagle River angler Neil Dewitt wants the Board to end all commercial fishing in the Inlet because average Alaskans “have gone long enough without being able to fish or feed our families.”

Kenai attorney David Chessik, a commercial set-gillnet fisherman, wants the Board to ban fishing on salmon spawning beds because “from a legal point of view, the (federal) Magnuson-Stevens Act requires ‘long-term protection’ for ‘essential fish habitats.’

“The phrase ‘essential fish habitat’ is a defined term in the MSA that includes ‘spawning beds and rearing areas.’ The MSA claims to the national sovereign all anadromous species of the United States within the Exclusive Economic Zone, beyond the EEZ,
and throughout their range.

“The Act permits a state to manage anadromous species so long as they adhere to ‘minimum conservation standards.’ The state of Alaska is failing to provide long-term
protection for essential fish habitat that is reasonably calculated to maintain optimal sustainable yield in the face of a largely unmonitored, ever-growing, spawning-bed fishery.”

Chessik makes a long list of claims as to the damage done by “spawning bed” fishing but presents no evidence to back his case. The largest “spawning bed” fishery in the state is on the Russian River – a hugely popular, clearwater-tributary to the Kenai – which has remained highly productive for decades despite anglers running all over the riverbed in pursuit of both the sockeye (red) salmon that swarm the waterway and the rainbow trout which follow along to gorge themselves on eggs.

Anchorage’s Walt Arthur wants the Board to put a dent in the catch of Chessik’s setnets by giving personal-use dipnetting of salmon a priority over other all other forms of harvests in Alaska. He doesn’t think the current allocation fair.

“In 2018 the personal-use fishermen took 165,028 fish in the Kenai River while the Cook Inlet commercial fishery took 18,921,027 pounds of fish in the Inlet,” he argues. “Furthermore, the personal-use fishery was closed 30 July 2018 while commercial fishing was allowed to fish thru August.”

The commercial-fishermen dominated Central Peninsula Fish and Game Advisory Committee, meanwhile, has almost the opposite view. It wants mandatory commercial fishery openings of 12 hours at least twice per week. That is now the norm, but Fish and Game has sometimes eliminated scheduled openings to protect weak returns of salmon.

“Without regular 12-hour fishing periods, the Department is basically managing blind as
to the abundance,” the committee argues. “The fishery has numerous years of management without regular periods and the results have been consistent over-escapement of all species and lost harvest of surplus salmon.”

As stated, the commercial fishery has sometimes lost harvest of surplus salmon due to closures. “Over-escapement,” however, is a much-debated issue with various definitions depending on whether one is talking about maximum sustained yield, optimum sustained yield, the loss of harvestable surplus, or potential declines in future returns due to an over-abundance of small fish overgrazing their habitat and dying in large numbers.

The alleged over-escapements, meanwhile, have not involved all species. Sockeye salmon went well over the goal in the Kenai River this year, but Kenai kings (Chinook) fell significantly short of the goal, according to Fish and Game. 

Constitutional mandate

Against this backdrop, a proposal from the Kenai River Sportfishing Association (KRSA) to set some guidelines for Inlet salmon seems almost reasonable even if KRSA is the mortal enemy of the Inlet’s commercial fishermen.

Anchorage multi-millionaire Bob Penney was one of the organization’s founders and was the favorite boogeyman of the Inlet’s commercial fishermen even before he backed an initiative to ban set gillnets to halt their by-catch of king salmon. The initiative never made the ballot.

The Alaska Supreme Court spiked it saying Alaskans couldn’t be allowed to vote themselves greater access to a state resource. The allocation of state resources is reserved to the Legislature.

When it comes to fish and game, the Legislature has delegated much of that authority to the Alaska Boards of Fish and Game. Aside from a state law providing for a “subsistence” priority in rural areas, the boards have been given no guidelines for allocation other than the Alaska Constitution which stipulates state lands and waters are to be used for the “maximum benefit of its people.

“Wherever occurring in their natural state, fish, wildlife, and waters are reserved to the people for common use.

“Fish, forests, wildlife, grasslands, and all other replenishable resources belonging to the State shall be utilized, developed, and maintained on the sustained yield principle, subject to preferences among beneficial uses.”

The “beneficial uses” clause was added to the Constitution after a voter-approved amendment in 1972 paved the way for limited entry into Alaska commercial fisheries in 1974.

