Alaska Department of Fish and Game

Worst salmon season in 20 years

The Alaska Department of Fish and Game has finally released its summary of the 2024 commercial salmon fishing season in the 49th state, and the only good news is that the total, all-species catch crept over the 100 million fish number that defines a wholly disastrous season.

This one was just bad. Very bad.

“A total of 101.2 million salmon were harvested in 2024, a 56 decrease from the 2023 total harvest of 232.2 million salmon,” the agency reported. “The 2024 commercial salmon fishery harvest for all species was valued at approximately $304 million, a significant decrease from $398 million from the 2023 season.”

The agency statement failed to mention that the $389-million, 2023 season was largely considered a financial disaster due to the low prices paid commercial fishermen.

“The 2023 commercial salmon fishery all species harvest was valued at approximately $398.6 million,” the agency reported at the end of October last year, “a significant decrease from 2022’s value of $720.4 million.”

Despite slightly better prices being paid for the state’s most valuable salmon this year, the 2023 harvest dropped to but 42 percent of the 2022 value while inflation was at the same time shrinking the dollar. The federal inflation calculator puts today’s value of the 2022 harvest at more than $763 million.

So in real dollar terms, the 2024 harvest was worth less than 40 percent of the 2022 catch. Alaska hasn’t seen numbers this low since 2002 when Bristol Bay, home to the world’s largest sockeye salmon fishery, went bust.

Bay sockeye are high-value salmon and when they don’t show they take a big bite out of the statewide value. The state in 2002 reported the “smallest inshore run in 20 years” in the Bay came in at only about 50 percent of the 20-year average. The value of the catch that year was pegged at $29.75 million ($51.4 million in 2024 dollars) – 77 percent below the 20-year average. 

In the years that followed, warming waters in the North Pacific Ocean (is it OK to credit global warming?) changed that. Harvests started climbing in 2004 and since then, the Bay has witnessed a couple of decades of bounty. An annual sockeye harvest that averaged 15 million per year from 1895 to 2012 had by 2019 more than doubled to a decade-long average of 31.5 million.

The boom only continued in the years that followed with the state now reporting that this year’s sockeye run of 51.6 million fish was the 10th largest inshore run since 2004 and 7 percent above a now 48.2 million average run for the latest 20-year period.

The Bay’s 2024 problem wasn’t a lack of fish. It’s problem was Alaska’s statewide problem:  small fish – the 2024 Bay sockeye were the smallest ever – and low prices.

Still, given a statewide, all-species harvest of 450.1 million pounds, the statewide salmon harvest of 2024 would have had a value almost $100 million higher if all salmon had brought the 89 cent per pound base price of Bay sockeye, according to state numbers. And if all Alaska sockeye had been worth the $1.91 a pound paid for Copper River sockeye, the total sockeye value would have risen to $374 million, pushing the value of the statewide, all-species catch close to that of the massive catch of more n 232 million salmon in 2023.

Money, money, money

And if Alaska’s salmon processors were confident they could sell all Alaska sockeye at the $5.04 per pound at which Norwegian farmed salmon were wholesaling their fish in July – according to the global, price tracing Y Charts – they might have been able to pay $1.91 per pound for all Alaska sockeye this year.

Then again, any processor paying Copper River prices for all Alaska sockeye would have been a fool given the volatility of the global salmon market in which farmed fish set the base price. As of this writing, the average price for those Norwegian fish is down to $3.28 per pound, according to Y Charts.

The prices of farmed salmon and the price fluctuations make for three big problems for Alaska: 1.)  The 49th state is now a small player in a global market controlled by farmed salmon, 2.) In most years – this one being an exception – Alaska primarily harvests low-value salmon; and 3.) Capitalism with those damn competitive markets.

The salmon farmers are now blamed for the decline in the value of Alaska’s high-value salmon – almost wholly sockeye and coho salmon given that Chinook, the biggest of the salmon species is flirting with endangered species status –  while the Russians are accused of pushing down the prices for the state’s lower-value salmon, chums, and lowest-value salmon, pinks.

