Analysts predict strong markets for Southeast salmon
Fishermen are excited as the fishing season kicks into higher gear this month, especially with analysts predicting high prices and an above-average pink salmon run, reports www.megafishnet.com with reference to National Public Radio.
The mood at South Harbor is frantic as fishermen put the finishing touches on their boats before heading out for the season. Tuning out the noise of a soldering iron in the background, Stuart Meeks talks excitedly about the summer.
" Predictions are good, supposed to be a really good run of fish and the price for all the fish are really good. Never seen prices like it before. When I used to fish, back when I was 15, 16, dogs were 33 cents a pound and this year they're predicting a dollar a pound for dogs. So it's quite a big difference, should make some pretty good money this summer. I've got high hopes."
Meeks says the seine boat he crews, The Harvester, is hoping to catch at least a million pounds of salmon this summer, mostly chums and pinks. Meeks hopes that will translate into a sizeable crew share.
"In the past you know, most fisherman average $20-30,000 a crew share, but this year it might be quite a bit more, $50-60,000. We're hoping."
The Alaska Department of Fish & Game has predicted an above-average Southeast harvest of 55 million pink salmon this year. They're also predicting above-average harvests for sockeye, chum, and coho throughout the state, but slightly below-average for chinook.
Tyson Fick, communications director at the Alaska Seafood Marketing Institute or ASMI, says that despite high prices, a number of factors could reduce the profit margin.
"There's supposed to be a lot of fish this year. That will have downward pressure on the price. And the commodity price is likely to go down as Chile gets back online and Norway keeps producing more. And the price of oil - what it costs to get fish and process them. All are factors." On the docks the rising cost of fuel means more business for Jim Edson, who skippers the Kupreanof, an Icicle Seafoods tender.
" Fuel prices are getting to where it's high enough that it'll change people's behaviors. Instead of running to town, they get a little extra money if they deliver in town, but everybody's got it calculated out to how many pounds they need to make it worthwhile to run into town."
Seiner Stuart Meeks says delivering to the docks could bring his boat an additional 3 cents per pound, which translates to nearly $30,000 on a million pounds of fish. Even that might not be enough incentive.
"We were pretty worried about diesel going up to five bucks or whatever. And if it does that, we probably won't be coming home as much and will be hanging out on the grounds more."
While fuel expenses will likely make a dent in a fisherman's profits, strong demand and a weak U.S. dollar are driving salmon prices up. Gunnar Knapp, an economist with the Institute of Social and Economic Research at the University of Alaska Anchorage, says demand for Alaskan salmon has increased steadily in recent years, both domestically and internationally, and may be even higher this year. Alaska's largest seafood buyer is Japan, where a March earthquake and tsunami affected cold storage facilities, processors, and fishermen. Knapp says Japan may turn to Alaska for supply.
"The situation with the Japanese tsunami, which ended up on the salmon side probably not being a negative factor, as a lot of people, including myself, had originally predicted, but may be a positive factor in the sense that it is probably going to hurt the Japanese chum salmon production. So they'll be looking for other places to buy chum salmon from and chum salmon roe. And it also apparently destroyed a fair amount of frozen salmon inventory that they need to buy again. So they needed to buy again salmon that had already been bought. And that helped demand. So, you've got the maybe counterintuitive effect of this terrible tragedy in Japan actually probably helping Japanese demand to buy wild Alaska salmon here in the short term."
McDowell Group seafood analyst Andy Wink is less confident. He says the emotional nature of the disaster might inspire nationalism among Japanese consumers, resulting in weaker demand for Alaska products.
On the other hand, a strong yen is likely good for Alaskan fishermen, says ASMI's Fick.
"When the yen is strong in comparison to the dollar, Alaskan, American, exports look better. When the dollar is weak, you think, oh that's bad for the economy, but it actually really helps the export sector, of which a whole bunch of Alaska seafood is exports. Something in neighborhood of 25% of which goes to Japan."
Fisherman's confidence in the strength of the salmon market is being reflected in permit pricing. So far this year, Southeast gillnet-permits are up almost 30% over last year and seine permits more than 40%.
As skipper Mark Roberts says, fishermen are feeling positive about the upcoming season.
"The way the rumors are going around, we'll see if they come true or not. The way everybody's talking, if you don't break down this year, I think you're gonna have a good season."
Processors are optimistic too. Icicle Seafoods, the largest processor in Petersburg, modified its plant this winter to increase the volume of fish it can freeze. Another of Petersburg's large processors, Ocean Beauty, is reopening its cannery this year. The plant was shuttered last summer because of a weak run. Processor representatives did not return calls for comment on the season outlook.