A brief reprieve

Atlantic salmon growing in an indoor fish farm in Florida/Atlantic Sapphire

The world’s salmon farmers appear to have had their first off-year since 2016, according to the latest report from Rabobank, the Netherlands-based banking and financial services company that carefully tracks aquaculture.

When all the numbers are in for last year, Rabobank analysts expect them to show a decline in production of about 1.1 percent after a volatile 2021 that saw Norwegian farms help drive a 6.8 percent global increase, according to RaboResarch. Sales of Norwegian salmon were up almost 12 percent that year while Chilean production fell by 7 percent. 

Norway and Chile are the world’s biggest producers of salmon and production in both countries is expected to decline slightly this year as regulators worried about rapid growth in recent years try to tamp it down. Meanwhile, some land-based producers who hoped to make it big into the market by now are struggling to reach profitability.

All of this looks good for Alaska commercial fishing interests that have to compete with the farmed salmon juggernaut in the marketplace but the long-term picture is not rosy. The downturn is expected to be short-lived.

Rabobank analysts predict a “volume expansion of roughly 4 percent in both 2023 and 2024.”

Such increases would push annual farm production to over 3 million metric tonnes of salmon per year by 2024 or nearly 10 times the average annual harvest of Alaska’s oscillating salmon catches. The 49th state, which appears to be at or near peak salmon, puts up big numbers in odd-numbered years and significantly lesser numbers in even-numbered years such as the one just past.

The 2022 catch, according to the Alaska Department of Fish and Game, weighed about 333,000 metric tons, or about 14 percent less than the 389,000 metric tonnes of 2021. This despite an unprecedented catch of more than 60 million Bristol Bay sockeye averaging a healthy 5.1 pounds, according to state data. 

In most even-numbered years, the poundage differences are even larger because the oscillations in the annual Alaska catch are driven primarily by pink salmon, the smallest and least valuable of the six species of Pacific salmon and the one most intensively farmed in the 49th state.

Pinks average two-thirds the size of a sockeye or less. Statewide, the average pink weighed only 3 pounds in 2021, according to Fish and Game. They were significantly bigger this year at 3.5 pounds, but far less in number with a statewide catch of slightly over 69 million significantly less than half the 2021 catch of 161 million.

Nature at work

Even-year and odd-year pinks, or humpies as Alaskans generally refer to them, are fish of the same species with distinct differences. The latest thinking, based on a genetics study by University of Washington researchers, is that the original population of humpies, the salmon the males of which develop huge humped backs as they move toward the spawning grounds, were once part of a large population separated by the last glacial maximum.

Two populations of humpies then evolved with one group in Asia and Northern Alaska and the other isolated in southern Alaska and along the Pacific Coast to Washington state. When the last Ice Age ended, both populations were again free to roam the entire ocean, but remained genetically distinct.

The biggest difference between them obvious to humans these days is that the odd-year fish – whether wild or ranched – have for decades posted much higher rates of return than the even-year fish in Alaska, but tend to be smaller in size.

According to Fish and Game data, humpies averaged 3.49 pounds in 2020, an even-numbered year; 3.27 pounds in 2019, an odd-numbered year; 3.76 pounds in 2018, an even-numbered year; 3.7 pounds in 2017, an odd-numbered year; and 3.93 pounds in 2016.

Most scientists believe the differences in size are tied to the availability of food in the ocean, the amount of competition between various salmon for that food, or a combination of both of those factors though so little is known about the secret, ocean-lives of salmon that no one can really say for sure.

There is less agreement on why odd-year humpies outnumber even-year humpies, but the prevailing thought is that the odd-year fish take such a big bite out of the food base of the Pacific that the even-year fish struggle to get enough to eat in their first months at sea.

None of that much of this science matters when it comes to the business of catching, killing and selling salmon, but the size is an issue in the marketplace. A big issue.

Nobody pays salmon prices for sardines.

The most valuable salmon these days are those that can produce steaks or filets for the grill or barbeque. “Market size” in the farming business, which now dominates global salmon sales, is considered to be four to five kilograms or approximately eight and a half to 10 1/2 pounds.

