Winning losers

The Berufjörður salmon farm in Iceland/Wikimedia Commons

The global pandemic is causing problems for salmon farmers, but that is far from good news for Alaska commercial fishermen, processors or the few 49th state communities with economies still heavily dependent on salmon harvests.


Because the farmers now control a market in which Alaska lawmakers gambled on becoming the OPEC of salmon with the help of a 1990 ban on salmon aquaculture in the 49th state. 

At that time, most of the world’s salmon came from ocean fisheries.

And now?

The “total Pacific salmon harvest was slightly above 600,000 metric tons in 2020, and this is the smallest annual harvest since 1988,” according to the February newsletter of the North Pacific Anadromous Fish Commission (NPAFC). “We don’t know what processes affect the annual fluctuation of salmon production. Therefore, it becomes an urgent issue to identify the controlling factors for salmon survival.”

The salmon farmers know what processes affect the annual survival of their fish because the farmers are in control of the product. The Food and Agriculture Organization of the United Nations (FAO) reported the farmers produced 2.6 million tonnes of salmon in 2019.

No good 2020 analysis of production is available yet, but the FAO in early January estimated a 3 percent increase, which would bring production to near 2.7 million tonnes.

That coupled with the ocean catch equates to a global salmon harvest of 3.3 million tonnes of which ocean-caught fish – the harvest of which is primarily split between Russia and Alaska with Japan the next biggest producer – accounted for but 18 percent in 2020.

Market share

All of this in a market where the FAO says “continuing growth in farmed Atlantic salmon supply has put downward pressure on prices as boosted retail sales have not fully compensated for the evaporation of foodservice demand.”

And yet, despite the price drop and the FAO’s estimate of a smallish 3 percent increase in production, Norway, the world’s biggest producer of salmon, registered 11 percent growth in 2020 even as profits plunged, according to government officials.

The Norwegian Seafood Council reported a $185.8 million drop in the value of seafood exports in January, and Tom-Jørgen Gangsø, the director of market insight and market access blamed “a significant fall in the export value of salmon” in an online statement.

Most of the drop was blamed on the closure or partial closure of restaurants where fresh, Norwegian salmon has long been a preferred product.

“A small bright spot compared to the previous closure is that in many markets it seems that seafood counters in grocery chains are being kept open”,  Gangsø added.

That might be a bright spot for the Norwegians, but when coupled to the 11 percent increase in Norwegian salmon exports, it’s a hint of a dark summer ahead for Alaska’s commercial fishermen, salmon processors and the communities still dependent on them.

Norway’s farmed salmon is now trading at an average price of NOK 50.70 per kilogram. That translates to a U.S. price of 6.02 per kilogram or $2.73 per pound. And these fish have increasingly moved from the restaurant trade into the “fresh-frozen” and frozen markets of groceries where they and other farmed salmon compete head-to-head with Alaska’s ocean-caught fish.

The price cited by Norway’s seafood council is what would be considered a “first wholesale” price in the 49th state. First wholesale prices reflect what the fish are sold for after processing.

Headed and gutted Alaska sockeye salmon, the state’s top product and the one that competes most directly with farmed salmon in the market, was last trading at anywhere near this price in 2010 when it averaged $2.80 per pound, according to Alaska Department of Fish and Game records.

The average, “ex-vessel” price of salmon that year – the price paid fishermen – was $1.20 per pound, according to the agency. 

With COVID-19 still raging – which drives up costs for processors who must test, house and sometimes treat the huge number of nonresidents they import as workers for the short summer season – industry insiders are expecting summer prices to be near or below that $1.20 benchmark.

Losing ground

The U.S. inflation calculator says a dollar today is worth about 80 percent of what it was worth in 2010. Thus $1.20 per pound for a salmon in 2021 would equal $1 per pound for salmon in 2010.

This is the best measure of the losing war of attrition in which Alaska’s commercial fishermen and processors are engaged. With every improvement in salmon aquaculture, the costs of production for farmers creep down and the real value of ocean-caught Alaska salmon declines.

And when nature intervenes, as it did this year, the problems that confront the producers of ocean-caught salmon appear larger than those that confront the farmers.

“Weak runs and high costs associated with COVID-19 preventative measures negatively affected wild salmon catches in 2020 in Alaska and the Russian Far East,” the FAO said. “A reported 272,000 tonnes of salmon were caught in the Russian fisheries, 40 percent lower than 2019 and 50 less than in 2018. In Alaska, catches amounted to some 241,000 tonnes, 42 percent lower than 2019 and 12 percent lower than 2018.”