Or to reframe the situation differently, Alaskans are now whining about the difficulties of competing in a truly competitive market. Welcome to a world where the economic system called capitalism rules even in such places as authoritarian communist China, the world leader in what has come to be called “state capitalism.”

Alaskans know state capitalism, too.

Alaska politicians got into it deep in 1989 when the state banned the feedlot-style of farming salmon that now dominates the global market in favor of ocean-farming salmon thinking that with lower production costs – you don’t have to pay to feed salmon turned loose on the ocean range and there are no grazing fees – and the ability to market “wild-caught” salmon as “wild” and thus “natural” and better the state could continue to control the salmon market.

The plan didn’t work.

Technological evolution put a spike through the heart of the idea. The farmers in the years after 1989 managed to lower their costs of production enough to largely beat global inflation.

Thus a farmed salmon that 20 years ago sold for $7.30 per kilogram in 2024 dollars now has that aforementioned price of the moment of $3.28 per pound or $7.21 per kilo. Apparently, the farmers can afford to sell salmon at this price when they must and reap their profits from the peaks in market fluctuations.

The Index Mundi price tracker indicates an average price of $9.28 per kilo for much of last year despite the huge monthly fluctuations. A price of $9.28 per kilogram translates to about $4.22 per pound for a salmon headed, gutted, filleted, deboned and ready to be moved into the retail market.

Salmon processors in Alaska can only afford to pay fishermen a fraction of that price because processing salmon in the Bay is expensive. Nearly all the labor has to be flown in for the short salmon season, and along with paying wages for processing plant workers, the processors need to cover the costs of feeding and housing them.

Then there is the cost of fuel for maintaining tenders to service the fishing fleet and those costs can run into the tens of thousands of dollars per day especially in years of big runs when processors have been forced to haul tendered fish to ports as far away as Kodiak to finish processing them.

Andy Wink, a fisheries economist who has long worked in the Bay, in 2017 estimated that to get a salmon filet to market at a cost of $4.73 per pound, including some profit, processors invested $3.56. They were at that time paying commercial fishermen $1.17 per pound for their salmon.

Given inflation, that 2017 filet at $4.73 per pound would cost $6.05 in 2024 dollars, according to the inflation calculator used by the U.S. Bureau of Labor Statistics. This would constitute a $2.77 premium over the average price per pound of farmed salmon at this moment, although the premium would shrink to about a dollar if farmed salmon were selling at their July peak of over $5 per pound.

This sort of situation leaves processors facing two key questions: 1.) Will consumers pay an extra dollar per pound for a wild or “wild caught”  salmon filet? and 2.) Will the high base prices for farmed salmon hold in a market prone to significant month-to-month fluctuations?

Last year’s crash in the prices paid Bay fishermen for their sockeye was largely blamed on processors sitting on large inventories of 2022 Bay sockeye stacked up in expensive-to-run cold-storage facilities. Those fish were moving slowly in the market because sales were being undercut by cheaper farmed salmon.

Some of the processors have now gone out of business.

The higher prices paid for Bay salmon this year, according to Fish and Game data, are an indication the remaining processors are gambling on a return to the high prices seen for farmed salmon this summer. And once premiums get paid to Bay fishermen for delivering bled and chilled fish, the final prices paid by processors this year are almost certain to climb above $1 per pound.

That’s a significant improvement on last year, but the long-term reality is that prices are never going to get back to the peak price of $2.35 per pound paid fishermen in 1988 when Alaska owned the salmon market. Corrected for inflation,  that price translates into $12.42 per pound in 2024 dollars.

Even if processors could process a salmon for that $3.56 per pound as in 2017 and pocket some profit, the wholesale price of the fish would be about $16 per pound meaning retailers would probably need to sell it at something near $20 a pound to get their profit out of it.

