The United Fishermen of Alaska – one of the 49th state’s most powerful political entities – is mad that commercial salmon fishermen might be losing some fishing opportunities in Cook Inlet, but the world doesn’t seem to care.
Global salmon markets are rapidly moving on from wild-caught salmon, and the sooner Alaska wakes up to this reality the better.
AquaBounty – the company that raises the genetically modified (GMO), fast-growing salmon that Sen. Lisa Murkowski, R-Alaska, likes to call “Frankenfish” – just made a public stock offering hoping to raise $10 million and took in $15.5 million.
Along with farming salmon in Canada, the company operates a recirculating aquaculture system (RAS) in Indiana.
Its Chinook salmon modified with a growth gene from a fast-growing ocean pout “is expected to make the salmon reach a harvestable size in 16 to 18 months, not the usual 28 to 36 months taken by the non-GMO Atlantic salmon,” Undercurrent News reported.
“The company received its first 120,000 genetically engineered salmon eggs at its Indiana facility in May 2019 and has projected its first commercial harvest to take place in the fourth quarter of 2020.”
Land-based RAS operations using filtered water in closed systems that isolate salmon from wild pathogens and solve the problem of concentrations of fish potentially polluting estuaries are becoming all the rage among fish farmers.
“Finger Lakes Fish: New Auburn salmon farm first of many across country,” the online version of “The Citizen” newspaper in Auburn. N.Y, reported Monday.
“Soon, the salmon you eat could be from Auburn,” business writer David Wilcox wrote. “Finger Lakes Fish, a new aquaculture business, is getting off the ground inside a 43,000-square-foot facility on Technology Park Boulevard. Founded by CEO Ed Heslop, of Aurora, the business raises coho salmon and sells them to high-end restaurants and grocers under the LocalCoho brand name. The Auburn facility is the first of a dozen Finger Lakes Fish plans to open across the country.”
Superior Fresh went operational with this sort of community-size RAS farm in Wisconsin three years ago. The company has already announced expansion plans and other RAS operations are popping all over the place.
Pure Salmon – note the catchy name meant to denote the controlled conditions in which these fish are raised rather than swimming around in an ocean of who knows what – “wants to be the local seafood option, worldwide,” Seafood News headlined earlier this month.
A four-year-old company owned by a Singapore-based private equity firm, “Pure Salmon has invested in a huge expansion of land-based salmon farming around the world, and has plans to launch operations across the globe with projects planned in Japan, France, North America, China, Southeast Asia, and Africa,” Seafood’s Sam Hill reported.
“The increased viability of land-based fish farming has allowed aquaculture operations to set up shop in areas that cannot support sea-based farms. This gives Pure Salmon the opportunity to build facilities within a relatively short trucking distance of major markets and giving consumers a more local option for salmon, instead of buying imports from faraway locations such as Norway or Chile.”
Noticeably absent from that list of “faraway locations” was Alaska, which has become a minor player in the global salmon market. More than 70 percent of salmon are now produced on farms, not caught at sea, and the less than 30 percent harvested in the ocean – many of those hatchery-spawned fish – are split between Russia and Alaska.
The Alaska wild salmon harvest is at a historic peak and seems poised to inevitably decline with or without climate change. Meanwhile, the production of farmed salmon continues to increase.
“Pure Salmon has set the goal of producing a combined 260,000 tons of salmon per year globally once all of its planned RAS facilities are operational. In February 2019, Pure Salmon revealed Tazewell County, Virginia, will be the location of its farm in North America,” Hill reported.
Upper Cook Inlet, the fishery about which the UFA is making such a fuss and which was a battleground before the state Board of Fisheries earlier this year, produced a commercial harvest of 1.7 million sockeye salmon last summer, or less than 5,000 tons, according to Alaska Department of Fish and Game data.
According to the UFA’s Facebook post chastising the Fish Board and the Dunleavy administration, “in 2019 Cook Inlet commercial fishermen and three local processors provided over 2.6 million pounds (approximately 1,300 tons) of seafood to markets and restaurants on the Kenai Peninsula, Anchorage and communities in the (Matanuska-Susitna) Valley for Alaskan’s consumption….With only 160,000 resident sport fishing licenses sold across the state each year, Alaskans best access to seafood resources is through the commercial fishing industry.”
