Alaska is expected to see another near-record salmon season this year with the Alaska Department Fish and Game forecasting a harvest of more than 190 million of the fish or somewhere in the range of 190,000 to 200,000 tonnes by the common, international measure.
Once a harvest of this size – more than twice the annual average for the entire 100 years of the 20th century – would have been a market rattling event, but today it is barely noteworthy.
Norway, a country less than a quarter the size of Alaska, is on pace to bring 1.2 million tonnes of salmon to market this year, and the technologists in that country are talking about the potential to grow their production to 3 million tonnes per year by 2030.
Over the course of the first three months of the year, Norway has already sold 297,200 tonnes, according to Fish Farmer Magazine. That is about a third again as much as the expected Alaska catch for the entire summer.
None of this bodes well for the economic future of hydrocarbon-powered, 49th state fisheries designed to maximize inefficiencies in a world where salmon farmers are increasingly maximizing efficiency.
Alaska’s cowboys of the seas appear destined to be penned in by the world’s farmers in a replay of the story of cattle in the American West.
Norway is but one country heavily involved in the salmon farming business today. Chile, Scotland, the Faroe Islands, and Canada are all significant producers with lesser production in Australia, New Zealand, Iceland, France, Ireland and Finland.
Meanwhile, land-based, recirculating aquaculture systems (RAS) farms are threatening to lead to an explosion in salmon aquaculture almost everywhere.
The Emirate of Dubai, one of the seven entities that comprise the United Arab Emirates in the Arabian Desert at the southern end of the Persian Gulf, is already farming salmon on land as are a number of companies in the U.S. from the U.S. state of Florida north to Wisconsin.
That’s near the same volume as the record Bristol Bay sockeye harvest of near 106,000 tonnes in 2018. All from one salmon farm slated to cover less than 350 acres in an industrial park near Sotenäs, a waterfront town about a two and half hour drive south of Oslo.
“The increasing efficiency and availability of farmed Atlantic salmon production,” the firm added, “brought down the real price of salmon by over 70 percent from the early 1980’s (when commercial salmon farming began) to 2002.”
Prices began climbing after that date, but remain below the 1980’s price in real terms, and there is no sign that will change, given the farmers’ constant focus on efficiency. RAS operators today are talking about the possibility of reducing operating costs with energy savings of 15 to 20 percent.
Open water farmers, meanwhile, are experimenting with closed-containment systems that both lower operating costs and minimize waste.
“The business concept is to offer a solution to the salmon farmers that make farming more profitable, more sustainable and with higher fish welfare,” says FISHGlobe, a Norwegian company which bills its fully contained farm as a potential game-changer for the aquaculture business.
An unstoppable force?
To truly understand the threat these farmers pose to the future of one of Alaska’s oldest and still largest industries you really need to drive across the Great Plains of America and witness humankind’s ability to reshape the planet to produce food.
The American Heartland has essentially become one massive farm.
From the Montana-Canada border in the north to the Texas-Mexico border in the south, more than 80 percent of flyover country is now in use for farming, according to the U.S. Department of Agriculture.
“The grid-like pattern that spreads across the encompassing flatlands (between Omaha and Lincoln) is typical of the Great Plains region and of Nebraska in particular, where 91 percent of the total land area is covered by farms and ranches,” the Earth Observatory of the National Aeronautics and Space Administration (NASA) reported after staring down at the planet from the International Space Station.
This is the legacy of the only species of planetary life ever to break through the natural barrier to population growth – food.
It should be added that it took us long enough.
For a couple of million years, the research indicates, the population of the ancestors of today’s humans remained limited to less than 10 million hunter-gatherers surviving in the rough, junglesqe “harmony” with nature much like all the other animals.
They were few in number because wild lands would only support a few. On a global scale, 10 million people seems an almost unbelievably tiny number considering the world is home to about 7.7 billion hungry mouths at present.
