The “hydro-canals/ of New Zealand/Mt Cook Alpine Salmon
Already a world leader in the sale of king salmon, New Zealand has developed an ambitious plan to take over what has long been Alaska’s most valuable commercial salmon market.
The southern hemisphere country now exports about 5,000 metric tonnes of such salmon every year. Alaska commercial fishermen, meanwhile, catch about 3 million pounds or something shy of 1,500 metric tonnes of the fish that much of the rest of the world refers to as a Chinook.
Mt Cook Alpine Salmon earlier this month announced the investment of $16.7 million – $6.7 of it from the New Zealand government – in a unique plan to produce an Alaska-sized supply of Chinook using a unique version of the recirculating aquaculture systems (RAS) now popping up all around the world.
The expansion plan calls for “a sustainable 1,000 metric tonne hybrid structure that will use a part flow-through system to emulate the unique conditions of the glacial-fed canals,” the newspaper reported. “The facility will be designed to optimize energy use through gravity-fed water….”
“The design will capture waste, control the flows better to suit the fish, and provide a stable, ideal growing environment. Being land-based, it has the opportunity to deliver greater automation and monitoring systems in an all-weather working environment,” Mt Cook chief executive David Cole told the newspaper.
“The nutrients from the salmon operation will be collected to support an aquaponics crop, taking a circular approach and generating value from a zero-value waste stream. This will link to a wetland area that would further purify the water.”
Unique species
New Zealand is one of the few places in the world where the largest of the Pacific salmon are farmed, primarily because of the slower growth rate of kings when compared to the hatchery-common Atlantic salmon.
The 68-page, New Zealand government study of aquaculture expansion notes that Chinook require 18 to 24 months in seawater to reach the preferred market size of 7 to 9 pounds compared to the 12 to 18 months for Atlantic salmon, the world’s most widely farmed species.
The plan adds, however, that “Chinook salmon food conversion rates (FCRs) commonly range from 1.2 – 1.8. This is higher than the typical FCR for Atlantic salmon (0.9 – 1.2).”
With the increasing harvests of marine baitfish to provide feed for fish farms becoming an international issue, FCRs are a selling point for companies pushing the “sustainability” of their production.
The concern about feedstock for fish farms has driven a significant increase in the production of fish meal and oil from what had once been considered waste from the processing of wild-caught fish, and sparked strong interest in alternative feed resources from grubs to flies to micro-organisms grown in wood waste and algae.
A changing world
Most of Alaska’s commercial fishing industry long ago got buried in the tidal wave of farmed Atlantic salmon that now dictate pricing in global markets, but king salmon managed to hang onto a unique high-value niche.
That was four times the price paid for the next most valuable salmon – coho at $1.45 per pound – and almost 16 times the price commercial fishermen netted for the pinks that dominated the state harvest.
About eight out of every 10 salmon caught by Alaska commercial fishermen last year was a pink. Twenty-twenty-one was an odd-numbered year, and odd-year pink salmon – which are distinctly different from even-year pink salmon – have for decades driven massive Alaska salmon harvests in odd-numbered years.
The rarity of the latter salmon is what makes Alaska kings so valuable. The first-of-season, heavily promoted Copper River kings, brought fishermen an average of $12.07 per pound last year, according to Fish and Game data, but the total catch, unfortunately for the fishermen, comprised a mere 54 metric tons.
Most of the Alaska Chinook harvest comes from the waters of Southeast Alaska, where commercial trollers who harvested more than 1,000 tonnes of the fish last year are under fire for their interception of kings bound for spawning grounds in Canada and the Pacific Northwest.
Late this summer, a federal judge in the state of Washington ruled that the way in which the National Oceanic and Atmospheric Administration (NOAA) was overseeing Alaska Chinook harvests violated the Endangered Species Act.
Treating endangered Columbia River Chinook as something of a spotted-owl of the ocean, U.S. District Judge Richard Jones in Seattle ruled NOAA had to give consideration to both the numbers of those fish returning to their spawning streams and the numbers of those fish needed by Chinook-eating killer whales, another endangered species, before setting harvest limits in Alaska’s mixed-stock salmon fisheries.