The only Alaska salmon that regularly reach that much-demanded size are Chinooks, the big kings, of which annual harvests now average only a few hundred thousand per year. These harvests, somewhat ironically, were more than twice as high back in the bad old days when Alaska produced far less salmon overall.

During the Great Alaska Salmon Depression of the 1970s – when statewide salmon harvests averaged but 48.2 million per year –    – king catches averaged 619,000 per year. The estimated catch for last year was almost exactly half that at 310,000, according to Fish and Game. And the last time a year’s catch even reached the 1970 average was in the mid-2000s.

As overall Alaska harvests, driven by big catches of pinks and to a lesser extent Bristol Bay sockeye, drove the overall state harvest to approximately 180-million per year on average for the 2010s, king catches steadily faded.

The 2021 harvest totaled about 265,000 in 2021 with 260,000 in 2020, 299,000 in 2019, 244,000 in 2018, 251,000 in 2017, 522,000 in 2016, 474,000 in 2015; 477,000 in 2014; 323,000 in 2013, 349,000 in 2012, 445,000 in 2011 and 378,000 in 2010. The 2022 preliminary count is under 310,000. 

The average for this period is 354,000 per year, or 57 percent of the average from the 1970s.

Alaska might have seen a big boom in overall salmon harvests since the low numbers of the 1970s pushed the state to make major investments in the ocean ranching of salmon – fish farming with a market-friendlier name – but the state’s most prized salmon has gone bust as the ocean has filled with humpies, both wild and hatchery spawned.

Times change

From a purely business standpoint, the embrace of pinks was not a bad decision in the ’70s when most consumers still bought their salmon in cans as they had for decades.

“In 1937, the market form composition of processed salmon in the U.S. was estimated was 77 percent canned, 19 percent fresh, 2 percent cured, and 2 percent frozen,” a 1976 University of Oregon study reported. “By 1968, the estimate was 77 percent canned, 10 percent fresh, 4 percent cured, and 9 percent frozen.

“The major portion of the commercial salmon catch is processed by canning. This is particularly true of the sockeye and pink
salmon which are landed in such large quantities in such a short period of time that canning has been the only practical method
of preservation. Because both these fish are small, thereby preventing their use as frozen steaks, and because preservation and
distribution technology are not far enough advanced, continued domination by the canned form can be predicted for the commercial salmon industry.”

The prediction turned out to be a bad one, a very bad one.

By 2022, the Alaska Seafood Marketing Institute (ASMI) was reporting only 13 percent of the sockeye catch (measured by value) still went into cans and barely half – 52 percent – of pinks were canned with 28 percent headed, gutted and frozen – so-called H&G salmon – before generally being shipped to Asia for further processing. A lot of these fish then return to Alaska as cheap filets that are sold at major discount chains at a half to a third the price of sockeye filets.

As of today, Walmart is offering frozen pink filets at $6.46 per pound while frozen sockeye filets cost $16.56 per pound. The prices reflect the market dictates of supply and demand.

ASMI did not report where the other 20 percent of humpies went, but they were likely ground into fish meal to eventually be used for newer products of even lower value than humpy filets.

Trident Seafoods, one of the state’s largest processors, now brags that its Cordova North plant in Prince William Sound remains focused on “traditional can-packed and skinless-boneless canned salmon,” but also “produces large volumes of high-quality wild salmon oil for human health supplements. Together with hydrolysates for animal feed and organic fertilizers, Cordova’s product line highlights Trident’s continuing investments in new-product development and full utilization.”

Some of this volume comes from what was once considered fish waste, but the “new products” are also a way to dispose of lower quality or undersize fish.

And any use of the fish is arguably better than the roe-stripping that used to take place in the Sound as the state allowed in 2003.

‘Those regulations… allowed processors to discard low-quality fish and allowed roe stripping, which is the process of taking the salmon eggs and discarding the remainder of the fish,” recorded a later lawsuit over how these harvests should be taxed. “The quality of pink salmon can be evaluated on a continuum. At one end are the high-quality ‘bright’ fish. These fish have bright skin color, pink flesh, and higher oil content. At the other end of the continuum are the ‘dark’ fish.