Follow the money
Those locally marketed fish – about 25 to 30 percent of the Upper Inlet harvest – provide the biggest economic bang in Alaska with money flowing to the fishermen who catch them, the processors who butcher them, the middlemen who deliver them to markets and restaurants, the markets and restaurants themselves, and the people who work in all of these places.
The other 70 to 75 percent of these fish are minimally handled and shipped out of state with little return to the Alaska economy. Cook Inlet commercial fishermen pocket some cash. Many of them are now hobbyists who one member of their group described to the Fish Board as “doctors, lawyers and nurses.”
The state collects a three percent tax on their raw fish, the least valuable form of a dead salmon. The tax revenues are split with local governments in communities with fish processing plants. The state gets barely enough out of the deal to pay for the cost of managing and policing the commercial fishery.
Seasonal employees of processing facilities make some money. Seventy-two percent of them are non-residents, according to the Alaska Department of Labor, and spend little money in the state.
Alaska fish processors annually fret about finding enough people to work what are called “slime line” jobs in their Alaska plants and depend to a significant extent on foreign workers on visas.
In 2017, “immigration policies, difficult labor conditions, and the unpredictability of wild salmon combined into a perfect storm. Experts estimate that the labor shortage cost Bristol Bay’s fishery tens of millions of dollars in lost profits,” reported The Counter, a nonprofit publication focused on what Americans eat.
A job recruiter was quoted saying “I don’t know where you find people. I’ve recruited in Guam, Samoa, the Virgin Islands, and 40 states in the lower 48, [but] soon it’s going to be just us recruiters in a room talking to no one about how great work in Alaska is.”
He blamed increased government labor restrictions and reduced appetite for manual labor among young people for the lack of workers.
Against this backdrop and lobbied heavily by people in tourism businesses in the Matanuska-Susitna Valley and on the Kenai Peninsula, the Board adopted some regulations intended to put more fish in state rivers to increase sport fishing opportunities – which help drive tourism businesses – and feed Alaskans who participate in what are called “personal use” dipnet fisheries for salmon.
The UFA blasted Commissioner of Fish and Game Doug Vincent-Lang for describing the outcome as “‘a win for recreational fishermen and personal fishermen in the state – and a win for conservation – because we ended up not only providing some additional harvest opportunities, but we took some real solid steps in conserving these fish stocks for future generations.’
“UFA is disappointed the Commissioner chose to celebrate through a state-sponsored communication platform the positive outcomes for recreational and personal-use fishermen, without even acknowledging the associated cost to other user groups. The remarks communicate a blatant disregard for the losers in this scenario, namely Alaskan residents who depend on commercial fisheries in the Cook Inlet region, and the individual Alaskans who access the resource by purchasing commercially harvested fish.”
The latter statement, however, was directly contradicted by UFA’s earlier claim of that in-state demand for only 2.6 million pounds of Inlet seafood. Even with the new regulations in place, the commercial fishery is expected to harvest three to four more times as many Upper Cook Inlet salmon.
Despite forecasting a very weak sockeye salmon return next year, the state expects a commercial harvest of about 1.7 million of those fish, a catch in the range of 8.5 million to 10 million pounds. That far exceeds the UFA’s claim of a 2.6-million-pound demand from seafood restaurants that “depend on commercial fisheries in the Cook Inlet region, and the individual Alaskans who access the resource by purchasing commercially harvested fish.”
Given evolving global markets, a slow but steady transition to an emphasis on sport fisheries in the few areas in Alaska where the demand exits to support such a change makes economic sense. Alaska stands to get a much bigger economic bang out of many people flying north to try to catch a few fish to take home in a cooler than it does out of a few people netting tens of thousands of fish each to be shipped south in a freezer van.
And the value of the former fish are likely to increase in real dollar terms going forward while the real-dollar value of the latter fish decrease. Competition and the ever-increasing efficiency in fish farming are expected to hold down salmon prices as has been the case with most U.S. agriculture.
Food and agriculture economist Jayson Lusk has calculated that when adjusted for inflation corn, wheat and cotton prices “were routinely three to six times higher” in the 1950s than 2016. The same trend has applied to most agriculture commodities over the past 70 years.
“The beneficiaries of falling agricultural prices have been food and fiber consumers,” Lusk wrote. Salmon consumers look to become the beneficiaries of the newest agricultural breakthrough going forward.
Alaska commercial fishermen will sadly be the loser. Whether the Alaska economy takes a big hit as well will depend on how the state manages the change.