Commercial fishermen active at the time were given state permits as personal property. Some of the permits later became worth hundreds of thousands of dollars. Many have been bought and sold and bought and sold again since 1974.

Over the years, the Board of Fish has wrestled with that maximum benefit clause of the constitution while trying to settle disputes between commercial fishing interests who long owned the fisheries and a variety of other interests that don’t think they are getting their fair share.

Disputes have popped up all over the state, but they have been the longest running and most contentious in the Inlet, where commercial interests began to take over not long before Statehood, according to a Fish and Game history.

The territorial government banned the use of gillnets in most Inlet rivers in 1952, but gillnetting in the Inlet continued to be an option for anyone who could afford a net.

Snagging became the main harvest technique in rivers, but it was restricted to the head of the fish in 1969 because some anglers judged snagging unethical, and it was eventually banned altogether in 1973.

“This rule greatly reduced the local meat fishermen’s ability to harvest fish for home use,” wrote James Fall, the lead author on the state history. Those fishermen were allowed to participate in personal-use and subsistence net fisheries for a time, but commercial fishermen lobbying the Board of fish managed to get most of those eliminated in the early 1980s.

A lawsuit followed and in the mid-80s, some of the old subsistence fisheries were opened, and more would follow after the state Supreme Court ruled all Alaskans – not just rural residents – were entitled to a subsistence priority.

That didn’t last long. The Board of Fish eliminated the priority for most of the state’s accessible fisheries in the early 1990s by redesignating them “personal-use fisheries” instead of subsistence fisheries. They still both look like ducks, but one quacks and the other squawks.

The Inlet PU fisheries harvested about 150,000 salmon of all species in 1996, but grew to a harvest of more than 630,000 in 2010 before starting a downward creep. The 10-year average harvest is just under 500,000 fish per year, according to state data.

KSRA wants the Board to allocate fish from here on out with the “following factors giving appropriate weight to each in the order provided herein:

  1.  The importance of each fishery for providing residents the opportunity to harvest
    fish for personal and family consumption;
  2.  The importance of each fishery to the economy of the state;
  3.  The importance of each fishery to the economy of the region and local area in
    which the fishery is located;
  4. The number of residents and non-residents who have participated in each fishery
    in the past and the number of residents and non-residents who can reasonably be
    expected to participate in the future;
  5. The history of each personal use, sport, guided sport, and commercial fishery;
  6. The importance of each fishery in providing recreational opportunities for
    residents and non-residents.”

That is pretty clearly a proposal to begin transitioning the Inlet from what is primarily a commercial fishing to a hotspot for recreational fishing. Many already mad commercial fishermen are sure to be madder than hell.

But the world is changing. More than 70 percent of the salmon eaten in the world today is farmed. The Iditarod Trail Sled Dog Race has turned to a Norwegian company that helps power the salmon farms to grow its sport. 

There will always be a market for the best Alaska salmon just as there is a market for fine wine, but most people don’t drink fine wine. Most people want a decent bottle at a good price, which is what the farmers provide, and as a result they are going to set the average market price.

Some Alaska salmon will be able to top that price – can you say “first of the season Copper River salmon?” – but much won’t. Were this not bad enough, competition in the farmed fish business coupled with ever-improving aquaculture technology is going to hold down prices.

Alaska salmon prices will creep upward. Prices always do unless there is a major recession, but the prices are unlikely to keep up with inflation.

The future for tourism both from the Lower 48 state and overseas looks better. Not many places have to offer what Alaska has to offer. The fish farmers won’t you cast a line in their net pens, and salmon runs in Canada and the Pacific Northwest are struggling.

Yes, a lot of Alaskans don’t like tourists. Yes, it would be better if tourists just sent money and asked for videos in return. But tourism is an industry with growth potential in Alaska.

Commercial salmon fishing, even if it continues to grow, is likely to lose the value of  growth to relatively low prices. And it’s hard to believe the business can grow much given the growth over the last 50 years is mindboggling.

Alaska salmon harvests have gone from 48.3 million salmon per year in the 1970s to approximately 180 million per year this decade. Harvests of this size are unprecedented. Alaska has never witnessed anything like this, and still it is losing ground to the farmers.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

9 replies »

  1. “A report out earlier this year estimated that statewide anglers spent almost $950 million in Alaska in 2016 and drove an industry worth $1.5 million, but the report did not break out the value of Cook Inlet, home to the state’s largest sport fisheries.”

    Should that be $1.5 Billion? (Not to be too picky.) Another great article, well researched and on-point.

