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Economists unsure of how long huge salmon influxes will affect prices

Before the salmon season, harbors like this one in Dillingham were filled with boats and crews anticipating another large season. (Brian Venua/KMXT)
Before the salmon season, harbors like this one in Dillingham were filled with boats and crews anticipating another large season. (Brian Venua/KMXT)

Kodiak fisherman Mike Friccero has fished for salmon for over four decades. He said he was expecting a low price for Bristol Bay salmon this summer, but didn’t think rumors were true about how low it would drop.

“Our processor gave us a letter, a narrative before the season started, saying that pricing conditions weren’t great but that they were going to go after it with all the resources that they utilized last year as far as tendering and logistics and resources in general,” he said. “And they asked if we would do the same.”

It’s been a tough year for commercial salmon fishers. Three years of huge returns in Bristol Bay created a surplus of sockeye in the market. Towards the end of the season, processors announced a base price of just 50 cents per pound – the lowest price in decades, when adjusted for inflation.

Fishers can get bonuses for better quality, but Friccero said even with the boost, he was better off gearing up to fish for other species like halibut.

“If you’re catching 5,000 pounds and you’re thinking 80 cents, then your crew’s share might be $400,” he said. “Well that’s worth doing for folks, but once it drops into the lower figures, if you have crew that have talent, they’ve got other things they want to get over to.”

Friccero said he usually leaves shortly after the peak anyway, but he wasn’t the only one packing up before August.

The Bristol Bay base price for sockeye was one of the lowest prices for Alaskan salmon in recent history. Since then, Trident has dropped their price for chum down to just 20 cents per pound in response to massive harvests in Russia and announced they will stop buying salmon from most communities in Alaska starting September 1.

Fishermen across the state are wondering how long the low salmon prices will last. Some are even considering selling their boats.

Gunnar Knapp is an economist who specializes in the state’s fisheries. He said for the sake of both fishermen and processors, he hopes that this is just a one-year blip instead of the beginning of a long term pattern.

“To get the lowest price you’ve ever gotten while you’re working just as hard as you ever did, and other expenses like fuel have gone up – it puts fishermen in a really tough position,” Knapp said. “I think processors would also say that they’re in a really tough position and their companies are on the line.”

Knapp was visiting family in Maryland when he saw in retail stores that wild caught seafood is now selling for the same price as farmed fish. He said he’s not surprised but still disappointed knowing the amount of work processors and fishermen do to produce high quality products.

“I was in a local Costco yesterday, and I saw in that Costco, farmed Atlantic filets from Chile and farmed Atalntic filets from Norway and wild Alaska sockeye all selling for $10.99 a pound,” he said.

The Alaska Seafood Marketing Institute is funded by the State Legislature to stir demand for Alaskan products. Greg Smith, ASMI’s communications director, said there just isn’t enough demand to keep up with the glut of fish.

“There’s difficult issues in the global marketplace – inflation, increased cost of living, shipping costs, the Russian invasion of Ukraine, so there are just significant challenges,” he said.

Fishers started the season with some processors still holding frozen product from last year’s harvest.

ASMI received an extra $5 million in funding this year to better compete in global markets. But even with extra funding, staff are unsure if their short-term efforts like retail displays and working with food writers will help much. Smith said one of ASMI’s bigger projects is investing in new markets across the globe.

“We’re focusing on emerging markets, Latin America, parts of Africa, we’re doing some things in Israel but it is just really trying to build off the strength of the brand,” Smith said.

Smith said ASMI has had some success with retail and restaurants, and even worked with the U.S. Department of Agriculture to include salmon in purchases for school lunches and food banks. Alaska’s senators also brought the ranking member of the Senate Agriculture committee to Kodiak to make the case that fishers should be included in the upcoming farm bill.

Friccero said with lower salmon prices, he’s able to keep a decent paycheck but will have to be wary of his budget for next year. He said he hopes market conditions improve over the winter.

The low prices this year has pushed several fishers to call for better transparency from processors. Friccero said a guaranteed minimum price would be the best possible starting point to build more trust.

“Looking for transparency, anything would improve it right – because there’s almost none,” he said. “That doesn’t necessarily mean that we’re being mistreated in any way, it’s just very hard to have a conversation with no information.”

Regardless, Friccero said he’ll be back to fish more next year.