Commentary

The futurist

 

the devil

If you are an Alaska commercial fisherman or someone who simply cares about the fate of the state’s small, rural communities still dependent on commercial fishing as their economic reason to exist, you can consider the man in the expensive suit above the devil.

He is Norwegian Bendik Søvegjarto, chief executive officer of a company called Bluegrove.

A 2012 graduate of the University of Oslo, he is an entrepreneur, a technocrat and a would-be economic revolutionary. He and Bluegrove want to transform the way salmon are raised.

As population growth escalates, we must find ways to provide nutritious and protein-rich food from the world’s finite resources,” he said in a media statement when the newly formed Bluegrove launched at the end of June. “It is therefore essential that we increase seafood production in ways that are not only sustainable but also cost-effective. Cost reductions will obviously make seafood producers more competitive and more profitable, even as the seafood they make becomes more affordable for their customers.

The key phrases there – if you are an Alaska commercial fishermen – are “cost reductions” and “more affordable.”

Not counting Alaska’s commercial hatcheries which call their operations “ocean ranching” and insist they aren’t in the farming business, salmon farmers produce more than seven out of every 10 salmon eaten in the world today.

Because of this, they control the market, and their market share just keeps growing. You can badmouth farmed salmon all you want if you are a commercial fisherman making money off wild fish or an Alaska who believes, as most of do, that the state’s wild fish taste better even if they came up losers in a Washington Post taste test, but you cannot ignore economic realities.

Maybe the trendy, upscale chefs the Post pulled together for its test didn’t know diddly about how a salmon filet should look  – “some samples had either the large flake and high-fat content that gave them away as farmed or the finer grain and meaty texture that identified them as wild, we could not consistently tell which was which” – or taste – “one thing…is certain, you’ll never catch any of us saying wild salmon tastes better than farmed”, but the market has decided that farmed salmon and wild salmon are close enough in taste that price matters and matters a lot.

Alaska might – might – be able to get a premium for its product in some markets, but it isn’t that much of a premium, and even that is being threatened by the farmers. A New Zealand salmon farm has taken direct aim at the premium market and now pitches its “Ōra king salmon: as the “Wagyu beef of the seafood world.”

 “Playing into the breed’s richness and clean taste is the pristine water it’s raised in. Ōra King eggs are hatched in the South Island’s Takaka Valley in Golden Bay, refreshed with water from Te Waikoropupu Springs, some of the clearest in the world…. (raised) in sea farm pens in Marlborough Sounds, where there’s a 98 percent ratio of water to fish. The roominess (some farms pack up to 50,000 fish in two acres of water) cuts down on waste, sea lice, parasites, and the need for chemicals and antibiotics that have given aquaculture a bad name – and its products – an inferior flavor,” Bloomberg reported in a news story that sounded more like a sales pitch.

Alaska salmon stories have, of course, sometimes been spun the same way.

“Salmon is most certainly not simply salmon, especially when it’s caught wild. As opposed to farm-raised species, typically imported from overseas and oftentimes unnaturally plump and flabby and in some studies lacking the same concentration of critical omega-3 fatty acids,  the flesh of a wild fish is firm and muscular, with a cleaner taste that chefs covet,” Matt Rodbard wrote for Food Republic after the Alaska Seafood Marketing Institute (ASMI) took him on an Alaska junket.

On a small scale, some of this marketing hype matters. There are small wineries all over the world that survive on selling premium wines to select clientele, but bulk wines – many sold under private labels – now dominate the market because they taste good and are available at reasonable prices.

(Editor’s note: A California cabernet sauvignon – from a box of all things – sold under Costco’s Kirkland brand recently beat out a host of fancier, much higher priced wines to win a family taste test among a group of relatives, a few of whom are legitimate wine snobs.)

All of this is by way of saying that if Bluegrove succeeds in its effort to drive down the cost of producing farmed salmon, the falling price of those fish is going to push down the price paid Alaska fishermen for the state’s wild salmon.

And even if Bluegrove only helps farmers hold prices steady, inflation will over time drive down the real price paid Alaska fishermen. Those who’ve been around know how this works.

Alaska salmon prices peaked at $2.35 per pound for sockeye in 1988. Sockeye today still yeilds 65 or 70 percent of that price, but the actual loss is significanlty more.

The U.S. inflation calculator says that $2.35 from 1988 has the same spending and buying power as $5.12 today. Alaska salmon prices bottomed out in the 1990s, but have since crept up. The Alaska Department of Fish and Game reported an average, end-of-season, ex-vessel price of $1.54 per pound for Bristol Bay last year.