  2. Low priced decent enough tasting meat, what’s not to like? I haven’t bought beef from the store in years, I buy pork very rarely, chicken occasionally, and seafood never. I will invest my money in feeding the world low priced decent enough tasting meat as long as the return on investment is good…and it is right now, but I won’t buy it or eat it.

    In today’s day and age choosing to be deficient in your diet is sheer ignorance, you can eat clean healthy meat that is responsibly sourced and ethically handled…problem is you have to do it yourself and most don’t want or can’t do do that. I eat red meat almost every day, and my wife or I was the only ones who handled it from the time it took it’s last breath until it passed my lips.

    • Steve O,

      Wild game, red meat especially, is the way to go for sure. Get a freezer, rent a locker, keep somewhere unheated from getting too fully to hang in. Even get into canning, which does marvels for an old critter, or one that’s been eating something unfortunate.

      With more resources, raising livestock is also better than feedlot fattened store-meat. Alaska has at times & in certain places had its own feed-milling capability. ‘Rabbit pellets’ are usually very nearly just pure alfalfa or grass … the equipment to make pelletized feeds is sized & priced for small-medium local businesses, often mixed ag & hardware outlets.

  3. I like how you’re not anti commercial fishing. You’re just a writer explaining the realties of the future for commercial fishing in UCI.

  4. World Health Organization – WHO

    Availability and changes in consumption of animal products

    There has been an increasing pressure on the livestock sector to meet the growing demand for high-value animal protein. The world’s livestock sector is growing at an unprecedented rate and the driving force behind this enormous surge is a combination of population growth, rising incomes and urbanization. Annual meat production is projected to increase from 218 million tonnes in 1997-1999 to 376 million tonnes by 2030.

    Humans can survive on a marginal diet, as can other animals … but although it rhymes, surviving isn’t that same as thriving. Better diets result in better human outcomes. Many nations have been posting steadily increasing growth rates and adult heights for decades now … and parents don’t need Science to tell them it’s due mainly to increases in dietary meat.

    So rising demand for – greater access to – meat is “personal” for families, as well as a matter of enjoyment & prestige. These folks are watching and keeping track: they want the best that can be for their kids, and adding meat regularly is a key part of the quest for a better life.

    Pressure on the supply of meat will mitigate some of the obvious liability & exposure of Alaska fisheries. It’ll help some, at least a little, but it’s still a rear-guard battle. Alaska salmon (the price for it) is still behind the eight ball, long-term & big-picture.

    The chicken industry isn’t taking the arrival of salmon farming laying down. They’ve been preparing for years now to drop the price of chicken, as the falling cost of salmon threatens their market share. As this change takes place, other meat-sectors – including Alaska wild salmon – will both take a hit, and will be thrust in a round of sharp mutual elbowing.

  5. Craig writes: “But the world is changing”…

    The question is: “Will Alaska change with the rest of the world or go down in history as a “washed up” resource extraction colony just like the Congo did during the 19th Century?

    “In the new documentary “The Game Changers” on Netflix, vegan athletes including UFC fighter Nate Diaz seek to dispel myths that plant-based diets lack the protein to fuel strong athletes. 
    It’s true that some of the best sources of protein are plant-based. 
    Here are some of the top vegan sources of protein, including for elite athletes.”

    https://www.businessinsider.com/what-vegan-athletes-eat-for-protein-2019-11?amp%3Butm_medium=referral

  6. Very good and accurate article. The Commercial sector users in the Cook Inlet will be enraged over it. And they have demonstrated that they carry considerable weight in the legislature and will pull out all stops to shut up dissent. How far they might go is unknown.
    The Board of Fisheries has historically been made up from a majority of individuals who have been biased towards the commercial sector. That is why the regulations have in many cases ignored the average Alaskan. Furthermore the Dept of Fish & Game has been run by Commissioners who came from the commercial sector. That resulted in emergency order authority being used to benefit harvest by the commercial fishers.
    Today’s Commissioner and Board of Fisheries has an almost unique opportunity to finally do something that recognizes that providing more opportunity to users other than Comm fishers will best achieve Alaska’s Constitutional mandates. Let’s hope that the new Board members are not intimidated by Upper Cook Inlet Comm fishers.
    And as the author of this accurate and timely and provocative piece, watch out! You have undoubtedly angered many in the Comm sector. I am not sure where they will draw the line to shut you up.

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