Asking a king’s ransom in Seattle/Pike Place Fish Market
Will the beginning be the best of the season?
The 49th seafood business, a self-proclaimed “cornerstone of Alaska’s economy,” has kicked off the salmon season with a healthy though less than great catch of Copper River sockeye, but the summer ahead looks far from rosy.
Despite the efforts of the Alaska congressional delegation to organize a financial bailout for processors, they are reported to be still sitting on freezers full of sockeye from the record harvest in Bristol Bay last year.
And the prices for farmed salmon, which were steadily on the rise from the start of the year, are now falling. Those farmed fish are direct competitors with frozen sockeye in a very competitive marketplace.
Seafood Source, an industry publication, two months ago began reporting falling seafood sales overall “as occasional seafood-eaters abandon the category.” The downturn comes on the heals of falling sales throughout 2022 as consumers who’d rushed to seafood as an alternative protein moved back toward beef, chicken and pork.
“The drop in sales reversed an upward trend that featured record sales during the COVID-19 pandemic, although seafood sales were still higher in 2022 than in 2019.”
Sales, unfortunately, are continuing to push back toward 2019 numbers.
“Poultry, meat and pork still reign when it comes to the protein preferences of shoppers, with consumers purchasing these foods more than twice as often as seafood,” the report said. ” When shoppers surveyed were asked to choose protein options if all prices were the same, 25 percent would choose seafood over other protein types. However, still more shoppers would choose chicken (32 percent) or beef (33 percent) if protein prices were equal.”
Pricepoints
And prices, at the moment, aren’t equal.
A two-pound “Frozen Wild-Caught Seafood Value Pack” at the Westlake Whole Foods in Seattle was selling for $25.99 today, or about $13 per pound, with “Alaska Sockeye Salmon Fillet(s)” at $16.99 a pound.
In comparison, “Beef Top Sirloin Steak” was at $11.99 per pound, “Boneless Pork Lion Chops” at $7.99 per pound, and “Boneless Skinless Chicken Breast” at $6.49 per pound.
Thankfully for Alaska fishermen, sales aren’t all about price.
“…Those who are seafood consumers, and particularly frequent seafood consumers, are an affluent and lucrative group of shoppers,” according to the FMI report. And among that group, fresh salmon continued to be a strong seller in 2022.
Farmed fish dominate the fresh salmon market, but Copper River king and sockeye salmon – historically considered Alaska “first-of-the-season” salmon – have a cult following that hugely inflates their value.
After the first opening of the Copper River fishery on Monday, Cordova-based gillnetters were reported to be pocketing $10 a pound for sockeyes and $15 per pound for Chinook, the fish Alaskans usually call kings.
Those prices are slightly down from last year, but still healthy. And way in excess of where prices settled during the rest of the 2022 season.
Season-long sockeye prices were slightly above the five-year average price of $2.48 per pound within a five-year range from as low as $2.14 per pound to as high as $2.64 per pound. The annual average price paid for kings over the past five years – from a low of $6.63 per pound to a high of $12.91 a pound – has proven so variable that any comparison of averages is pointless.
Fingers in the pot
No matter how variable the year-to-year dock price, or what the state calls the ex-vessel value, of Alaska salmon, one thing is however guaranteed: the value of the fish will grow exponentially on a flight from Cordova to Seattle.
This was, however, something of a bargain. Sockeye filets were at $69.99 per pound and king filets were at $79.99 per pound. Both Cordova fishermen and Seattle fish mongers benefit handsomely from the belief that these “most sought after fish in the market” are “often regarded as one of the best tasting salmon in the world, if not the best” as Seattle’s Pure Seafood Fish Market pitches them.
Whether they are or not is debatable, but Alaska fishermen working anywhere other than the Copper River delta would kill for prices anywhere near what fishermen are now getting for their catch there.
Fish and Game data reflects a statewide, average price of only $1.25 per pound for sockeye last year and $5.58 for kings. The latter are much in demand but little in supply anywhere. The entire, statewide, commercial catch of kings was less than 311,000 fish last year.
There were days last summer on which purse seiners in Prince William Sound harvested more pink salmon than the number of kings caught all year. And 2022 was an off year for the smallest of the Alaska salmon as even-numbered years almost always turn out.
