The Alaska seafood industry remains an economic juggernaut, but it is under strain from forces outside of the state’s control, according to a report commissioned by the state’s seafood marketing agency.
The report from the McKinley Research Group, titled The Economic Value of Alaska’s Seafood Industry, is the latest in a periodic series commissioned by the Alaska Seafood Marketing Institute.
The total economic value of the Alaska seafood industry in 2021 and 2022 was $6 billion, slightly more than the $5.6 billion tallied in 2019, the last full year prior to the COVID-19 pandemic, according to the report and the previous version published in 2022.
Along with that good news, the McKinley Research Group’s report contains a warning about the industry’s economic future.
A price collapse in 2023 bodes ill for the industry, the report said.
For sockeye salmon, prices paid to fishers delivering their catches in 2023 were, on average, less than half of what they were paid in 2022, the report said. That price averaged 65 cents last year. It was the lowest nominal price (not adjusted for inflation) since 2004 “and among the lowest prices on record when adjusted for inflation,” the report said.
The reasons for the price collapses were multiple, the report said.
Because of inflation, consumer demand dropped, notably in the United States, where it fell below pre-pandemic levels. A strong dollar and weak yen made Alaska seafood prices less competitive in Japan, a key market, the report said.
In addition, there was a large amount of 2022 harvested fish leftover as inventory, making wholesalers and retailers less inclined to buy fish in 2023, the report said.
And the global supply of key species like pink salmon and pollock increased dramatically, notably from Russia but also in Alaska, the report said.
While Alaska’s wild salmon and crab are considered premium products, fish from Alaska accounted for only 9% of the world salmon market and 9% of the world crab market, the report said. Competition from farmed salmon and wild Russian salmon dominates that market, according to the report. Much of the world market for crab is claimed by king crab from Russia — the world’s top king crab producer — and snow crab from Canada.
For Alaska seafood in total, the U.S. domestic market was the top consumer destination, accounting for about $2 billion worth of product annually, the report said. The second-biggest market as of 2021 and 2022 was Japan, which took in $650 million worth of Alaska seafood annually, the report said.
Salmon accounted for 40% of the value of commercially harvested seafood, while pollock was the top-quantity fish, accounting for 59% of the harvested volume in 2021 and 2022, the report said.
The seafood industry, between harvesters, processors and managers, accounted for 48,000 jobs on average in 2021 and 2022, the report said. That is a reduction from the 62,200 total jobs in 2019.
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