Naknek, Alaska
Home to the Bristol Bay salmon fleet
From KDLG/Dillingham
July 22, 2020
Four leading processors have posted base-prices of 70 cents per pound for Bristol Bay sockeye, 52% of last year’s base price of $1.35. Trident fishermen also confirmed bonuses of 15 cents/lb for refrigerated seawater, 5 cents/lb for bleeding, and 5 cents/lb for chilling, according to a news report from KDLG late yesterday. Another half dozen major processors in the area are silent so far on base prices.
If other buyers follow suit, this will be the lowest price since 2015, when fishermen received $.50/lb.
The question of how much it would cost both processors and fishermen to go fishing in the age of coronavirus was on the minds of everyone involved in the world’s largest wild salmon fishery since the beginning of the pandemic months ago.
The lure of a forecasted 34.56 million sockeyes went up against the risk of a community wide COVID-19 epidemic in the mental calculations being made back in February and March. The forecast was above the ten-year average of 31.67 million, and could very well be the only place in Alaska with a normal to better salmon run. But Bristol Bay is an area with little health care infrastructure and the idea of a pandemic was sobering.
Despite voices to close the fishery, both the fleet and processors commited to protective plans that have so far prevented massive contagion in Bristol Bay. Without looking at actual expenditure receipts, it seems clear the processors’ outlay of cash to keep infection low and behind a firewall to protect communities, was on an order of magnitude higher than the fleet’s.
Many of the Bay’s leading processors chartered jets to bring workers north from locations as far away as Europe and Central America. They hired health advisors long before the season began to help put in place best practices for protecting travelers and workers. Quarantine expenses, paying for chartered travel to Anchorage and 14 days of room and board at an Alaska hotel, not to mention health care monitors during quarantine, must have been a large budget item. Those and other costs related to prosecuting the Bristol Bay season play a role in the lower base price this year.
The other factor is how the fish will be received in a market that has contracted to a fraction of its size from last year, and shifted from foodservice to retail, another step down in price.
Andy Wink, executive director of the Bristol Bay Regional Seafood Development Association (BBRSDA), released a market update two days ago with data that predicts tighter supplies worldwide, which may support prices, but a strong dollar, low farmed salmon prices, and COVID-based uncertainty, are all also on the radar.
“More than ever, sockeye pricing will be a function of how much buyers differentiate sockeye salmon from farmed salmon,” Wink wrote in the July 21 report. “If a large percentage of buyers are committed to buying premium wild salmon, they’ll have to pay up for it… or they may choose to save money by buying farmed Atlantic salmon, of which there will probably be ample supply due to decreased restaurant sales and demand shifts in China. If a large percentage of consumers choose the latter, wholesale sockeye pricing may be weaker. Demand for healthy food, such as wild sockeye salmon could play a big factor, too.”
Wink lists specific supply/demand factors:
– Bristol Bay’s ascendance as a source. For the first time, Bristol Bay accounts for more than 90% of Alaska’s sockeye landings, already the world leader in wild sockeyes. Russian sockeye harvests appear well behind last year and Canadian sockeye harvests will be a non-factor this year. Global sockeye harvest could well be less than 300 million pounds, a reduction of 24% over last year.
U.S. sockeye market is far more robust now compared to 2013, the last time global sockeye supply was really tight.
– Even though global salmon demand is expected to decline by 15 percent, farmed salmon production by 2%, and loss of restaurant traffic will push more farmed supply into retail where it will compete with sockeye, Bristol Bay sockeye are unique compared to farmed salmon and other species. The characteristics of a well managed, abundant, wild and pristine fishery, especially in times of uncertainty, may play play a factor in demand in the coming year.
– Canned salmon is also making a comeback due to COVID-19 sequestering people in their homes. Multiple reports cite increased sales for canned salmon as well as frozen seafood products, which is not surprising given that consumers are looking to stock up on items with longer shelf lives.
– Macroeconomic factors loom large this year. The short-term future of commerce is very uncertain, due to the COVID-19 pandemic. One thing is certain; however, there is more risk for nearly every business and household right now and that is factoring into decisions. As a result, it would not be surprising to see some buyers take a cautious approach.
– While export prices for frozen H&G sockeye are down from recent years, the average price of fresh sockeye fillets promoted at U.S. retail outlets is up 4% over last July. Retail sales of fresh and frozen seafood (including salmon) have soared since March 2020.
“Although difficult to quantify, we understand sockeye is much more likely to be sold at grocery/retail stores as opposed restaurants or cafeterias,” said Wick. “Seafood sales at retail have been booming since March, with frozen salmon sales revenue up 42 percent. Even after the panic buying in March, both fresh and frozen seafood (more so) have witnessed strong year-on-year sales growth.”
BBRSDA supports fresh Bristol Bay sockeye promotions at over 500 stores this year.
