Seafood industry expects another year of weak markets

I’ve never seen market conditions as bad as they are now,” Doug Vincent-Lang, commissioner of the Alaska Department of Fish and Game, told a conference of Southeast business, community and municipal government leaders last week.

“Last year we said we reached rock bottom,” Jeremy Woodrow, executive director of the Alaska Seafood Marketing Institute, said of low prices, weak markets and reluctant consumers.

But then he added, “we’ve scraped off more levels,” reaching deeper to the bottom.

All of the participants in the fisheries panel discussion at the Southeast Conference Feb. 6 in Juneau talked about the problem facing commercial fishers, processors and communities that depend on fish taxes and jobs.

“It’s going to be another bad year,” said Julie Decker, president of the Pacific Seafood Processors Association. Though she added there is one good thing to come from the mess: It’s brought everyone together to find solutions.

“We’ve weathered storms before,” said Tracey Welch, executive director of United Fishermen of Alaska. But this past year was the worst, she said, hitting most all commercial seafood species.

“We saw a lot of processors quit buying early,” alongside falling prices, Welch said of last year’s harvest.

Prices were painfully low last year, as the market was still oversupplied with fish caught in 2022.

A Department of Fish and Game preliminary analysis issued in October of salmon prices showed a statewide average in 2023 of 64 cents a pound for sockeye, 49 cents a pound for chum and 24 cents for pinks, though prices were significantly lower later in the season, dropping to around 20 cents a pound for Southeast chum salmon.

Average prices paid for commercial salmon catches in 2023 were less than half the 2022 numbers.

It’s going to take a lot of marketing to find more buyers for what’s already in warehouses and cold storage, plus what will come this year and in future years, all geared toward pushing prices higher, Welch said.

That’s where ASMI, the state’s seafood marketing agency, takes the lead.

“People are buying less seafood,” Woodrow said. Rising food costs, tight household budgets and overall inflation have made it harder for processors to sell to wholesalers and retailers.

“We have fish to sell. We have a massive supply and demand problem,” he said.

About 30% of the value of Alaska’s seafood harvest is sold in the United States and the rest is exported, with Japan and Europe the largest direct foreign markets, according to ASMI.

China was the biggest market until 2017, when a trade war between China and the U.S. led to higher tariffs and knocked down Alaska seafood sales to the Asia nation. Alaska’s annual exports to China dropped by $450 million from 2017 to 2020.

China fell from almost 30% of Alaska’s seafood exports by value in 2017 to 20% in 2022.

“There isn’t a single replacement for China,” Woodrow said.

ASMI is working parallel efforts, he explained. It is trying to boost sales to U.S. consumers, while also developing new overseas markets, looking to countries in Southeast Asia, South America, North Africa, India and the Middle East.

“Unfortunately, Americans just don’t eat enough seafood,” he said.

ASMI markets Alaska seafood as wild-caught, not farm-raised, sustainable and healthy, all of which consumers say they value.

Marketing, however, takes money, and Alaska is outspent. The Norwegian Seafood Council global marketing budget is $46 million, according to ASMI. Whereas federal funding to ASMI this year totals about $6 million, Woodrow said.

The Alaska seafood industry, through a self-assessment, contributed about $11 million to ASMI this year, he said, with the state adding $5 million for the agency’s total spending plan of $22 million.

“We have a lot of work ahead,” Woodrow said in an interview after the conference panel. “There is a lot of uncertainty.”

Besides for losing consumers to inflation and China to tariff politics, the Alaska seafood industry also suffered under years of unfair competition from Russia, the panelists said.

Russia blocked the import of Alaska seafood starting in 2014, immediately hitting pink salmon, Decker said. Roe is a big part of the value of pinks, she explained, and Russia was a prime market for the eggs.

Meanwhile, much of Russia’s prolific seafood harvest went to China for low-cost processing, entering the global market and undercutting Alaska on price.

The Biden administration in December changed the rules to put an end to Russian fish coming into the U.S. through China, with the change scheduled to take effect later this month, Decker said.

“This will open an opportunity for Alaska seafood to fill a demand,” she said, though she worries that all that Russian seafood may just go to other markets around the world, adding to supply and holding down prices.

 

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