Whether this is a one-season event or a start of a shift in Pacific ocean production is unknown, but Alaska has been riding a salmon production high that cannot go on forever.

Alaska catches, driven largely by low-value pink salmon, have grown from an annual average of under 50 million in the years immediately before Statehood to averages of 157.5 million per year in the 1990s, 167.4 million per year in the 2000s, and about 180 million per year in the 2010s.

The trend could continue, but the odds are against it.

“Population fluctuations are undoubtedly one of the most fascinating phenomena in ecology. Some of the earliest writings known to man describe outbreaks of pests, such as the fabled locust plagues in Egypt. Some species, such as the snowshoe hare or larch budmoth, cycle through changes in abundance as regular as clockwork,” Canadian ecologist John Fryxell has observed. “Many other species exhibit more irregular patterns of oscillation, and some have even been shown to fluctuate in truly chaotic fashion. Making sense of this bewildering array of dynamical patterns has been a central theme in population ecology, involving some of the leading scientists in both the experimental and theoretical realms.”

Salmon are among those “many other species,” and precious little is known about what influences their survival in the ocean where they spend most of their lives. Salmon research has for decades focused on the freshwater streams and rivers in which young salmon are hatched and, in general, spend a small part of their lives before going to sea.

This has long been thought the key component of salmon survival, fueling the popular belief that hydroelectric dams alone have been responsible for the collapse of Chinook salmon runs to the Columbia River and other river systems in the Pacific Northwest.

Canadian scientist David Welch and colleagues at Kitama Research Services in British Columbia, Canada, bombed that long-held view in November with a peer-reviewed study that found a 65 percent decline in Chinook numbers in streams and rivers from the still-wild Alaska Panhandle south through largely undammed Canada to the Pacific Northwest and Northern California.

The study published in Fish and Fisheries pointed the finger directly at ocean survival as the key factor in the survival of the largest of the species, the salmon Alaskans commonly call “king.”

“The abundance of salmon in the North Pacific has reached record levels,” the Kintama researchers wrote. “However, most of the increase is in the two lowest valued species (pinks and chums) in far northern regions, at least in part due to ocean ranching.

“In contrast, essentially all west coast North American Chinook populations including Alaska are now performing poorly with dramatically reduced productivity.”

Farming by another name

Ocean ranching is the Alaska form of fish farming. When the state banned net-pen farming, it left the door open for hatchery production and ranching run by regional aquaculture associations controlled by commercial fishermen.

Vladimir Radchenko, the executive director of the NPAFC, has described those hatcheries as a government-driven support system for commercial fishermen.

“Currently, pink salmon fisheries, hatchery propagation, and processing in Alaskaenjoy substantial subsidies and government support, including preferential lending to fishermen, providing them with financial assistance in a case of underfishing, as in 2016, and procurement interventions for surplus canned pink salmon, which
are used for the (U.S.) State needs, in school meals, and national and international humanitarian programs,” he wrote in an analysis of pink and chum hatcheries around the Pacific in the February issue of the NPAFC newsletter.

Some scientists are questioning whether government-subsidized hatchery programs for pinks are hurting other species of Pacific salmon.

A peer-reviewed study published in Nature Communications in August pointed to a decade-long decline in the size of sockeye, coho and Chinook salmon. The shrinkage appears tied to diets worse than those of the past.

The reasons could be many, the scientists admitted, but “the only consistently negative effect across all species was that of Alaskan pink salmon abundance, although this effect was weak in most species.

“Intriguingly, the shared acceleration of size declines post-2000 occurred during a period of unusually high (though variable) pink salmon abundance in Alaska, suggesting high pink salmon abundances could be accelerating or exacerbating size declines. Our results provide further evidence that wild and hatchery-enhanced pink salmon abundance in the North Pacific has reached such high levels that they appear to be exerting an influence on ecosystem structure and function.”

The study indicated hatchery salmon – a vital economic support for commercial fishermen who target high-volume, low-value pinks – could be hurting other fishermen by shrinking the size and number of high-value sockeye, coho and Chinook on which they depend.

The latter group of fishermen would now appear to be facing a double whammy in the form of downward pressure on prices from ever more efficiently, farm-raised Atlantic salmon that compete directly with Alaska’s highest value products in the market.

