Alaska commercial salmon harvests since 1900/Alaska Department of Fish and Game

Who got the money?

A news analysis

One of the greatest Alaska stories never told centers on the multi-billion dollar bonanza that the combination of global warming and open-ocean salmon farming has delivered the 49th state’s commercial salmon fishing industry over the past 50 years.

Legacy media reporters are not about to touch this story because it runs contrary to the prevailing dogma that a warming planet is in all ways bad and because it would not please the various, do-gooder foundations and trusts that now help to fund much of today’s legacy and legacy-connected media.

Fifteen years ago, however, scientists weren’t shy about admitting to this reality.

“In the North Pacific Ocean, the annual catch of Pacific salmon increased from the late 1970s to the early 1990s due to favorable oceanic conditions associated with long-term climate change and successful hatchery programs,” Masahide Kaeriyama from Japan’s   Hokkaido Tokai University freely reported to the North Pacific Anadromous Fish Commission, a treaty organization, in 2009. 

Kaeriyama also warned that “biological interaction between wild and hatchery populations should be an important consideration in the sustainable management of Pacific salmon production based at the ecosystem level.”

That warning was ignored. Hatcheries helped to pump the Pacific full of pink and chum salmon in the years that followed. And by 2018, scientists were reporting there were more salmon in the Pacific than at any time in human history, although 40 percent of the biomass was made up of ocean-farmed chums and pinks, the smallest and least valuable of the species.

Pinks were by then trending toward dominance with possible consequences for larger, more valuable and longer-lived species like sockeye, coho and Chinook, the biggest of the salmon that Alaskans call king salmon.

Still, the Alaska Department of Fish and Game was not shy in bragging about its involvement in helping to create a northern salmon boom even if some scientists were questioning whether Canadian and Pacific Northwest salmon are paying the price for the successes of Alaska, Russia and Japan in loading North Pacific pastures with hatchery fish.

“Recent commercial salmon harvests (2012–2021) annually averaged 182 million fish – an increase of 469 percent from the 10 years of harvests before hatchery contribution (1967–1976),” the Fish and Game proclaimed in its 2022 Alaska Salmon Fisheries Enhancement Annual Report.

The hatcheries account for about a third of this increase, leaving the wild fish component of the catch averaging about 121 million fish per year or about 33 percent more than the best decade of the past.

That decade spanned the years from 1930 to 1939 when the federally managed harvest in the Alaska Territory averaged 91 million salmon per year, or half of the total 2012-2021 harvest of 182 million.  The biggest catch in the 1930s – 130 million salmon in 1936 – was about 71 percent of the yearly average for the decade from 2012 to 2021 in a state where average annual salmon harvests have grown steadily decade by decade.

On the 50th anniversary of Alaska Statehood, Fish and Game raved that “the statewide catch of 110 million salmon in 1980 ranked just below the record catches in the mid-1930s and would have been higher had not a lengthy price dispute limited the catch in Bristol Bay.”

In the years to follow, a 110 million harvest would come to be considered a bad year. 

To date there has been no detailed accounting of how much money this boom poured into the bank accounts of salmon processors and commercial fishermen, but with average, annual payments to fishermen increasing by approximately $200 million to more than $800 million per year for decades, they alone appear to have benefitted to the tune of $10 billion or so thanks to climate change and the state’s open-ocean farming or what is disingenuously called “ranching.”

(Editor’s note: For simplicity, all dollar figures in this analysis have been inflation-corrected to October 2023 per the U.S. Bureau of Labor Statistics inflation calculator.)

Together, the vagaries of nature and the works of man combined to turn an industry worth an average of $365.5 million per year to commercial fishermen from statehood until 1975 into an industry that paid them one and a half to three times that on average for every year in the nearly four decades that followed.

By 1992, Gunnar Knapp, now retired from the University of Alaska’s Institute of Social and Economic Research but then an economist there, was calculating that from 1980 to 1991, as the North Pacific emerged from the cold-water years from 1950 to early 1970 into the new age of warmer water, the Alaska salmon business grew to be worth an average of $1.23 billion per year to fishermen. This was more than three times what it had been worth before based on what the state calls “ex-vessel” salmon prices.

Ex-vessel prices, according to the state, are “the value of the first purchase of raw fish.” The state also tracks a second value – “wholesale prices” – that “represent a weighted average price per pound by species group, product group, area, species, and product” once processed in Alaska.