The Wild Fish Conservancy, which had put the issue before the courts, heralded Jones’ ruling as a bold step toward better management of Chinook. Kings, the largest of the six species of Pacific salmon, are struggling coast-wide for reasons that are unclear, though competition with those bountiful pinks is one suspicion.
Jones’s ruling, along with continuing political pressure from fishing and environmental interests in Canada and the Pacific Northwest, is expected to lead to even further reductions in the catch of Chinook in Alaska, where almost every offshore fishery picks up some kings from down south.
Filling the void
The Kiwis, whose farmed Chinook have already claimed the title as the “Wagyu beef” of seafood, have apparently seen in this the potential for a market takeover of the sort that gutted prices for wild-caught Alaska sockeye salmon in the 1980s as the global production of farmed salmon amped up.
“A substantial increase in the world’s supply of farmed salmon over the last decade and a decline in the productivity of Bristol Bay sockeye salmon stocks threaten the economic viability of one of the world’s great salmon fisheries and the region that depends on it,” a team of economists observed at the start of the new millennium. “These conditions, combined with
others, have placed the fishery and many communities within the Bristol Bay region on the verge of financial insolvency.”
Luckily for the commercial fishermen who hold permits to fish Bristol Bay and for the region’s economy, global warming brought a big boom in salmon production and prices began to creep upward in part because farmed salmon increased the global demand for salmon filets and steaks.
Rising prices for farmed salmon pulled up prices for wild salmon, Knapp added, “because buyers didn’t have cheap alternatives to wild
salmon.”
There were, however, other factors in play.
Norwegian farmers helped make a mess of the latter with their ability to produce fresh, parasite-free, farmed salmon that could be used in salmon sushi, something rarely eaten in Japan before the arrival of farmed fish.
Salmon sushi is now considered a Japanese staple, something that never would have happened without the arrival of those Norwegian fish, some smart salesmanship on the part of the Norwegians, and the power of markets, the latter being a reality Alaskans tend to ignore.
The market came into play big time here because of an oversupply of Norwegian-farmed fish in the 1980s. The Norwegians were by then producing more salmon than they could profitably sell.
Their options were to reduce production, which would have costs jobs and revenue in Norway, or find a way to grow the market. The country settled on the latter and hired a man named Bjorn Eirik Olsen to sell Norwegian salmon to fish-loving Japanese consumers.
How hard could this be?
Very, as it turned out.
Selling your product as what it is not seldom boosts sales. And the Japanese fish wholesalers, who know their fish well, were wholly aware wild salmon often carry tapeworm larvae.
One of those parasites, Anisakis simplex, has been found to be common in Alaska salmon, but it can be killed by thorough cooking or freezing, which is why most “fresh” Alaska salmon is these days sold as “fresh frozen” or “once frozen” if it isn’t just sold as frozen.
Tapeworms have not been found farmed salmon, which are raised in a controlled environment, and there is now chance of their ever being found in RAS salmon farmed on land because the fish are never exposed to any potential sources of the parasite.
Skillful pitch
But that’s getting away from what happened in Japan.
What Olsen finally did there is offer the salmon to one major grocery-store chain, Nishi Rei, at a price it couldn’t refuse on one condition – that the salmon only be sold as sushi.
Sales started out slow, but grew fast. Salmon now vies with tuna as the top sushi in Japan, and salmon sushi has spread far beyond Japan. It is now a norm in restaurants around the globe.
High-end sushi restaurants now even offer Copper River king salmon sushi from Alaska fish flash frozen to kill all parasites before being thawed and trimmed, and Copper River Chinooks steaks and filets remains, by many accounts, the world’s “most sought after” of salmon, thanks to salmon’s relative rarity and some smart marketing long ago.
