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Alaska Fish Factor: Continuing Headwinds for Alaska Salmon

22 February 2016
 Alaska Fish Factor: Laine Welch Laine Welch has been covering news of Alaska’s seafood industry for print and broadcast since 1988. She also has worked ‘behind the counter’ in wholesale and retail seafood businesses in Alaska and Cape Cod, MA. Laine lives in Kodiak, Alaska. www.alaskafishradio.com

msfish@alaskan.com
 
 

US - Early signs point to continuing headwinds in world markets for Alaska salmon.

Global currencies remain in disarray, the ongoing Russian seafood embargo is diverting more farmed salmon to the U.S., and tons of product remains in freezers from back to back bumper sockeye runs. (The majority of Alaska’s salmon goes to market in frozen, headed and gutted (H&G) form.)

One plus: aggressive market promotions have kept reds moving briskly at retail outlets at home and abroad and removed some of the back log.

“What the Alaska industry really needs is to move that product through the supply chain – clear the decks - so we are not continuing to deal with that overhang in the following year. Whether we are there yet or not, is hard to say,” said Andy Wink, a Fisheries Economist with the Juneau-based McDowell Group.

“When the supply increases as much as it has over the last few years, especially from Bristol Bay, it has a big impact on what the distributors, secondary wholesalers and retailers are willing to pay to processors who are buying from the fishermen,” he said.

And in the case of salmon, size does matter. In the past two years at Bristol Bay, most of the fish have been on the smaller, two to four pound size, meaning they are worth dramatically less than larger fish. Luckily, sales of smaller sockeyes to Japan have moved well, primarily because of the lower prices, and their use of cut up fish in various dishes makes it less of an issue.

“We have seen good sales volume through the supply chain in the past year,” Wink said, adding that Alaska sellers were surprised at the amounts that went to Japan and Europe, due to the global currency situation. The continued strong value of the dollar means it is more expensive for overseas customers to buy U.S. seafood.

“We’ve seen things move a lot faster, and while the currency situation is still terrible, at least it’s been terrible now for a while,” he added. “People are more adjusted and markets have a better grip on where it’s at. Hopefully, they can figure out what everyone needs to operate at these currency levels.”
Alaska salmon also will face even more competition from farmed fish. Russia’s ongoing seafood embargo against several countries has displaced record amounts of Norwegian salmon and imports to the US have doubled.

“It’s been a big shift and the whole supply chain is adjusting to that. But there is reason to think that we are getting to a more stable environment where there is not so much uncertainty,” Wink said.

Alaska processors will get a good sense of demand when they meet with their customers next month at Seafood Expo North America in Boston and Seafood Expo Global in Brussels in April.

“They’ll get a very good sense of how hungry those customers are for product. If they haven’t done very well moving these large sockeye volumes, they won’t be as aggressive. If they have been having good luck with their sales promotions they’ll likely come back eager for more,” Wink said.

All combined, early signs don’t point to any big price boosts this year for Alaska salmon.

“There’s still a lot of headwinds, a lot of unknowns. It’s just kind of hard to see how the price takes any significant jump,” Wink said.

“We’ve got a lower forecast so we’ll see how the market responds to that. But so much depends on how much product has moved through the system, and how well inventories have been absorbed.”

Marine debris redux – Money from the Government of Japan is continuing to fund marine debris removal from Alaska coastlines.

An influx of debris, especially polystyrene foam, continues to wash ashore from the tsunami that devastated parts of Japan in 2011. The Alaska Department of Environmental Conservation (DEC) recently received $950,000 from Japan for tsunami marine debris collection, removal, and disposal projects for the 2016 field season. Specifically, this funding is intended to support a single large-scale project covering Kayak and Montague Islands, which have some of the highest debris densities
Since 2012, Alaska has received the majority of a $5 million dollar gift from the Government of Japan to the United States for aerial surveys and coastal cleanups in the Gulf of Alaska, Southeast Alaska, and the Kodiak Island area.

Last July, a large scale, three week project used 1,176 helicopter airlifts to sling 3,397 “super sacks” and 717 bundles of marine debris on to a 300 foot barge from 11 locations. The debris was transported to the Lower 48 for disposal and recycling.

To date, over one million pounds of marine debris have been collected and removed from Alaska using the funds provided by the Japan and administered through DEC.

The agency plans this month to issue a Request for Proposal (RFP) for the 2016 field work. Qualified contractors should monitor the Alaska Online Public Notice website for updates. Find more information on marine debris cleanup efforts in Alaska at dec.alaska.gov/eh/marine-debris/

Climate comments - NOAA Fisheries has just released a draft climate science action plan for the southeastern Bering Sea that will assess the vulnerability of 18 commercially important fish species.

The plan identifies key information needs and actions that the agency will take over the next 3-5 years to implement the NOAA Fisheries Climate Science Strategy, released in August of 2015.

“Climate-related changes in ocean ecosystems are affecting the nation's marine species and the people, businesses and communities that depend on them,” said Doug DeMaster, director of NOAA’s Alaska Fisheries Science Center (AFSC).

The Center is responsible for five large marine ecosystems - the southeastern Bering Sea, the Gulf of Alaska, the Aleutian Islands, the northern Bering and Chukchi seas and the Beaufort Sea. The plan will look first at the southeastern Bering Sea because it supports large marine mammal and bird populations and some of the most profitable and sustainable commercial fisheries in the nation.

The plan builds on work the Center has been doing for more than 20 years as part of a Bering Sea Fisheries Ecosystem Plan, said AFSC program leader Mike Sigler.

The center has completed a number of studies on the potential effects of climate change on three fish species - pollock, red king crab and northern rock sole.

“We expect climate change to lead to smaller populations of walleye pollock and red king crab, but have little effect on northern rock sole,” Sigler said.

NOAA is asking the public to provide feedback on the draft plan, to be finalized this fall.
(www.st.nmfs.noaa.gov/ecosystems/climate/national-climate-strategy)

 

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