Wholesale prices reflect the value of the fish to salmon processors. A report compiled by the state Office of Management in 2023 concluded that for 2021 and 2022 the average wholesale value of salmon production in Alaska was just over $2 billion while the average ex-vessel value for the same years was $798 million. 

Year-to-year, there is considerable variation in Alaska ex-vessel versus wholesale prices, but in general, Alaska salmon tend to generate more revenue for largely Seattle-based processors  – in this case about 66 percent more – than for Alaska commercial fishermen.

Global warming and hatchery farming of the ocean have been as good to these processors as they have to Alaska’s commercial fishermen. The processors were doing so well as the 1980s came to an end and the 1990s began that 4,500 Bristol Bay commercial fishermen accused them of price fixing and sued, arguing they’d underpaid fishermen to the tune of $764 million (in 2023 dollars) from 1989 through 1995.

At the time the lawsuit was filed, the market was flooded with Bay sockeye and processors had dropped the price to fishermen from as high as $5.76 per pound in 1988 to 90 cents to $1.46 per pound in 1991, according to a history later written by attorney Doug Fryer.

After examining the market at the time and the prices being paid, an Anchorage Superior Court judge dismissed the lawsuit saying there was insufficient evidence of price fixing to submit to a jury, but that ruling was overturned by the Alaska Supreme Court and the case eventually went to trial.

After listening to about three months of testimony, it took an Anchorage jury less than five hours to decide that there was no evidence to support the accusations of price fixing. So ended the biggest boom days of this decades-long run of salmon bounty, though the benefits of global warming and hatcheries would continue to accrue.

Markets

The problem for Alaska fishermen and processors from the mid-1990s on has been that larger volumes of salmon to be canned and frozen do not necessarily translate into larger profits in a global market altered by technology.

As Fryer wrote of the situation at the time of the 1995 price-fixing lawsuit, “the inventory of frozen salmon in Japan was at record high levels in 1989 when the size of the Bristol Bay run more than doubled. The yen devalued, making American fish more expensive in the Japanese market and the Japanese economy started a downward trend, making the less expensive Hokkaido chums more in line with Japanese household budgets.

“In addition, farmed salmon, though still produced at modest levels, was gradually impacting the world market. Like a hurricane just over the edge of the horizon showing early warning mare’s tails, the changes to be created by farm fish were anticipated by few.”

The farmers would forever change a market once dominated by Alaska salmon. Buoyed by the high and rising prices being paid in the 1980s, Norwegians who had been experimenting with growing salmon in pens managed to gain a foothold in the salmon market that encouraged them to keep refining their salmon farming techniques.

Eventually, they grew their industry into a world power.

Norway, a country about two-tenths the size of Alaska, now produces almost three times as much salmon per year as Alaska produces in its best years. In 2023, when Alaska’s fourth-highest harvest on record amounted to 417,1287 metric tonnes, Norwegian farms exported 1.2 million tonnes, nearly three times as much despite a 2 percent decrease in production from the year before.

The value difference between the Norwegian fish and the Alaska fish is even greater than the difference in volume given that the Norwegians, long the world leaders in farmed salmon, grow most of their salmon to six pounds or more for slaughter into filets while Alaska fishermen catch tens of millions of five-pound and smaller salmon largely destined for cans, pouches or fish meal.

“The Norwegian Atlantic salmon industry is by far the world’s leading producer with exports of $7.6 billion in 2021,” the Cook Inlet Aquaculture Association (CIAA), one of Alaska’s struggling free-range, salmon farming operations reported last year.  “By comparison, Alaska salmon catches were valued at $720 million in 2022.”

That is a more than ten-fold difference in value. Still, the huge volumes of low-value wild and semi-wild salmon now being harvested in Alaska have helped the state’s modern-day fishermen stay well ahead of those of yesteryear.

More fish at lower value still equals more revenue for Alaska commercial fishermen than they ever saw in the past. And there are a lot more fish.

Before 1980, according to the official Fish and Game history, there was a  100-year span of time in which there were only six years when the annual, all-species harvest of Alaska salmon topped 100 million fish.

Since 1980, there have been but two seasons when the harvest failed to top 100 million, and since 1990, there have been none. The decade of the ’50s when harvests averaged 41.4 million per year, and the two decades from 1960 to 1979 when harvests averaged about 50 million per year, are so long gone they are forgotten.