That’s about $7 per pound above the $12.99 at which Alaska sockeye is selling in Costco stores around the country at this time. It’s doubtful that Costco, a $240 billion per year company which was in September 2023 ranked third behind Walmart and Amazon in the National Retail Federation’s 2023 ranking of the top 100 U.S. retailers, would even bother to try to sell Alaska salmon at that price point. 

Alaska wild salmon might taste better than farmed salmon from anywhere – although the culinary experts debate this – but how many people would be willing to pay near twice as much per pound for a wild salmon as for a farmed salmon.

The bright side

The upside of the Alaska salmon business –  if there is one these days – is that the bulk of the salmon harvest in recent years has been comprised of pink salmon. Pinks are the smallest, by far most abundant, and the lowest in value of the salmon species.

Alaska faces no competition from net-pen farmed Atlantic salmon in this segment of the market although it does face some competition from both wild and ocean-farmed pinks from Russia, which seem to be benefiting from a warmer North Pacific in the same ways as Bay sockeye.

The Russian salmon ranchers piggybacked on the success of large-scale ocean farming begun by the state of Alaska in 1973 with the intent of saving an industry facing radically reduced harvests due to a perfect storm of overfishing by both foreign, offshore fleets and Alaska inshore fishermen and cold water in the North Pacific.

That cold water fundamentally reduced productivity.

State officials who pushed the hatchery program said their aim was to use state-run hatcheries to add tens of millions of salmon to an annual, wild-salmon production goal of 92 million. The hatcheries, they promised  would help ensure “143 million fish for harvest annually, of which 51 million are to be…25 million (hatchery) chum, 8 million (hatchery) sockeye, 1.5 million (hatchery) coho, and 300,000 (hatchery) Chinook salmon; the remainder will be made up of pink salmon.”

The state, however, quickly learned that the costs of producing hatchery sockeye, coho and Chinook salmon were prohibitive and not long after decided the whole hatchery program was too costly for the state to run given the minimal stream of revenue produced by a hatchery tax on the commercial harvest of salmon.

The original idea was that those fishermen, who were the primary and in many cases sole beneficiaries of the hatcheries, would be taxed to raise the money to pay to run the hatcheries. That idea proved wildly unrealistic, so the state abandoned the hatchery program, turned the hatcheries over to associations of commercial fishermen that had originally been formed to allow commercial fishermen to vote on whether they would agree to hatchery taxes, and then allowed those associations to engage in what came to be called “cost-recovery” fisheries to finance hatchery operations.

This was Alaska’s form of salmon farming, though Alaska commercial fishermen prefer to call it “ranching.” Whatever it is called, the associations running the hatcheries now annually plant their seeds in the ocean in the form about 1 billion young pink and chum salmon fry every year and then wait to harvest the crop as returning adults in the tens of millions.

The pink program, in particular, has been wildly successful in odd-numbered years when pink returns classically peak in Alaska. The state reported a pink salmon hatchery harvest of 64.2 million fish last year –  more than four times the pink catch envisioned when the state’s version of ocean farming began.

Production of Chinook, or what Alaskans usually call king salmon, was pegged at 77,407 fish or 26 percent of the promised goal of long ago. Chum salmon production of 20 million reached 80 percent of the original goal. Both sockeye and coho missed the goals widely, respectively producing only 20 percent and 65 percent of what was originally promised.

This is in line with what has become the historic norm. Alaska hatcheries have proven hugely successful at producing low-value salmon and pretty bad at producing high-value salmon, but the numbers for the hatcheries still work out well.

As the state hatchery report for 2013 notes, “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 (at) two years. This means pink salmon provide a quick return on investment and provide the highest economic return for the production costs.

“Chum salmon have the same rearing time in the hatchery but have a longer life cycle (three to four years); therefore, they have a longer return on investment. Pink and chum salmon are the bulk of Alaska hatchery production because they have the highest return on investment for the cost of production.”

