Commentary

And the winners are….

One of the big conclusions to be drawn from the Alaska Seafood Marketing Institute’s (ASMI) 2022 report on “The Economic Value of Alaska’s Seafood Industry” is that the people involved in fish farming and wild fish management in the 49th state are doing a whole lot better economically than the people catching fish.

The newly issued report shows that in 2019 those working in hatcheries and management made almost twice as much money per year as the people commercially netting fish in the ocean.

Technically, Alaska in 1990 banned salmon farming, but that only covered the net-pen style which began in Norway before surging into life as a big global business in the 1980s. By then the 49th state was already deep into farming the sea with its hatchery production of free-ranging Pacific salmon already exceeding that of all other West Coast states combined.

Alaska hatchery supporters prefer to call this activity “salmon ranching” rather than “salmon farming,” which has long been under fire from environmentalists for polluting bays with salmon feces and uneaten feed; tainting the water in places with chemicals intended to treat the penned fish to keep them healthy; encouraging the spread of sea lice, a common salmon parasite, to wild fish; and allowing Atlantic salmon, the main net-pen product, to escape into the Pacific.

Alaska legislators banned net-pen farming in part to deal with the headache of regulating farms to prevent environmental problems, but mainly in the belief the state could control the salmon market.

Alaska was at the time the biggest salmon producer in the world, and it was thought that keeping salmon farms out of Alaska bays and Inlets would hold down global production.

That idea proved badly wrong. Farmed salmon now own the market.

The World Wildlife Fund (WWF), a nongovernmental organization that has for years been pushing net-pen farmers toward more responsible management, today calculates that 70 percent of the salmon eaten around the world come from farms where they are raised in either net pens or increasingly in enclosed tanks in land-based facilities that avoid the environmental and salmon-escape problems ocean farmers face.

The remaining 30 percent share of the market is largely split between Russia and Alaska with salmon production in British Columbia, Canada, and along the U.S. West Coast now relegated to a footnote in the data.

The ASMI report didn’t highlight the wages to be made in farming salmon in Alaska, but a reader of the organization’s annual report doesn’t need to be a math wizard to spot the significant earning differences in the fishing business.  Here are the numbers:

Those 3,800 people in management and hatcheries collecting $239 million would be banking average annual earnings of about $62,895 per person. These are not quite oil-industry-size wages, but the earnings are almost twice the $36,787 the U.S. Census reports as the average for workers in Alaska in 2019.

Oil industry workers earn about two and a half times the state average, according to the Alaska Resource Development Council, which is what makes the oil industry such a big part of the state economy.

Most of those in the fishing industry – the management and hatchery workers being the exception – are sort of on the opposite end of the scale from those in the oil patch, according to the ASMI numbers.

In the processing business, 21,700 people earning $495 billion works out to annual earnings of about $22,811 per person. That’s $79 below the poverty line for a couple living in Alaska, and more than $6,000 shy of the poverty line for the average American-size family now said to number 3.15. 

The good news is that these earnings do go farther in other states and even more so in many other countries, and the Alaska Department of Labor reports that “Alaska imports around 75 percent of its seafood processing workers.”

“Some processors hire workers from around Alaska, but most of their employees come
from out of state or are foreign workers under the H-2 visa program,” according to the agency’s November 2021 issue of Alaska Economic Trends. “For every Alaskan working in the plants, processing companies import three from outside the state.”

More than 3,000 of those workers come from the so-called Northern Triangle countries of El Salvador, Guatemala, and Honduras, according to the Cato Institute. 

The cost of living for a couple in El Salvador, which uses the U.S. dollar as its national currency, is less than $11,200 per year, not counting rent, according to the Travel Tables calculator. This would obviously make fish processing earnings collected in Alaska go a lot farther.

And the cost-of-living is much the same in the other North Triangle countries. The downside is that they are all plagued by what the Council on Foreign Relations calls a “complex criminal ecosystem.”

Still, a low-paying job in Alaska has to be considered a welcome escape for any Northern Triangle resident who can land one.

Alaska fishermen doing better

Commercial fishermen working in Alaska – about two-thirds of whom claim to be Alaska residents – are luckily much better off than workers in the processing plants. The 31,300 skippers and crew earning $1.01 billion in 2019 works out to average annual earnings of just over $32,268 dollars per fisherman or about $4,520 less than that $36,787 the U.S. Census reports as the average for the state.

Unfortunately, Alaska resident fishermen get the short end of the stick in this accounting, given the distribution of this income.  Fishermen claiming Alaska residency made up 63 percent of the state’s commercial fleet in 2019, the ASMI report says, but they collected only 39 percent of the revenue.

These percentages would put the number of Alaska resident fishermen at 19,719 with their combined earnings at just under $394 billion. These numbers work out to an average annual income of just slightly under $19,976 per person or about a quarter of what the average oil-field worker earns in a year.

This average is, however, misleading in that some of the state’s fisheries are far more valuable than others, and commercial fishermen who hold limited entry permits tend to earn far more than the crews who work for anyone.

The broad differences in potential earnings in the fisheries are well represented in the prices paid for state limited entry permits, which are privately owned by commercial fishermen and can be bought and sold in an open market.

Copper River Boats & Permits, a business that markets limited-entry permits, today had a Lower Yukon River salmon driftnet permit available for $10,000 while the asking prices on Prince William Sound seine permits ranged from $193,000 to $265,000 with package sales to include a boat and permit to fish the Sound in the range of $395,000 to $535,000. 

