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Top Species: Farmed salmon

Chile battles back with plans for growth

By Joanne Friedrick
September 05, 2011

Americans love their salmon — placing it behind just shrimp and canned tuna on the most popular seafood list — and import the farmed variety from various countries around the world.

In 2010 the United States imported more than 166 million pounds of whole farmed fish and fillets from Canada, about 47 million pounds of fillets from Chile, almost 20 million pounds from the Faroe Islands, nearly 50 million pounds of fillets from Norway and about 30 million pounds of farmed whole and filleted salmon from the United Kingdom.

The big farmed salmon news in recent years has been the supply from Chile: Imports from the country have been down, after averaging around 175 million pounds imported from the United States between 2005 to 2008. But now, having put the dire effects of the infectious salmon anemia (ISA) outbreak behind it, Chilean farmed salmon producers are looking to regain a dominant position in the industry.

“When ISA hit Chile, we cleaned out our pens and took a wait-and-see attitude,” says Bert Bachmann, VP and general manager for Camanchaca in Miami. “No smolt went into the water until last September.”

Now, he says, “we have a strong growth plan” and despite only modest fourth-quarter expectations, the company’s production should be in the 30,000- to 40,000-metric-ton range by 2012 and 2013. Bachmann isn’t too concerned that previous customers may have moved on. “We were in the market for a long time and had developed relationships,” he explains. Plus, Camanchaca supplies many of those same customers with other seafood, such as mussels, “so we have retained the relationship.”

Farmed salmon has always had a niche, says Bachmann, even in the Northwest where wild salmon is plentiful. “The issue for most consumers is, if it looks good, and the retailer supports it, then most people will accept it,” he says.

While optimistic about the future for Chile, Bachmann says the reality is that ISA is never fully eradicated. “What industries do is manage it through more intense fisheries management and husbandry. It requires ongoing improvements.”

Some of the improvements put in place in Chile, he says, are the creation of zones or neighborhoods along with protocols on stocking density and location of sites within those neighborhoods. There is improved biosecurity as well, says Bachmann, to prevent contamination, which could occur through the re-use of unclean nets, for example. There is also improved self-monitoring and more government-led monitoring, he says. “If there is the discovery [of ISA] the government will implement action right away,” he explains.

Although there was a period in which Multiexport Foods USA in Miami wasn’t producing salmon in Chile, General Manager Jason Paine says the company has been harvesting since 2009. “We took a calculated risk and continued to enter smolts in the water while others preferred to wait,” he says. In 2009, Multiexport produced around 12,000 metric tons of salmon compared with 46,000 metric tons the previous year.

In 2010 the harvest rose to about 15,000 metric tons and this year’s predicted harvest is about 24,000 metric tons. In 2012, it will be approximately 30,000 metric tons, he says.

“Our goal isn’t about rapid growth,” says Paine, “but good, sustainable growth.”
Sustainability is important throughout the salmon farming industry, and Multiexport has earned sustainable aquaculture certification from GlobalGAP, a private sector organization that sets voluntary standards for aquaculture production processes. Becoming certified is “an essential part of doing business and the right thing to do,” says Paine.

As the salmon supply has grown, the prices have headed downward, says Paine. He says the “market insanity” wasn’t expected to last, but going from $6 a pound for a trimmed fillet to just $4 wasn’t in the cards, either. “But now it’s starting to come back,” he says as demand rose for the summer and into early fall.

“We are seeing a bit of recovery, but we won’t see the $6 level either,” he explains.
Norwegian farmed salmon did step into the breach during the Chilean crisis, he points out, “but now we’re seeing Chile gaining more ground and seeing a transition back to pre-cut fillets.”

Paine says despite the ISA outbreak in the past, Chilean salmon always had a good reputation in the market and its industry was an innovator with the introduction of fillets into the market. In addition, Salmon of the Americas (SOTA) is starting up a new marketing campaign, says Paine, to promote Chilean salmon now that it is back in the marketplace. Multiexport is one of several dozen companies within Chile that participate in SOTA, a trade organization representing salmon farmers in North and South America.

Canada takes a bite of U.S. market

Among Canadian producers, True North harvested about 58,000 metric tons in 2010 from its sites in eastern Canada and Maine, which was up slightly over previous years.
The plan, says Andrew Lively, marketing and communications manager for the Blacks Harbour, New Brunswick-based business, is to increase production by 10 percent in 2012. True North is a subsidiary of Cooke Aquaculture.