Prices were higher in some other parts of the state, but Bay sockeye account for almost 80 percent of the statewide harvest. At $1.54 a pound, it was worth less than a third of what it was worth 32 years ago. Meanwhile the cost of catching the fish – boats, fuel, nets, crew salaries – have only gone up.

Pen dreams?

It is easy to dismiss a new company like Bluegrove – not to mention any of the various on-land, bluehouse salmon farms popping up around the globe – as an artfully promoted startups destined to fail, but it is seldom wise to bet against tech.

It might start off with over-priced products that perform marginally. The early evolution might be slow, but the tech eventually reaches a point where innovations move to lightspeed.

As Richard Goodwin observes in a history of the mobile phone, “a lot can happen in 40 years. But when it comes to technology, 40-years is like going back to the days of Moses or the Roman Empire.

It took the first phone a decade to reach the market. It was 37 years ago that Motorola released the DynaTAC 8000X, a heavy brick featuring 30 minutes of talk-time, six hours of standby, and the ability to store 30 phone numbers.

It cost $3995 – the equivalent of more than $10,000 in 2020 cash. Both the size and price of phones would soon start falling fast, but it took 13 years before the first smartphone – the Nokia Communicator 9000 – arrived on the scene in 1996.

And today for less than $500 you can buy a smartphone packed with more computing power than the National Aeronautics and Space Administration (NASA) had available for the first Apollo moon shot.

Søvegjarto does not appear to be the Steve Jobs of salmon-farming tech, but he does have plenty of experience in the space. He was still a student at university when he founded a company called CageEye along with a fellow student and one of their professors.

The company developed a way to hydroacoustically monitor pens to determine exactly how much fish were eating. Sound waves were bounced of the fish to see if they were eating all of the food provided or whether some was filtering through the school. The amount of feed being given could then be adjusted to ensure that none was wasted or increased to make sure the fish got enough to eat and grow as fast as possible.

“What makes this so exciting is that you can condition the fish by making sure that it does not get any feed without it moving into the feeding area,” Søvegjarto told Apollon, his university’s research magazine. “We will not take over the management of the feeding, but we will cut out all human misjudgments and provide an objective tool to the fish farmers, so that they can find the perfect feeding. By being consistent in giving the fish food only when it responds, it is possible to optimize the dose.”

The magazine in 2017 reported that before Cageeye arrived on the scene, many Norwegian fish farms appeared to be significanlty overfeeding.

“Farmed fish are fed far too much,” it said. “Today, the excess feed ends up in the sea. It is not just a question of large financial losses. The unused feed contains a lot of nutrients, which pollute the water around and settle as sludge on the seabed.”

Reducing pollution makes Norwegian fish farmers look better, but the big benefits come in saving money on feed while maximizing the growth rate of the fish. Now comes Bluegrove, which swallowed CageEye and merged it with NorseAqua, a company in the business of developing and produces equipment for fish farming.

The new company is clearly thinking big and globally.

“Bluegrove’s technologies help shape the Internet of Species (IoS), which is a dramatic step up from the Internet of Things (IoT),” its media released proclaimed. “Whereas IoT is paving the way for a ‘fourth industrial revolution’ that is changing how products are made and distributed, IoS has the potential to spark a parallel ecological revolution in agriculture, aquaculture and forestry, where the needs of humans will merge with those of other species and nature more broadly.”

Some might argue the commercial fishing industry in Alaska today is where “the needs of humans…merge with those of others species and nature more broadly,” but the production capacity of salmon in the wild is limited by the amount of available habitat and the whims of nature.

Fish farmers are not so restricted. They are largely limited only by the supply of feed, and there are plenty of companies working on solving that problem from grasshopper growers to maggot harvesters to a company that wants to help fight global warming by turning carbon dioxide (CO2) into fish food.

California-based Novonutrients, with backing from petroleum major Chevron, is now prototyping a fish meal that uses CO2 as feedstock.

“Novomeal, a nutritionally complete substitute for fishmeal, is made from the proteins of bacteria and other single-celled organisms, incubated in giant steel vessels akin to beer vats, called bioreactors,” Inc. reported in June. “Feed is the biggest cost of fish farming, a $232 billion global industry, and, given that the output of the world’s overexploited oceans continues to decline, it’s only getting more expensive. The supply of bacteria, on the other hand, is effectively infinite, as long as you have the nutrients to feed them.”

The company itself is billing its product as an environmentalist’s dream.

“The International Panel on Climate Change recently stated that humanity has until about 2030 to fight the first real battle against climate chaos,” the company website proclaims. “Billions of dollars will be invested in currently early stage technologies in this area in the next few years. At NovoNutrients, we’re building profitable technology to win that battle and the war. We confront unsustainable carbon emissions as well as a few other stark global resource challenges: the over-fishing of our oceans, and feeding a growing and ever more demanding population in the face of limited access to arable land, and other crucial requirements for traditional agriculture.