The current 10-year average harvest is more than four times larger than in 1950 and approaching four times larger than that of the 1960 to 1979 period. The volume of salmon has made up for the fact the fish aren’t worth nearly as much.

From 2014 to 2023, the 10-year average annual payment to fishermen for their catches came to approximately $560 million per year, according to Fish and Game data.  That’s about a 53 percent increase over what fishermen earned in the 1960s and into the mid-1970s.

It is also a 53 percent increase shared by a smaller number of fishermen than were licensed to fish commercially in Alaska in 1973, the year before Alaska enacted its so-called Limited Entry law to restrict the number of fishermen allowed to harvest salmon.

Limited entry whittled the more than 22,000 people who held licenses to commercial fish in 1970 down to 16,264 who were considered serious enough fishermen to be granted limited entry permits. The permits number would further shrink to 14,536 by 2005, according to the then-director of the state’s Commercial Fishery Entry Commission (CFEC).

The number of salmon permits is now down under 14,000, according to the CFEC, meaning fewer people are slicing up the $560 million pie of today than were divvying up the $365.5 million pie of yesteryear.

So although the average, yearly salmon catch of nearly 185 million fish over the past 10 years has been worth only about $3 per salmon compared to the more than $13.50 per fish value for the salmon caught in 1960-1975, today’s fishermen do better than those of yesterday.

The approximately 14,000 permit holders are averaging $40,000 per permit in annual sales compared to 22,000 fishermen in the old days taking in, on average, about $16,600 each.

This more than two-fold increase in average earnings doesn’t come close to the state’s claimed 469 percent increase in salmon numbers, but it is significant. A warming North Pacific Ocean and Alaska’s hatcheries, which now produce about a third of the annual harvest, albeit of smallish pink salmon, have done these fishermen well.

Crisis in the fisheries

Despite this, an industry that has enjoyed a windfall of billions thanks to climate change and state-funded hatcheries has shared none of the wealth with Alaskans and is now in crisis and asking for state assistance.

The Alaska fishing industry, unlike the Alaska oil industry, pays little in taxes.

Some, primarily rural, Alaska communities where salmon are processed in large volumes have benefitted significantly from the salmon boom thanks to the state’s Raw Fish Tax Program that grants municipalities in which fish are processed 40 percent (down from 50 percent in the past) of the state fisheries business tax collected from fish processors operating inside municipal boundaries.

But fish are processed in only 95 of Alaska’s 321 communities, many of which remain unincorporated, and there is large-scale processing generating significant revenue in less than a third of those 95.

The tax-sharing program, meanwhile, leaves the state more than $10 million short of the funds necessary to manage and police the fisheries, according to a 2022 ISER study. The funding shortfall is made up by the state’s so-called “general fund.”

Were Alaskans paying taxes, this would create a situation in which taxpayers were directly subsidizing a state industry, but since Alaskans aren’t paying taxes, the money comes out of the oil revenues, earnings from the Alaska Permanent Fund and other taxes that cover the cost of state government.

None of the windfall collected by commercial salmon fishermen and processors thanks to environmental changes and what were originally state-funded hatcheries has gone back to the general fund, and now the hatcheries, like the processors, are in trouble.

They are in debt to the state to the tune of about $90 million, and some commercial fishermen involved in the “associations” that today run the hatcheries are just beginning to realize that they could potentially be held responsible for paying off this debt.

One of those fishermen, commercial seiner Tom Buchanan from the coastal community of Seward in September launched a petition aimed at stopping the assessments now imposed on CIAA members or, as he put it, stopping CIAA from “digging me deeper into debt with more loans for worthless, often detrimental projects.

“Because the loans CIAA takes out are my responsibility to repay – yes, they really are a financial burden to me – I need to stop their continuing loan debt. At $20 million dollars IN DEBT, with no viable revenue, they need to be stopped. I’m on a mission to return control to the people who LIVE IN SEWARD and depend on our local salmon,” he wrote on his blog.

CIAA was last summer using so-called “cost recovery” fisheries to outfish its association members and still wasn’t pulling in enough revenue to cover the high costs of operating hatcheries, which is the exact problem the state of Alaska faced in the 1990s.

“North Slope oil revenues to Alaska declined in the 1980s and natural salmon production increased,” an official Fish and Game history reflects. “As a result, Alaska explored the option of private sector operation of state salmon enhancement programs.