Demand has increased recently, says Lively, who attributes that partly to recommendations from the U.S. Department of Agriculture to eat more fish, especially species high in omega-3 fatty acids. “I expect demand to go up faster than production,” he says.

With a trend toward healthier eating, Lively says there has been a growing focus on portion control, which has heightened interest in fillets and skinless portions. “We see more retail customers and foodservice customers wanting to know the cost based on the exact weight. We can take fresh salmon and cut it to the exact portion size for them. We have the equipment set, so it’s more consistent.”

Noting that consumers have a choice of farmed salmon sources, Lively says what sets Canadian product apart is the freshness.

“Maine and North Atlantic Canada are so much closer to our markets. There are no frequent flier miles required,” he says. “What that means is that the consumer gets a fresher product and the retailer has less shrink.”

True North sells its salmon primarily in the Northeast United States and eastern Canada. “We go as far down as the Carolinas and west to Chicago,” he explains, as well as selling into midwestern Canada. The majority of the sales are to retailers, he says, including Loblaw in Canada and Costco and Giant Eagle in the United States.

In promoting Canadian and Maine farmed fish, Lively says True North stresses the connection to the surrounding environment. “We are very concerned about making advancements [in sustainability].”

True North has received Seafood Trust sustainability certification, which means a third-party auditor has signed off on the fishery from the hatchery through production, says Lively.

“We went through a lot to meet this standard and it’s an ongoing process,” he says. “It’s nice when you have someone from the outside who tells you that you are doing things right.”

Marine Harvest, which is the world’s largest producer of farmed salmon, raises its fish in Norway, Chile, Scotland, Canada, Ireland and the Faroe Islands.

Clare Backman, sustainability director for Marine Harvest Canada, says Norway is still the company’s largest producer and Canada and Scotland have eclipsed Chile for second place.

Marine Harvest sells 66 percent of its Canadian harvest in the United States, primarily along the Pacific I-5 corridor, says Backman. So if American prices fall, it has a fairly major impact, he adds.

No matter which country the salmon is coming from, Backman says Marine Harvest is pushing for standardization as much as it can. “We push for standardization in that customer sales and nutritional value are uniformly high and we want contamination to be uniformly low. We have set sustainability standards as well,” he says.

But Backman concedes that there are some differences because of the nutrients and movement of the water. “We use the same species throughout the company, but the feed and current and the water chemistry can make a difference,” he says.

Some of the company-imposed sustainability standards revolve around minimizing waste in the water, the use of antibiotics and the number of escaped fish. Backman says Marine Harvest is seeking third-party audited certification and that all the operations currently meet ISO standards.

“Our key message to retailers who are interested in sustainability is telling them about our involvement with different NGOs (non-governmental organizations),” says Backman about a process that has been going on for at least six years.

Product traceability is another growing interest, he says, and salmon farming is already geared toward that. “Salmon farmers grow the fish starting from the egg, so we know where it comes from, what goes into its feed and can demonstrate its safety. Salmon farmers shine in that area,” says Backman.

Retailer perspective: A good mix

At Atlantic Seafood Market in Old Saybrook, Conn., owner Lisa Feinman offers her customers a mix of farmed and wild salmon throughout the year. The most popular farmed product comes from Scotland’s Shetland Islands. While it is labeled organic there, it can’t be officially called organic in the United States. She complements that product with farmed Arctic char from Iceland. And when one or both of those is in short supply, she has offered customers Canadian farmed product. “It’s about getting the best for the customer,” explains Feinman, who has owned Atlantic Seafood for seven years.

In the summer, she notes, wild salmon gives farmed stiff competition because all the fish is fresh. But in the winter, when she relies on frozen wild salmon, many customers go back to farmed, preferring fresh over frozen.

Overall, she says, salmon is her best-selling fish, beating out local swordfish and tuna in the summer. Feinman has seen prices fall a bit. For a while, she says, farmed was getting close to wild in price. In the peak of the summer, Feinman was selling Shetland salmon for $14.99 a pound for boneless fillets.

What is perplexing about seafood and salmon in particular, says Feinman, is that some consumers seem to have an issue with farmed product when they readily eat other farmed proteins such as beef, pork and chicken. “The consumer doesn’t have an issue with other proteins, but with seafood it is a [perceived safety] issue,” she says. “It’s an interesting hurdle to get over.”


Contributing Editor Joanne Friedrick lives in Portland, Maine

 September 2011 - SeaFood Business 

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