Seiners have been the big beneficiaries of a state hatchery program originally set up to produce “common property” salmon for all fisheries, but since turned over to private, nonprofit corporations controlled by commercial fishermen who primarily raise pink salmon to be caught in the commercial fishery and to pay the costs of hatchery employees and operations.

“In 2019, the commercial fleet caught about 50 million hatchery-produced salmon worth an estimated $118 million dollars in ex-vessel value,” according to the Alaska Salmon Fisheries Enhancement Annual Report prepared by the Alaska Department of Fish and Game “Hatchery fish contributed 25 percent of the statewide commercial salmon harvest.”

Almost 71 percent of those fish were pink salmon, the smallest and pound-for-pound least valuable salmon in the state, but they do have one big factor going for them.

“Pink salmon are the most economical to rear because they have a short rearing time, one winter in the hatchery, and have the shortest life cycle of Pacific salmon, two years,” the report noted. “This means pink salmon provide a quick return on investment and provide the highest economic return for the production costs.”

Growing controversy

Thanks to hatcheries, primarily in Alaska and Russia; management for maximum sustained yield of pinks, and, from most indications, warming waters in the North Pacific, pink salmon have become the dominant salmon in the north.

Especially in odd-numbered years, they outnumber the total of the other fives species of salmon combined. They have become so plentiful in odd-numbered years that some theorize that their disruption to the food chain leads to a drop in pink returns in even-numbered years because even-year pinks can’t find enough food to eat.

The theory is far from proven, but Alaska pink salmon harvests, which are dictated by the size of pink salmon returns, have ridden a steady rollercoaster up and down for a decade.

Since 2011, according to Fish and Game data, the odd-year catch of pinks has averaged almost 159 million fish per year – well in excess of the historic annual average harvests of all species of Alaska salmon dating back to the start of the Alaska commercial salmon industry in the late 1800s.

The even-year catch, meanwhile, stands at an average of only 70 million or about 44 percent of the odd-year harvest.

While all of these pinks have been good for seiners who harvest the fish and for processors who’ve won big government contracts to supply canned pinks for child nutrition and related domestic, food-assistance programs, scientists, some environmentalists and even some fishermen have begun to raise questions about what the management of pinks for maximum abundance is doing to bigger, more valuable Chinook (king), coho (silver) and sockeye (red) salmon.

From the southern end of the Alaska Panhandle south to northern California runs of these fish, which compete with pinks for food at sea, are generally withering.

While Alaska has witnessed steady, pink-driven increases in decadal average harvests of salmon – going from an annual average of 122.4 million per year in the 1980s to 180 million per year in the 2010s – “Pacific salmon populations have been in decline (in Canada) over the past four decades,” Michele Gamage reported in Canada’s Hakai magazine in October. “For most of the past century, Canadian fishers caught an annual average of 24 million salmon. That number was cut in half in the early 1990s, and since then has slowly decreased to just two million in recent years.”

The situation has been much the same in the U.S. Pacific Northwest.

Dams have been blamed. Logging has been blamed. Urbanization has been blamed. Global warming has been blamed. Disease and lice possibly linked to British Columbia’s 109 net-pen salmon farms have been blamed, leading the Canadian government to announce plans to transition all the province’s salmon farms to land-based operations by 2025, the Vancouver Sun reported in August.

But there are growing indications the big problem might really be in the ocean.

David Welch and colleagues at Kintama Research Services in Nanaimo, B.C. in November 2020 published a peer-reviewed study documenting a 65 percent decline in the productivity of Chinook salmon from Alaska south to Oregon no matter whether the fish were hatched far from any fish farms in wild, glacial fed rivers where the water still runs cold or in areas hit hard by logging, urbanization, dams, high temperatures and nearby fish farms.

“The abundance of salmon in the North Pacific has reached record levels,” they observed. “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.”

Then came a peer-reviewed study in Global Change Biology in December that reported “evidence that hatchery pink salmon releases negatively affect wild pink salmon productivity, likely through competition between wild and hatchery juveniles in nearshore marine habitats.”

It further warned that “because Pacific salmon migrate long distances at sea, large-scale hatchery production may have unintended adverse effects on other species of salmon originating from distant regions,” as well.

Still, the scientists admitted that passing judgment on Alaska’s massive hatchery program is not easy at this time.

“…Quantifying the tradeoffs between industry performance in the fishery supported by the large hatchery program and productivity and abundance of wild salmon populations within and outside (Prince William Sound) are left for future extensions of this work,” they wrote.

There is no doubt the hatcheries are generally good for the Prince William Sound economy and obviously, according to the new ASMI report, they are good for the people who work in them.

 

 

 

 

 

 

 

 

4 replies »

  1. Armin F Koernig father/founder of the AFK Hatchery on Evans Island, PWS, once said: “let them eat pinks”!

    • Yes, but that’s back when a salmon was a salmon. Back when a beer was a beer, which I know you are old enough to remember.

      Back when Hamm’s advertised “a beer is a beer is a bear until….https://www.youtube.com/watch?v=WyWm8USVRoU

      and Hamm’s tasted just like Budweiser/Pabst/Schlitz/Schmidt and everything else including Coors, which was somehow exotic anyway east of Colorado, and it tasted like, yes, Budweiser/Pabst/Schlitz/Schmidt….

      It’s a different world today.

      • I believe what your trying to say is “The flavor of said beers, is directly proportional to the distance from the road system and/or package store”.
        From a purely economic stand point where numbers dont lie, pinks unfortunately probably bring the most and quickest economic stimulus to the local economy.
        But the cost of ocean ranching unfortunately may not be able to be born nor measured by others.

Leave a Reply