“By the later 1990s, the Division of Commercial Fisheries neither funded nor operated salmon hatcheries.”

The facilities had been turned over to private, nonprofit associations run by commercial fishermen who legally committed to pay the operating costs of those facilities. The original plan was to tax their individual catches to pay the costs, but when it became clear those taxes would be onerous, the state agreed to let the hatcheries operate so-called “cost recovery” fisheries to capture and sell hatchery fish.

The hatcheries in Prince Willliam Sound, home to the state’s oldest and most successful open-ocean fish farming operations, last year took 20 percent of the region’s harvest of 52 million salmon to cover their costs and hatchery brood needs.

The cost-recovery harvest of 13.4 million salmon was nearly three times the 4.9 million claimed for cost-recovery a decade earlier and reflects the low prices paid for pink salmon, the smallest of the species but the most cost-effective to ranch.  The cost-recovery fishery in 2013 represented about 5 percent of the total harvest of 99.7 million salmon of which 93 percent were pinks.

The Sound hatcheries appear financially stable, but CIAA is another matter, and its fugre does not look good given the downward trend in Alaska salmon values. The decline in value of the state’s salmon is recorded in the $1.2 billion in annual, ex-vessel payments Knapp cited in 1992 slipping to approximately $674 million per year from 1992 to 2008 and now down to about  $560 million per year since then, according to state data.

This is a troubling change across the board.

The less paid fishermen the less the state collects in taxes, the less fishing communities get in revenue sharing, the less revenue is available to cover the costs of managing and policing the commercial fisheries, and the more the state must subsidize the industry.

Some hatchery advocates think they can produce their way out of this predicament by pumping even more farmed fish into the North Pacific, but the marine pastures already appear to be at carrying capacity if not beyond.

Fearful that Chinook salmon, the biggest and most coveted of the Pacific species of salmon, the fish Alaskans call “kings,” are becoming the American bison of the Pacific with hatchery pink salmon (the sheep) and hatchery chum salmon (the cattle) squeezing them off their range,  the Seattle-area-based Wild Fish Conservancy this year dropped a bomb on the Alaska commercial fishing industry with a petition to the federal government demanding it list the state’s Chinook salmon as threatened under the Endangered Species Act (ESA).

The Conservancy claims “the major causes of the region-wide declines in Chinook productivity and abundance are predominately due to factors in the marine rearing and migratory environment. Global warming and climate change along with massive releases of hatchery pink and chum salmon from Japan, Russia, and Alaska adversely impact marine food webs.”

The evidence to support that claim is not airtight, but it is growing. Some of the world’s top authorities on Pacific populations two years ago asked the North Pacific Anadromous Fish Commission (NPAFC) to ponder the question of “Are There Too Many Salmon in the North Pacific Ocean?”

“Overall, pink salmon represented approximately 74 percent of total salmon abundance in 2018/2019,” the scientists reported. “Most pink salmon are of natural origin, but abundance of hatchery pink salmon during 2005 to 2015 was greater than abundance of wild chum salmon and approximately equal to abundance of wild sockeye salmon.”

The NPAFC is a treaty organization established by the Convention for the Conservation of Anadromous Stocks in the North Pacific Ocean with the U.S., Russia, Canada, Japan and South Korea as signatories.

“The primary objective of the NPAFC is to promote the conservation of anadromous stocks in the…international waters of the North Pacific Ocean and its adjacent seas north of 33 degrees North” longitude, according to the U.S. State Department.

For better or worse, the commission has no real powers. It can only advise the member nations, and it is unlikely the three leaders in hatchery production – the U.S., Japan and Russia – would be willing to scale back their open-ocean farming.

Japan, which was the pioneer in the business, has already reduced its hatchery releases significantly and would likely balk at a request to do more. A cash-strapped Russia struggling to overcome Western economic sanctions tied to its war on Ukraine has no incentive to cooperate with the countries backing those sanctions. And nearly all of the U.S. hatchery production comes from Alaska where the hatcheries are firmly entrenched as local economic mainstays.

And then there is the state of Alaska which remains fixated on producing more salmon when the market is indicating that what the state should be fixated on is getting more value out of the salmon it already produces.

Editor’s note: This is story is an updated version of the original. It was edited on April 9, 2024 to add some historical information on salmon and climate change in the early 2000s.