“Their skin color is dark or mottled, the flesh is pale, and the male fish develop humped backs.”

Alaska values

The significance of the transformation of Alaska from the salmon capital of the north – where the catch in the 1970s was 50 percent or less humpies, about 30 percent sockeye,  and 10 percent chums with the other 10 percent split between cohoes and Chinook – to the Humpy Capital of the world – where the harvest is often near 70 percent humpies as it was in 2021 – has been little discussed in the 49th state, though the shift itself is far from a secret.

The 2018 conclusion of researchers Greg Ruggerone and James Irvine that there then more salmon in the Pacific Ocean than at any time in recorded history but that almost 70 percent of them were humpies has been widely reported.

Less so their later theory that a Pacific-wide salmon crash two years later might have been driven by that humpy abundance pushing salmon numbers to a “tipping point” where the ocean couldn’t produce enough food to feed so many hungry mouths. Early last year, the duo went further and posed the question as to whether efforts to increase Pacific salmon abundance had reached the breaking point.

In a commentary for the North Pacific Anadromous Fisheries Commission titled “Are There Too Many Salmon in the North Pacific Ocean,” they noted the obvious shift in the makeup of salmon harvests as overall salmon numbers have increased, observing that “Chinook and coho salmon, whose combined reported commercial catch  was 1.5 percent of total salmon catch from the North Pacific during 2018/2019 (was) approximately 5 percent of total salmon catch, on average during 1925 to 2020.”

Pound for pound, Chinook and coho happen to be Alaska’s most valuable salmon. Kings, averaged $5.58 per pound statewide at the dock last year and coho, the fish Alaska often calls silvers, brought commercial fishermen $1.57 per pound, according to Fish and Game data. 

High-volume pinks were worth but 43 cents per pound and chums, the state’s other major farmed fish, $1.08. Sockeye sold for, on average, $1.25 per pound, down from $1.34 the year before as the glut of sockeye in the Bay depressed the statewide average. Fishermen in the Bay were getting a dime per pound less than in 2021 while the Bay was churning out 80 percent of the statewide sockeye harvest.

Though sockeye have been steadily shrinking in size over the years, another issue some contend might be linked to competition for food with so many salmon in the Pacific, most are still big enough that once fileted they can compete with farmed salmon in the global market, but the costs of the dated and inefficient harvesting and processing operations in Alaska puts heavy downward pressure on the prices paid the limited number of commercial fishermen allowed to catch those fish.

Alaska tried to eliminate this competition by banning net-pen farming in 1990 when the salmon farming business was in its infancy, but that didn’t work. It mainly allowed salmon farmers elsewhere to get rich. Later efforts to push the idea that wild-caught salmon were environmentally friendlier and tastier also failed.

First the Washington Post blind-tested salmon with a collection of fancy chefs, who decided the farmed salmon tested better, and then the Monterey Bay Aquarium’s “Seafood Watch,” which rates salmon on the basis of those most environmental sustainable, abandoned the idea wild was cleaner and better. Today, most of the “best choice” salmon Seafood Watch recommends to consumers are farmed fish.

That pretty well sunk the premium Alaska fishermen had come to expect from their “wild-caught” fish even if some of them were “ranched.” And all of these factors combined maintain downward pressure on the price paid for wild-caught fish.

Well-known Alaska fisheries economist Gunnar Knapp has said a whole lot more innovation is needed for Alaska to compete with the farmers in the future, but the industry remains grounded in tradition and tied to once state-funded and still state-backed hatcheries producing low-value pinks that go into cans or pouches, fading products in most Western nations, or become dog food or fertilizer although those uses of the fish are better than the roe-stripping the state once allowed.

But even in the markets for fertilizer and dog food Alaska has to compete with the farmers who, because of their high-volume production of high-value salmon steaks and filets, also produce a high volume of what was considered waste but is now processed into pet food, livestock feed, salmon oil, fertilizer, aqua feed (primarily for shrimp) and fuel.

“Today, Norway has developed streamlined modern processing facilities to manage over 650,000 tonnes of seafood by-products each year, and the Norwegian Atlantic salmon industry utilizes around 90  percent of its byproducts,” a peer-reviewed study in press at the journal Marine Policy reports. 