It will be interesting to see if the Copper River fish can hang onto its status as something of the Romanée-Conti of salmon or succumbs to some pampered, farmed Chinook fed a diet of organically raised grubs as the Kiwis up their salmon production
Meanwhile, the one given about competition in the marketplace is that it drives down prices whether by lowering them immediately or slowing normal inflationary increases. All of which creates just one more problem for an Alaska industry already battling near overwhelming competition.
Alaska salmon will always be valuable, given that the oceans produces fish for free. But the question is how valuable.
If the farm raised salmon are able to deliver “repeatable quality”………then all the wild caught salmon have to offer is nostalgia or some environmental/health intangible.
Maybe the farm raised salmon can be rebranded as some kind of “Frankenfish”.
Ever heard of Chilean Sea Bass? It’s real name is “Patagonian Toothfish”. For obvious reasons a re-branding was in order.
If farm raised fish can be labeled as “fake fish”, kind of like fake meat, that might change consumer acceptance of farm raised fish.
Alaskan fishermen need to find their own version of Bjorn Eirik Olsen. They need to “Sell the sizzle, not the steak”. Sell Alaskan salmon as something akin to grass-fed beef.
Fake meat and fake fish are all on the horizon, Mark – https://www.businesswire.com/news/home/20221005005315/en/BlueNalu-cracks-the-code-to-significant-profitability-in-first-large-scale-facility – and in a world worried about “carbon footprints,” consumer acceptance doesn’t seem to be a problem.
Alaska tried the frontal assault on farmed salmon years ago. A host of reasons as to why farmed fish are worse than wild fish were trooped out. The campaign wasn’t working even before farmed salmon won some blind tastings against wild salmon. It’s been all downhill since then.
Now wild is potentially more of a liability than an asset given the market position and the money of the farmers.
Starting a war with them appears foolish, especially with RAS operations coming online all over the world with their clean, filtered water and carefully controlled menus for fish feed. Who knows what salmon are exposed to in the ocean. Can you say microplastics? And what polluted food sources salmon might be chowing down on there.
Some RAS operations are already pushing the idea their fish are cleaner and thus “healthier” because their exposure to pollutants can be totally controlled. Getting into any sort of PR war with the farmers would be like taking a knife to a gunfight, especially when Alaska is in the fish farming business in a big way, too, and some scientists think that is messing up the entire North Pacific ecosystem.
That said, I think you have exactly the right idea in selling the sizzle, not the steak. But your example is not so great. Grass-fed beef isn’t exactly lighting the market on fire. Beef sold as “grass-fed” is reported to represent only about about 1 percent of beef sales. https://extension.sdstate.edu/grass-fed-beef-market-share-grass-fed-beef
Wine might be a better model than beef. Ninety-seven percent of the more than 11,000 wineries in the U.S. are reported to be small (less than 5,000 cases) or smaller. Go into a liquor store and look at all the choices you have and most of them rather pricey. Seventy percent of wineries are reported to be selling wines that cost $20 per bottle or more. https://winesvinesanalytics.com/statistics/winery/
They make the money by selling a lot more than the wine. It’s now the “sizzle” but more the terroir, the quest for greatness, the craftsmanship, the loving production, yadda, yadda, yadda.
Thare are some small catcher-processors of salmon doing business in a similar style in Alaska now. Some of them seem to be doing quit well. But there is no collective power there that I can see in the way you find it in Washington wines or Oregon wines or California wines. Instead, they appear to be largely in debt to the Alaska Seafood Marketing Institute (ASMI), which is largely controlled by the state’s major salmon processors.
And they’re still making money off the way the industry operates now. So, so why would they want to change it?
Craig, thanks for the thoughtful reply. All valid points.
Years ago, while traveling in New Zealand, I remember seeing Chinook at a small fish farm along with rainbow trout. New Zealand is also world renown for their trout fishing, both rainbow and brown trout. They farm spruce trees at industrial levels, as well as red deer and elk. It’s been about five years since I’ve had king salmon, for some reason I still buy a king stamp every year. If New Zealand farmed kings and brought them to market, even here in Alaska, they’d sell out.
On a side note, funny thing about the spotted owl…it actually thrives in second growth forests not old growth.