Almost 40 million people today call Tokyo home. The number is near 30 million in New Delhi, Shanghai, São Paulo, Mexico City and Cairo. New York City, the largest community in the U.S., is home to near 20 million, almost twice the number of people who once occupied the entire planet.
What sparked this population explosion was the Neolithic Revolution, now often called the first agriculture revolution, that began a cultural shift from a population of hunter-gatherers to one of farmers.
“The Neolithic Revolution started around 10,000 B.C. in the Fertile Crescent, a boomerang-shaped region of the Middle East where humans first took up farming,” the History website records. “Shortly after, Stone Age humans in other parts of the world also began to practice agriculture. Civilizations and cities grew out of the innovations….”
The so-called “subsistence lifestyle,” much romanticized in Alaska, might have been a wonderful way to live, but it was also a very hard way. People died young, and starvation was a regular form of death.
Primitive agriculture changed that dynamic and over the centuries man’s tampering with nature to produce ever more food (and everything else) became increasingly sophisticated. After generations and generations of this, the drive to search for ever-better technology to “improve” on nature might well be genetically bred into humans.
The Alaska experiment
The net-pen salmon farmers of Norway who led the revolution that boosted farmed salmon production from almost nothing in 1980 to the level of today were not alone in tampering with salmon in the 20th century.
Alaska started its own program to farm the sea in 1971. The only real difference between it and other farming operations was a decision to free-range the fish rather than pen them up in the marine version of feedlots.
By the 1980s, Alaska was deep into what it calls the “salmon ranching” business, and though then state-owned hatcheries were later turned over to private, nonprofit corporations run by commercial fishermen, the production of farmed fish in Alaska remains large.
Hatchery production and intensive fisheries management helped boost Alaska’s annual salmon harvests from an average of 56.2 million per year in the 1970s to an average of near 180 million per year for the past decade.
But there are indications that the ability to manipulate nature in this way to produce more fish is near its limit.
The shrinking size of Alaska salmon and the falling numbers of the longer-lived salmon species returning to streams around the Gulf of Alaska are seen by some as a sign the pasture for the free-ranged salmon of the eastern North Pacific is near or past its carrying capacity.
“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,” a national team of scientists wrote in a peer-revied study published in Nature Communications late last summer “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 suggested Alaska might be paying for the increased numbers of pinks – the smallest and least valuable of Alaska salmon – with losses in the size and numbers of big, more valuable Chinook (king), sockeye (red) and coho (silver) salmon.
Those are the fish that compete most directly with farmed salmon in the market. Most pinks have historically been canned, although there appears to be a growing market for frozen pink salmon filets at a price point below that of sockeye, coho and Chinook salmon.
Alaskans tend to turn their noses up at the flavor of the mild-tasting salmon they usually call humpies because of the humpbacked shape of the backs of male spawners, but other Americans do not appear as biased against the flesh of the smaller, paler cousins of the salmon more popular in-state.
Big wild flavor
It’s all about taste, which is where Alaska commercial fishing interests once thought the market would be won.
“It is a reasonable hypothesis that in addition to superior taste and abundant nutritional value of Alaska wild salmon, the ‘harvested in Alaska’ mark” will attract Chinese consumers and generate the same sort of price premiums Norwegian salmon enjoy, the University of Alaska’s Sea Grant program concluded back in 2010.
By then, however, the “taste’s better” idea was already dying.
“Farmed or Wild? Both Types Of Salmon Are Good And Good For You,” University of California scientists concluded that same year. And if that wasn’t bad enough, they also suggested farmed fish might be environmentally friendlier.
“…Wild salmon have a feed-conversion ratio (FCR) around 10:1,” they reported. “Farmed salmon need the same well-balanced diet to live and grow. They are fed a combination of fishmeal, fish oil and other land-based protein sources. The FCR is around 1:1.”