These pink and chum salmon factories now support fisheries based on producing high volumes of low-value products. The chums, long referred to as “dog salmon” in Alaska but now usually sold as “keta,” are big enough to produce filets that can compete with wild sockeye in some markets by coming in at a lower price point.

Wrong product

A lot of the pinks, which average only about 3 pounds in weight, still go into cans – either for human or dog food – but some are sold as filets. The market for canned fish in the U.S. is relatively small, and the preferred product in the domestic market is hefty, red filet.

Unfortunately, pink filets are small and more pinkish than the red-meated sockeye and Atlantic-farmed salmon preferred by U.S. consumers.

The farmers can actually tailor the color of the fish by how much astaxanthin, a natural keto-carotenoid, that they feed. Wild fish obtain astaxanthin from algae, krill and other crustaceans they eat. The farmers add it to the diet of their fish to reflect where they plan to sell those fish.

“Generally, the Asian consumer markets and the “quality oriented” smoking industry prefer salmon with higher flesh redness than European consumer markets, ” according to a study of this subject. “As a consequence of different market preferences, appropriate flesh color is decisive for acceptance and price of salmon products.”)

No one has found a way to improve the color of smallish pink filets, but the Chinese – who were once processing a significant portion of these Alaska salmon – did figure out how to inject water into the filets to generate more revenue.

The industry tracking website Trade-X has described this as the “deceptive practice of using a high-pressure water injection machine to plump fillets to boost the net weight of the product ultimately boosting profits. When the product is thawed and cooked the flesh is Significantly compromised with a ‘power-washed’ effect.”

Power washing could help explain why 40 percent of Walmart customers give the company’s frozen “Great Value Frozen Wild Caught Pink Salmon” a one-star review with some complaining that the fish “is SUPER mushy… falls right apart after thawing and looks and feels like pink slime mush. Really quite disgusting.”

Such reviews don’t help the reputation of Alaska salmon in general even though the Walmart fish are sold as a “product of China.” Most consumers seem to have figured out the fish are from Alaska thanks in part to the U.S. Department of Agriculture.

It turned to the internet in 2016 to explain that “under the Country of Origin Labeling program regulations – enforced by USDA’s Agricultural Marketing Service – when fish are caught in U.S. waters and then processed in a foreign country that foreign country of processing must appear on the package as the country of origin.  This processing usually takes the form of filleting and packaging the fish into the cuts you see in the grocery store seafood department or frozen food aisle.  However, if the fish was actually caught in Alaskan waters, retailers are also able to promote the Alaskan waters the fish was actually caught in, in addition to the country in which the processing occurred.”

Walmart does not specifically identify its pink salmon filets as coming from the 49th statea.. It is possible the fish are of Russian origin given all the confusion in global seafood markets, but it doesn’t matter.  Thanks to the marketing efforts of the Alaska Seafood Marketing Insitute, the term “wild caught” has become a near synonym for Alaska salmon.

The bad reputation of some Alaska salmon is now among the many reasons the commercial salmon fishing industry is struggling but it’s hard to say how this ranks compared to all the other problems:

The supply chain issues inherent in the yo-yo-ing in the number of fish harvested in even-number years versus odd-numbered years, which appears to be exacerbated by the state’s hatchery production; the replacement, in the view of some scientists, of high-value sockeye, Chinook and coho salmon with low-value hatchery pink and chum salmon; the state’s antiquated harvest techniques; the processing plants still heavily dependent on manual labor while those in the salmon farming countries have largely automated; the ability of the salmon farmers to provide fresh salmon year-round; the parasite-free nature of farmed salmon that created a whole new market for salmon sushi in Japan, and the marketing power of farmers now engaged in businesses 10 times more profitable than the salmon business in Alaska.

Against this backdrop, it becomes obvious why chaos has reigned in the Alaska salmon processing business in the last few years, and why this was always expected to be something of an off year.