“NovoNutrients  transforms waste industrial CO2 into food system ingredients, through industrial biotech, and biological innovation.”

In the world of salmon production, the jingle is increasingly starting to sound like “anything nature can do, man can do better.” If it works out that way, Alaska commercial fisheries could find themselves the biggest losers.

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20 replies »

  1. I’ve never really understood your relentless hardon for commercial fishers. OK, according to you they are toast but why does this bring forth such glee? Yes, yes of course you will with great gravity proclaim that that’s not the case. If not so, why spend so much time on the matter? You RELENTLESSLY, stick a fork in eyes. You may actually know the answer to this question: what percentage of your sketches are about commercial fishing/fishers? And, how many of them have anything positive to add? I mean other than what you would perversely call positive.

    • Today’s not-so-witty paragraph: Insult. Unsubstantiated inference. Straw man. Silly question. Grammatically incorrect metaphor. Sarcastic question. Self-righteous question. Snide comment.

      You’re really not very clever. Repeat after me, “Medred is the man.”

      • Thank you for being CM’s lame proxy. Now, how about actually answering the questions?

    • Monk, seems like you are on to something here. It does seem a very large percentage of the authors reports seem to bash the commercial fishery,especially the cook inlet commercial fishery. This may be because this subject arouses so much passion and disagreement that it increases readership. Then again, I have long suspected (and I have no evidence of any kind to support this theory) that the author,seeking to replace lost income when losing his position with adn, possibly has a new source of income. Not greenbacks just a Penney.

      • Gunner & Monk
        Please let us readers know exactly what Medred has written that is factually incorrect. You are certainly entitled to not like what is written. But the facts are the facts whether you like them or not.
        The Alaska commercial salmon fishing business model is slowly failing. Sure there will always be buyers for wild salmon but the numbers of them are decreasing and the price they are willing to pay is falling.
        As for Cook Inlet, UCI has unique problems that will NEVER go away. Too many people chasing a finite number of fish. And it is increasingly clear ( even to people like yourselves who are just now starting to take your heads out of the sand) that the greatest economic benefit to Alaskans and Alaska from UCI comes from sports and P. U. Fisheries. The only scientific reason for maintaining the UCI fisheries is their harvesting power which at this time is greater than the power of the other users. That will change as the commercial fleet continues their downward spiral.
        Medred does not hate the Comm fishers. He is simply pointing out the reality of worldwide competition.

      • Another way to look at Craig’s reporting on these issues is that he is giving commercial fisherman a different perspective than the industry backed line. I know back when I commercial fished we all bitched about the price we were getting paid, this year the actual dollar amount will be lower than it was when I fished for money and inflation hasn’t helped those dollars spending power in the years since.

        If I were still fishing for money, instead of to spend money to fish, I would start a community based model where I supplied fish to my community or any other community that would pay for a high quality product from a face they recognize and a name they can count on. I wouldn’t be selling to a processor who sends my high quality wild caught Alaskan salmon to China for processing and undercuts me by running farming operations in other countries all while paying pays me bottom dollar. I would take a little more effort than the maybe couple of months worth of salmon catching season in Alaska and do some value added catcher processor business, but that’s just me and a few other’s who are actually doing just that.

        There’s a guy in Homer selling whole reds for $4.50/lb, $6.00/lb headed and gutted, and $11.50/lb for frozen and vac packed fillets. That is the future of commercial fishing in Cook Inlet. If you can sell a fresh frozen and vac packaged red fillets for $11.50/lb and ship that anywhere within 24 hours you are in business.

      • AKF, it is not so much what Craig has written about, it is what he has left out. Notably one of the most important aspects concerning the “wild vs farmed” controversy: .
        Roe, cured & smoked eggs, Ikura, sashimi & bait eggs all come from “wild” salmon. The Japanese dining culture, uses salted & cured salmon roe (fish eggs) sprinkled on salads, soups etc. They use it like we use salt, only eating cured roe is a more healthy alternative. Reason why there are Japanese tech workers (working in the egg house, also called hen house) in probably 98% of all salmon processors, processing in Alaska. Majority of roe boxes are exported to Japan & China (then sent to Russia). The Russians over fished their black sturgeon, though salmon caviar is a great substitute.

        In our pink salmon fishery in AK, the roe is worth more than the flesh, reason for all the pink hatcheries. The farmed fish are sterile and cannot produce any roe. Not saying that is a bad thing, just facts, reason why there will always be an Alaska commercial salmon fishery,

        Commercial salmon fishing will change, in some futuristic form. Maybe fish traps, tried out on the Columbia River (last couple seasons) could be a plan. A fishing tool first used in Cook Inlet in 1885. Anyway, before you install all the fish traps, then the State of Alaska can tax all residents and then buy back all the salmon permits at FMV. Novel idea!

