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Alaska Fish Factor: Fishing Permit Values Plummet

14 March 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 - Fire sale salmon prices last year and a dim outlook for the upcoming season have caused the value of Alaska fishing permits to plummet.

To another extreme – the prices for halibut catch shares have soared to “unheard of levels.”

Starting with salmon permits: “A lot of people had disastrous seasons last year, whether it was drift gillnet or seine permits, and the values have declined dramatically,” said Doug Bowen of Alaska Boats and Permits in Homer.

At Alaska’s bellwether fishery at Bristol Bay, a base sockeye prices of 50 cents a pound helped push drift gillnet permit prices into the $98,000 range, down from $175,000 last spring.

“That may be the bottom; they seem to have come up a bit,” Bowen said, “but it’s still way below what they were trading for at this time last year.”

The lower prices have spawned little interest in Bay drift permits; likewise, for salmon seine cards across the state.

Seine permits at Prince William Sound are priced in the $150,000 range, down from over $200,000 a year ago. Kodiak seine permits have sunk into the mid $30s, and a Cook Inlet drift permit is valued in the $60,000 range.

Bowen doesn’t expect the tide to turn anytime soon.

“I'm afraid a lot of the same factors that contributed to the low prices we saw last year are pretty much the same this year. It’s not an optimistic outlook for salmon, and that is depressing the market for permits, and also the boats,” he added. “There are lots on the market, lots of sellers, not that many buyers.”

“There’s not a lot of extra money floating around in the salmon industry. So folks wanting to upgrade their vessels or pick up permits in another area, we’re just not seeing that happening.”

The situation is slightly better in Southeast Alaska, where driftnet permits are getting a plug of interest.

“More than I thought compared to all the other salmon areas,” said Olivia Olsen of Alaskan Quota and Permits at Petersburg.

“We started at $78,000 in November and drifts now are going for $85,000 and they may creep up from there. Same with power troll permits. They’ve been pretty steady sales at about $35,000 which is down about $6,000 from last year, but still a pretty good price when you listen to all the talk about bad salmon prices. Hand troll permits also are on the upswing to $12,000,” Olsen said.

Both brokers said salmon permit prices tend to tick upwards the closer it gets to salmon season.

“I think the main issue is what we are going to see for prices, Bowen and Olsen said.

Halibut share shocker – This year’s small increase in halibut catches combined with hopes of a repeat of $6-$7 per pound prices was enough to send quota share prices skyrocketing.

“There was a big rush after the halibut numbers were announced in late January,” said Olivia Olsen at Alaskan Quota and Permits in Petersburg.

For the first time in nearly two decades, the coast-wide halibut catch was increased by 2.3 percent to nearly 30 million pounds. Alaska’s share of 21.45 million pounds is up 200,000 pounds from 2015.
“I would say quota prices shot up $10 a pound since December,” Olsen said of Southeast shares.

“We have current sales pending at $63 and $65 per pound, with rumors of going higher. Those prices are just unheard of, and to jump up that high in that short period of time - oh, my golly!”

Are people buying at those nosebleed prices?

“There’s a lot of people drawing the line, but there are a few who have bought. They’ve been waiting a long time for it and are just going to bite the bullet,” Olsen said.

The same holds true for quota prices in the Central Gulf, Alaska’s largest halibut fishing hole.

“Those are bumping up to $60,” said Doug Bowen of Alaska Boats and Permits in Homer. “We’ve had offers of $59 but no takers. Quota shares for the Western Gulf have increased by around $5 and are in the $40s if you can find it. There is strong interest there and also in Bering Sea regions. But it’s the same scenario – more buyers than sellers and the market is really tight.”

Olsen added: “It will be interesting to see if these prices will last.”

Got ice? A grass roots push is underway in Kodiak for a self-pay ice house and crane at Oscars Dock at its downtown harbor.

“It’s common in fishing communities throughout Alaska and the nation,” said Theresa Peterson, a fisherman and outreach director for the Alaska Marine Conservation Council. “It’s kind of strange that Kodiak doesn’t have this facility, being that we are the number 2 port in the nation, and home to the largest and most diversified fleet in Alaska.”

The need and benefits go far beyond commercial fishing, Peterson stressed. It would serve Kodiak’s five outlying villages, whose residents travel by boat to town and load/offload provisions, sport charter operators, recreational anglers and hunters.

Fisherman Darius Kasprzak, who calls Kodiak’s lack of a public ice house “flabbergasting,” is worried that a lack of it will drive the island’s fleet of small salmon boats out of business.

“More processors are requiring RSW (refrigerated sea water) systems and are phasing out all the ice boats. Only a few processors are still accepting fish iced in holds, and most of those are grandfathered in,” Kasprzak said. “So all these little boats that don’t have room for RSW or don’t have the money are walking on pins and needles. But if there’s public ice that will change things dramatically.”

Boat owners with RSW also would like to be able to grab ice so they could shut down the systems at night “and not have to listen to it,” he added.

“It’s worth it to buy some ice and chill off the top of the fish and not have to buy fuel and put wear and tear on the RSW,” he explained.

Kasprzak said there is another reason ice is even more important for a water faring community.
“Our waters are warming. Right now temperatures are at 7 degrees over normal. Last summer the water at Prince William Sound reached 60 degrees. Our RSW systems aren’t built to handle those temperatures. The Kodiak processors didn’t have enough ice for boats last salmon season because it was so hot. There’s more of a need now for a community ice house than ever.”
The Kodiak City Council will hear the issue on March 15th.

Weigh in on water – The Alaska Dept. of Natural Resources is considering revising its water management practices and wants input from the public. It includes regulations on water rights in streams, lakes, wells and other bodies.

A DNR announcement said: “The department is soliciting feedback and comments from the public on how they would change or improve the existing regulatory framework related to water management or for suggestions and proposals which would improve the regulations related to water management before the formal process of drafting any proposed changes begins.”

Comments are accepted through March 18. Send via email to dnr.water.regulation@alaska.gov.

 

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