In Scotlands, the authors added,  “the study shows that, apart from the salmon ‘blood-water’ which at this time is not suitable for
human or animal consumption (currently used for fuel and fertilizer production), the majority of processing by-products were downgraded from human grade to category 3 Animal By-Products (as per European Union regulations) and used as raw material for non-edible products.”

Those would be non-edible human products. Mowi, the Norway-based company that is the world’s largest salmon producer and makes the claim that “nothing goes to waste,” is now getting heavily into supplying fish meal and fish oil for pet foods and pet snacks as are other salmon farmers.  You can today get Norwegian salmon snacks at your local PetCo which advertises Dogswell Skin & Coat Jerky “made in the USA with high-quality protein from Norwegian-sourced salmon.”

Farmers have made salmon a big, global business, and Alaska, which was once synonymous with these fish, is year by year becoming a smaller and smaller part of the picture. The Alaska fishing business is sadly looking more and more like a U.S. news business once dominated by hugely profitable newspapers.

Then along came the internet to change the means of production, and those newspapers started dying left and right. Statista, the data-tracking website, reports about 30 percent of American newspapers have gone out of business since 2004, and many of those still surviving are struggling along as shadows of themselves.

This is the harsh reality of markets. It’s hard to sell horse-drawn buggies once people gain easy access to motor vehicles.

3 replies »

  1. On 11/18/22, the state of washington banned net pens in state waters after allowing them for almost 3 decades, stating that wild natural runs could not be protected while allowing these net pens. Canada is soon to follow, planning on eliminating salmon farming in B.C. waters by 2025.
    Craig, you are certainly a journalist with exceptional abilities. Please investigate why the state of Washington and the canadian government now have concerns about salmon farming and please report back to your readers.

    • Both governments have concerns because of political pressure. The science itself is grey, as science often is, but if one wants to “listen to the scientists,” I would refer you to the lengthy report compiled by NOAA and the state of Washington:

      The major conclusion, as I read it was this: “The document includes a discussion on cumulative impacts.
      Overall, cumulative impacts were not found to be significant if locations of nearby farms were
      taken into consideration and if siting would occur in areas not known to be nutrient sensitive. It
      was concluded that additional farms could be sited without significant impacts to Puget Sound if
      these and other considerations were implemented.”

      But there is more there. If you don’t want to read the full report, just search for “General considerations of risks,” which will take you to the section outlining most of the reasons not to net pen salmon. Most of these reasons seem the same as those we have for the net-pen salmon raised here in Alaska, except for the use of Atlantic salmon, a species not Native to the Pacific.

      Of those, the study does concluded – as did an Alaska study before Alaska banned net-pen salmon farming in favor of open-ocean salmon farming – that hybridization is unlikely to occur, because it hasn’t occurred in 100 years of efforts to ocean-farm Atlantic salmon in the Pacific. And without hybridization, any genetic effects are moot.

      On that front, there is more concern about open-ocean farming, but that’s not discussed in this report because, of course, it simply does not work with Atlantic salmon.

      I’m not going to spend any real effort digging into this any deeper becuase it is pretty clear to meet that the market for salmon is going to push most new farms onto land becaue RAS is becoming more and more refined and well, let’s just say, “Superior Fresh”:

      “Superior Salmon – We’re raising the bar on USA farm-raised Atlantic salmon because we care about what you eat, and so should you!

      – “Fed an Organic & Non-GMO Diet

      – “No Antibiotics or Pesticides Ever!

      – “2x the Omega-3s

      – “‘Best Choice’ by Monterey Bay Aquarium

      – “Proudly Raised in the USA”

      And, of course, heavily marketed as “locally grown,” which seems to be the hot ticket in grocery sales these days. At this time, I see the price point – more than $20 per pound – to be uncompetitive in the general market, though I’m sure there are plenty of Yuppies willing to spend the money based on the above sales pitch.

      But, as we have seen in all tech driven businesses, tech steadily drives prices down over time, and I would expect to see that happening here as RAS grows. The Superior Fresh model is interesting in that they are using the waste removed from the water stream as fertilizer for their associated gardens, something which also seems to be catching on globally:

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