      • There’s no reason that farmed fish need to remain sterile. If roe stripping from farmed pinks becomes a viable product, and it sounds like it is, the fish farmers will most certainly figure out how to produce roe. Cheers –

      • I wish. I have received Penney contributions in the past. But it’s been a long, long time. I must have written something that offended.

        P.S. Facts aren’t bashing; they’re just facts. The Cook Inlet fishery has a lot of problems.

    • I have no idea as to the answer to your question, Monk, but if I went back and looked, I’d expect few.

      That said, I have written a lot of stories about Cook Inlet salmon, but they are about the salmon – a common property resource owned by all Alaskans.

      Commercial fishermen, given where their fishery takes place, are in the lucky or unlucky position of being the tail that shakes the do and thus they become an inherent part of any story about salmon management in the Inlet. All of those I’ve known, with an exception of only one or two, were good, hardworking and responsible people.

      Such folks exist it the dipnet and sport fisheries and the guide business as well, and I’m not sure I’ve written “anything positive” about any of them either. Maybe tomorrow someone will ping me to reveal their dipnetter friend caught his annual limit of sockeye and then decided to donate it all to the Food Bank in recognition of the situation we’re now in.

      Or UCIDA will announce it’s members are getting together to donate 5,000 pounds. I’d be happy to do that story.

      • Craig,

        I heard what can only be described as an advertisement on the radio this morning about how the bycatch kings and halibut are being “donated” to local food banks. Now this obviously isn’t UCIDA doing the “donation”, but how benevolent is is of the draggers to “donate”, also known as forfeit and as required by law, their bycatch to local food banks…

  2. Amortize a 32′ Bristol Bay boat over seven years, just like the lender does. They will be the first casualties of this changing market and supply chain. I am hearing .60 for a possible low end price there in BB. The set nets sites will last the longest as they are the cheapest to fish. A question: Who will be the first to co-op a series of these set net sites and negotiate a “trade” for a state of the art fish trap? And where will it happen first? I’m gonna bet on Cook Inlet.

    • Bob,The problem with BB is BB,the pack pulls down the price for everywhere else.
      While I’ll state upfront,never fished the bay,but I’m highly doubtful all 20+million sockey were each bled before tossing in the slush tank.
      .80/lb was a published price I saw reference too.
      Still,just giving them away to make up in volume.
      I think kodiak or S.E would be good alternatives.
      The former over the latter.
      C.I is a natural due to strategic location,but still to much in proximity to the NIMBY’s.

  3. Consumers are continually sold on a protein based diet due to the economic world in which we live in…there is nothing futuristic about artificially raising salmon, only now the bankers are looking for a new way to market their product. The reality is that most Americans eat way too much protein and rarely take in the recommended daily amount of dietary fiber needed for healthy digestion. Hence, we see huge spikes in Colon Cancer and other GI diseases throughout the human body. A plant based diet that is rich in leafy greens and fresh fruit provides the recommended amount of dietary fiber while also providing a wide array of vitamins, minerals and antioxidants…and it uses half the resources required to “grow” animal based protein.

    https://www.wri.org/resources/charts-graphs/animal-based-foods-are-more-resource-intensive-plant-based-foods

  4. This piece points out quite clearly the massive and maybe even unsolvable dilemma facing the commercial
    Salmon fishery in Alaska. But God help anyone in the legislature or on the Board of Fisheries who suggest that the future of wild salmon harvesting is playing second fiddle to farmed fish harvest and that big change is needed. The wild salmon fish industry in Alaska had better change their practices and marketing quickly or it will indeed become a relic of the past. But if you are thinking of running for Alaska office or a Board that has fishery policy making authority you best keep those thoughts to yourself until the election or appointment process is over. Because while the commercial fishery lobby represents an outdated, behind the times industry, it still can muster the votes and sometimes unfair tactics to prevent the election or appointment of anyone who even mentions the words “ fish farm” much less criticizes the industry’s failing business model.
    Regrettably, Alaska’s salmon industry is like the proverbial Ostrich with its head in the sand refusing to acknowledge a problem. All while seeing world market share and income dramatically falling. It is truly sad to witness.

    • Hear, Hear AF!!!! Said that many times in the past. Slapping a “Wild” label on it isn’t going to cut it anymore. The brainwashed younger gen buy into buzz words such as “sustsinable, renewable, or eco-friendly”. Makes them feel good. Kind of like protesting for BLM when you dont even know what they stand for.
      So, as the saying goes, “perception is reality”.

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