Historically, 70 to 80 percent or more of the pink salmon were canned, although the market in the last decade increasingly shifted to the shipment of headed and gutted pinks to China where they were fileted for sale in that country or packaged as a frozen product for sale in the U.S. as “Wild Alaskan Pink Salmon Fillets,” “Product of China.”

Sales of those fish have been hampered over the past couple of years by the U.S. trade war with China, but Safeway is at the moment offering the product online for $4 per pound, half or less the cost of a sockeye filet.

How long this market model works is an unknown, but Radchenko warned that future “growth is constrained by filling of the Chinese market with Russian-caught pink salmon and China’s gradual re-orientation to more valuable salmon species.”

The Haisheng Group, the largest apple grower in China, announced earlier this month that it is planning to invest $800 million to $1.6 billion in salmon farms in that country in the next few years. It joined Nordic Aqua Partners and Pure Salmon, which also have big plans for Chinese salmon farming.

Pure Salmon “intends to build five, 20,000-tonne facilities in China, to target the major population centers of Beijing, Chengdu, Shanghai, Guangzhou and Shen Zen,” Salmon Business reported at the start of the month.

At full capacity, those five hatcheries alone would be cranking out more than 40 percent of the volume of the entire catch of Alaska salmon last year. And they are slated to be just a few of the farms coming online in China.

All are to be land-based and use recirculating aquaculture systems (RAS) to grow salmon in clean, filtered water. Superior Fresh, a U.S. company that has been pioneering RAS, uses the salmon waste filtered from its water to fertilize organically grown greens. 

RAS facilities avoid past concerns that net-pen, salmon farms can pollute bays and fiords if they are not properly placed and that salmon might be raised in areas where local water sources could contain toxic runoff.

Some net-pen farmers are now turning to RAS similar farming concepts to counter arguments their businesses harm the ocean. Fisheries and Oceans Canada calls the new model “integrated multi-trophic aquaculture (IMTA).”

“Instead of growing only one species (monoculture) and focusing primarily on the needs of that species, IMTA mimics a natural ecosystem by combining the farming of multiple, complementary species from different levels of the food chain. For example, one form of IMTA is to grow fish, invertebrates (like mussels and sea cucumbers) and seaweeds close together for the benefit of each crop and the environment,” the Canadian federal agency says.

The approach ensures “uneaten feed, wastes, nutrients and by-products of one species to be recaptured and converted into fertilizer, feed and energy for the growth of the other species,” a Fisheries and Oceans whitepaper says. “IMTA farmers combine species that need supplemental feed such as fish, with ‘extractive’ species…(such as) filter feeders (e.g., mussels) and deposit feeders (e.g., sea urchins), and seaweeds (e.g., kelps). The filter feeders and deposit feeders use the organic particulate nutrients (uneaten feed and feces) for nourishment. The seaweeds extract the inorganic dissolved nutrients (such as nitrogen and phosphorus) that are produced by the other farmed species. Essentially, extractive species act as living filters.

“The natural ability of these species to recycle the nutrients (or wastes) that are present in and around fish farms can help growers improve the environmental performance of their aquaculture sites. In addition to their recycling abilities, the extractive species chosen for an IMTA site are also selected for their value as marketable products, providing extra economic benefits to farmers.”

Alaska commercial fishermen and processors have fought a long war to try to undermine farmed salmon as environmentally unfriendly. It hasn’t slowed the steady increase in the production of farmed fish.

And it now appears to have mainly inspired technological innovations that are making it harder and harder to sell the idea that farming salmon is worse for the environment than catching them at sea.

Even more worrisome are increasing indications the Alaska propaganda effort could come back on the Alaska industry to add to its market problems.

Recognized by the Monterey Bay Aquarium’s “Seafood Watch” as a “Best Choice” salmon buy – a distinction earned by no Alaska salmon – Superior Fresh aggressively pitches its fish to the “green” market.

“While other salmon are fed unnatural diets, supplemented with pesticides, antibiotics and GMOs, and hurt natural ecosystems, your Superior Fresh salmon raise the bar on nutrition and sustainability,” the company says, while offering a salve to consumers who might be worried about the fate of oceans already struggling against global warming and acidification.

“Global fisheries are adversely impacting our ocean ecosystems,” the company proclaims. “Superior Fresh is a sustainable alternative working to save our oceans.”

It seems only a matter of time before most RAS salmon farmers jump on this “eat-our-salmon, save-the-oceans” bandwagon as if the Alaska salmon fishing industry didn’t  have enough problems already.












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