Farmers have come under fire for increasing the harvest of baitfish to be ground into fish meal to feed salmon. But if their operations convert those baitfish to salmon flesh 10 times more efficiently than wild or ranched salmon, the farmers might be environmentally friendlier than Alaska’s hatcheries or nature.
The farmers have also responded to this criticism by turning increasingly to plants and insects for feed, a move that has caught the attention of big agriculture in the U.S. Minnesota-based Cargill, a privately held global food corporation that generates more revenue than any other U.S. company, now operates 38 aquaculture feed facilities in 20 countries and has announced it is looking to expand those operations.
“I think people are going to continue to consume animal protein,” the company’s chief executive officer, Dave MacLennan, told Bloomberg in February. “We believe they’re going to consume more fish over time. We’re making investments in fish feed and in fish processing. That is a key part of our future strategy.”
Already a big, competitive, market-dominating business able to control production to maximize profits and brush aside competition from wild fish, salmon farming looks destined to become even bigger.
That should not come as a surprise. They have a huge market advantage in that they can supply fresh salmon – the most profitable fish – to supermarkets year-round.
You can buy it fresh today for $7.99 per pound at most Meijer supermarkets in the Midwest. Meijer is one of the most popular chains in Illinois, Michigan and the surrounding area.
The only “wild-caught” alternative it offers is frozen pink salmon at $1 per pound less. Though humpies are tastier than they are given credit for by Alaskans, they are not exactly known for their world-class flavor and texture.
And when it comes to taste, University of Washington professor of fisheries economic Chris Anderson, who has been running blind taste tests of salmon on his students for three years, says what appears to matter most is how fish treated.
He noted his students had a tendency to judge salmon as much on texture as on taste, and “how the fish is handled before and during freezing makes a big difference in the texture,” he told the website Today’s Farmed Fish. “Often fish can be caught, frozen whole, thawed, then processed and frozen a second time, which effects the cell structure (texture).”\
Needless to say, it is easier to handle fish at a farm than bouncing around in a boat in the sometimes rough waters of Alaska, and then there is the matter of delivery time to processing plants.
From a quality control standpoint, farmers hold big advantages over commercial fishermen and processors in Alaska.
“The blind tasting lets us talk about how the very fish from some of the fisheries we’ve studied actually taste,” Anderson said. “This is important because what matters most to the consumer is how the fish tastes.
“Most people are surprised in spite of themselves to learn they prefer the farmed fish,” he added, especially students who “consider themselves informed seafood consumers and frankly, often say they avoid farmed fish because of arguments against aquaculture….”
Alaskans might scoff at the idea farmed fish taste as good as wild fish. They all know wild salmon taste better. But what matters isn’t what Alaskans think but how markets function.
The farmers now control the market, and they are gaining more control every day. The implications are already trickling down on the state.
Seattle-based OBI Seafoods – formed when Ocean Beauty Seafoods and Icicle Seafoods merged last May in an effort to gain economies of scale – has announced it will not open its Excursion Inlet plant in Southeast this summer.
The company blamed a shortage of fish, but the move looked to be aimed as much at fortifying the supply chain for its Petersburg plant about 125 miles south of Excursion Inlet.
“All of our Southeast salmon will be processed using our Petersburg facility as our Southeast hub for this season. This allows us to centralize our operation, right-size our production, and provide additional flexibility on product forms to maximize market demand,” OBI spokeswoman Julianne Curry told Seafood Source.
Southeast-based Trident said it would also keep shuttered its Wrangell plant about 30 miles south of Petersburg. It blamed a forecast weak run of chum salmon, but how few salmon is too few is an economic decision based on profit margins.
The narrow profit margins in the commercial salmon processing business in Alaska have had companies disappearing, consolidating or merging for years now.
Wild Alaska salmon will remain a marketable commodity for decades given the costs of producing the fish are minimal, but the economic footprint of what was once the state’s most important industry is destined to shrink because the world is changing.
And it is changing fast.