A 2022 Sound catch of 28.5 million, even-year pinks is forecast to push past 55 million as the odd-year pinks, an almost different species, come back this year, according to Fish and Game.
About two out of three of those fish Alaskans call humpies are also expected to be of hatchery origin as the state’s industrial-scale ocean ranching continues to mine the marine food chain.
The problem with the three-and-a-half-pound, average-size humpies is that they’re not worth much. A lot of them are so small they have to be turned into canned salmon, and canned salmon is a low-value product.
As a result, Sound humpies traded at an average of 53 cents per pound to fishermen last year, and prices are expected to creep down this year with many processors struggling with bills related to last year’s record harvest of Bay sockeye.
Keeping those fish frozen in storage facilities is costly, which is what led the Alaska Seafood Marketing Institute (ASMI) to turn to the Alaska Congressional delegation to plead for a big federal buy of salmon.
“This will be a boon for Bristol Bay and other communities immersed in sockeye fishing and processing. The purchases will relieve some of the pressure from the current large inventories of canned and frozen products as harvesters and processors move into the upcoming 2023 summer harvest season.”
Everybody loses
Despite government subsidization pulling some wild sockeye out of the market, there is still reported to be a glut that is expected to push down prices paid fishermen, and that has broad economic effects.
Compared to the oil industry, the fishing industry pays little in taxes for the resources it mines to the sea, but the taxes it does pay are vital to many of the state’s small communities and help cover the cost of managing and policing the fishery.
Fish and Game says taxes collected from the industry have now increased to the point where they cover the full cost of management and policing after years of those costs being subsidized by the general fund although the Institute for Social and Economic Research (ISER) at the University of Alaska has taken issue with that.
Whatever the case, state revenue depends on the number of fish caught and their value. The taxes are based on a percentage of the profits from the sale of the fish. The biggest chunk of revenue comes from the Fisheries Business Tax that collects 3 to 5 percent of the value of every salmon sold in Alaska.
Year to year, that value goes up and down, but management and policing costs for commercial fisheries remain relatively fixed.
Another $19 million or so is passed on to private, non-profit aquaculture associations controlled by commercial fishermen to help fund hatcheries or funneled off to organizations involved in seafood marketing or development.
Once the state turns over the payments to communities, most of them rural and often in dire need of funding, there isn’t enough left to cover the budget of the commercial fisheries division of Fish and Game.
And Colt estimated Fish and Game’s revenue needs as less than 70 percent of the average $70.9 million the state spends on fisheries every year. The Department of Commerce and Economic Development, according to Colt, spends about $12 million per year promoting fisheries, the Department of Public Safety spends more than $5.5 million policing them, the Department of Revenue spends about $1.5 million collecting the fees and taxes, and there are smaller costs for the Department of Environmental Conservations monitoring of fish processing plants and the Department of Natural Resources costs of managing leased fishing sites.
As Colt also noted, however, the annual value of the fisheries harvest fluctuates wildly, and ” revenues change with changing prices.” That can be good or bad.
The record catch of Bristol Bay sockeye drove the estimated, in-state value of the fishery to over $720 million last year, according to Fish and Game, nearly two and half times the $295.2 million of the even-numbered year of 2020 with a classically weak run of humpies compounded by pandemic-related processing problems.
No one is expecting a season that grim this year, but despite forecasts of another strong run of Bay sockeye and Sound pinks, revenue could be well down from 2022.
“Fish and Game says taxes collected from the industry have now increased to the point where they cover the full cost of management and policing after years of those costs being subsidized by the general fund although the Institute for Social and Economic Research (ISER) at the University of Alaska has taken issue with that.”
A number of important weir projects have been cut due to funding shortages. These projects provide the best escapement data for sustainable management of salmon. Its not a funding shortage, its a budget priority shortsightedness. IMO.
as AFK would invariably say: “let them eat pinks”
Don’t see any mention of permit or vessel renewal fees, or crewmember license fees. That isn’t chump change, and probably far exceeds the cost to the state to administer.
I don’t know about the comparative cost to administer, but in terms of state spending, it’s chump change. The state alcohol tax takes in orders of magnitue more.