Worse than expected

Still, what happened came as something of surprise. The preseason forecast was for a harvest of 135.7 million salmon of all species, which would have made the catch the smallest since 2016, according to state records.

That was a bad year.

The U.S. Secretary of Commerce declared that year’s harvest of 111.2 million salmon a disaster and Congress subsequently appropriated $56.3 million to bail out commercial fishermen in Kodiak, Prince William Sound, Chignik, Cook Inlet,  Alaska Peninsula, Southeast Alaska and Yakutat fisheries. 

But this year proved even worse than 2016 when the actual harvest came in 25 percent short of the forecast. Pink salmon and the salmon seiners who catch them – big winners in 2023 – were this year the biggest losers.

“Pink salmon harvest performed poorly relative to the preseason harvest projection with about 58 percent of the projected harvest being realized,” the state reported. No explanation for the failure was offered.

The state was awash in pinks, or “humpies” as Alaska often call them in 2023 with the harvest of 152.4 million of those low-value fish accounting for 66 percent of the total statewide, all-species salmon harvest.

Despite the smallish return this year, pinks still accounted for 40 percent of the total harvest but a meager 9 percent of the value. Some expected the lower volume of pinks to boost prices for the fish, but the ex-vessel price per pound – the fee paid fishermen – dropped a penny from the 24 cents per pound of last year to 23 cents per pound this year.

This made the 3.1-pound, average-size humpy worth just over 71 cents or about one-seventh the value of the average sockeye caught in the state. Led by the harvest in the Bay, sockeye salmon this year accounted for 42 percent of the harvest, topping pinks for total volume.

Prices for sockeye were also up in all fisheries with preliminary prices in Prince William Sound hitting the aforementioned reaching an average of $1.91 per pound. Sound sockeye attract a premium because most are branded as “Copper River sockeye” and the brand carries a certain cachet.

Chef’s Roll, a website for the “global culinary community,” bills them as the “world’s finest salmon” and declares the “must store up more energy in the form of healthy Omega-3 oils than any other wild salmon to fuel their journey up the 300-mile river. This characteristic difference, possessed only by salmon of true Copper River origin, sets this fish apart in flavor and color and results in an eating experience that is unmatched by any other salmon – farmed or wild – available on the market today.”

This despite most of the science agreeing that king salmon have more Omega-3s. Oregon State University researchers calculated 1.5 milligrams of Omega-3s per 100 grams of edible Chinook. Sockeye came in at 1.3 milligrams. Farmed Atlantic salmon were at 1.9 milligrams. 

But for those really interested in Omega 3s, Lake Superior lake trout topped them all with 4.6 grams and Atlanatic mackerel were at 2.6 grams.

Spiny dogfish, a small shark Alaska’s Homer News has described as “deserving of contempt”, was reported to contain 2.2 milligrams per 100 grams of Omega 3s, making it better for you than any Alaska salmon. But nobody has found a way to sell this fish to American consumers.

These sharks are  commonly sold as “rock salmon” or spurdog in fish and chips shops in the United Kingdom, but nobody in the U.S. wants to eat them. Or, to put it another way, no one has yet found a way to convince Americans the fish might be both tasty and good for them.

Thus, when snagged as bycatch in Alaska commercial fisheries, the sharks are usually treated as trash and discarded. This is the definition of worthless in a capitalist system.

At the end of the day, products are only worth what markets want to pay for them, and when it comes to salmon, Alaska is producing a lot of salmon – most notably those massive numbers of pinks – for which the market doesn’t want to pay much while it’s high value salmon – aside from sockeye in the Bay – have generally shrunk in volume.

Add in problems in the state’s crab and halibut fisheries and the picture only gets worse with the Natoinal Oceanic and Atmosheric Administratoin (NOAA) this fall reporting”that the Alaska seafood industry suffered a $1.8 billion loss” between 2022 and 2023, and “saw a 50 percent decline in profitability” between 2021 and 2023.

It’s hard to imagine things could get any worse. But never say never.