« November 2006 Table of Contents
As Alaska moves toward higher-value products, the West
Coast braces for another lost season
By Steven Hedlund
November 01, 2006
Not so long ago, Alaska's salmon industry was in the dumps.
Fishermen were struggling to make ends meet, and processors
were folding their operations or being gobbled up by their
But over the past three years, the industry has pulled
itself out of a hole by producing more salmon products of
higher value, a trend that became apparent this year.
Alaska salmon processors are shifting sockeye production
from frozen H&G fish to fresh and frozen fillets and pink
production from canned to frozen H&G fish.
Meanwhile, demand for fresh fish, especially kings, goes
through the roof during the state's summer salmon fishery,
thanks to regional marketing programs that tout the five
Pacific species - king (chinook), sockeye (red), pink, coho
(silver) and chum (keta) - and the numerous rivers from which
Demand for fresh Alaska kings was also perpetuated this year
by the near shutdown of the Oregon and northern California
fisheries to protect Klamath River kings.
"Over the past three years, we've seen growing demand for,
and strengthening prices of, Alaska salmon in general," says
Chris McDowell, seafood industry analyst for The McDowell Group
in Juneau, Alaska.
Wholesale prices of all five species were up 14 to 35
percent this year, he notes.
Part of the reason is that this year's Alaska salmon catch
was expected to fall shy of 140 million fish, down 82 million
fish from 2005's record harvest and down 27 million fish from
the 10-year average. (The Alaska Department of Fish and Game
was due to release preliminary 2006 landings on Oct. 31.)
But the biggest reason that salmon prices are climbing is
the move toward higher-value products.
Make way for fillets
Alaska processors are shipping less frozen H&G sockeye
to Japan and more sockeye fillets to the Lower 48 and Europe.
Historically, Japan has absorbed the bulk of Alaska's sockeye
"Alaska is constantly adding fillet lines throughout the
state, especially for sockeye," says McDowell. "It's not that
Japan is backing off."
Alaska processors are trying to boost the sockeye market and
prices by targeting the Lower 48 and Europe, where fillets, the
preferred product form, fetch higher prices, he explains. The
challenge is satisfying U.S. and European buyers who are
accustomed to the consistent size and grade of farmed Atlantic
Through August, Japan had imported only one-third, or about
27 million pounds, of Alaska's sockeye production, compared to
69 percent in 2005 and 66 percent in 2004, says McDowell.
(Japan receives the bulk of its Alaska sockeye from January to
Production of sockeye fillets reached 10 million pounds for
the first time in 1996. Now it totals about 30 million pounds,
As demand for sockeye fillets continues to strengthen, so do
prices. At wholesale, fresh sockeye fillets averaged $5.48
between May and August, up from $4.18 last season, while frozen
fillets averaged $4.32 this season, up from $3.31 last season,
reports the Alaska Department of Revenue (ADR).
Fresh H&G sockeye averaged $3.13 this season, up from
$2.65 last season, while frozen H&G averaged $1.86, down
Urner Barry Publications of Toms River, N.J., quoted frozen
H&G sockeye at $2.30 to $2.50 for 4-6s, $2.10 to $2.25 for
2-4s and $2.50 to $2.75 for 6-9s in mid-October.
Sockeye, the financial backbone of the industry, is by far
Alaska's most valuable salmon fishery, with an ex-vessel value
of $193.7 million in 2005.
The Bristol Bay sockeye harvest, the state's biggest sockeye
fishery, yielded 28.8 million fish in 2006, up from 24.5
million fish in 2005 and up from the 10-year average of 22.7
million fish. Fishermen received an average of 55 cents a pound
for their catch this season, down from 60 cents last
Canning the can
Alaska processors are also canning less pink salmon and
producing more frozen H&G pinks, which they're exporting to
Europe or to China, where it's reprocessed and either consumed
in Asia or shipped back to the United States.
Part of the reason for the shift away from canning is that
frozen H&G pinks fetch higher prices.
"The processing sector is investing in creating innovative,
time-friendly salmon products," says Laura Fleming,
communications director for the Alaska Seafood Marketing
Institute. "For years we've been talking about adding value [to
Alaska salmon]. Now it's really happening.
"Finally," she notes, "we're making huge strides toward
being a market-driven business, not a supply-driven
Also contributing to the interest in frozen pinks are
canned-pink prices, which tanked in 2003, bottoming out at $34
Traditionally, about three-quarters of Alaska's pink
production is canned. This year, only 55 percent was canned,
the lowest percentage ever.
"That's a major change," says McDowell.
As a result, canned-pink production and inventories are as
low as they've been in years, says McDowell. The canned-pink
pack totaled 1.8 million cases in 2006, down from 3.5 million
cases in 2005.
That's because this year's pink harvest totaled a
disappointing 69.6 million fish, down 38.4 million fish from
the preseason projection and down 91.6 million fish from last
year's record catch.
"There was an oversupply of pinks," says McDowell. "It was
one record harvest after another. The 2005 harvest was a
But those days are over for now. As of Sept. 1, canned-pink
inventories totaled just 2.6 million cases (48-tall
equivalent), down from 4.1 million cases a year ago.
There's a 23 percent difference between canned-pink
inventories and the five-year September-to-August sales average
of 3.2 million pounds.
What's more, British Columbia's canned-pink pack came to
just 39,000 cases in 2006, 11 percent of the 308,000-case
Due to the supply shortage, prices of canned pinks are on
"Prices won't shoot through the roof," says McDowell, "but
it's clear they're going up."
Higher prices are expected to curb demand for canned pinks,
which means sales from September 2006 to August 2007 may not
reach the 3.2-million-pound five-year average, notes
He pegged the average ex-vessel price of pinks at 14 cents a
pound this season, up from 12 cents last
At wholesale, fresh H&G pinks averaged 66 cents this
season, up from 58 cents last season, while frozen H&G
averaged 78 cents, up from 62 cents, according to the ADR.
Canned pinks commanded about $41 a case this season.
However, "we anticipate a large pink harvest in 2007," says
King of the castle
The pink and sockeye harvests may be Alaska's largest salmon
fisheries, but that doesn't mean they receive the most media
Thanks to the efforts of regional marketing programs, king
salmon from the Copper, Kuskokwim, Yukon and other rivers is
prized by food writers, retailers, chefs and consumers
nationwide for its high fat content and pronounced, buttery,
But the species represents less than 10 percent of Alaska's
total salmon catch in terms of ex-vessel value ($24.4 million
in 2005) and only about 1 percent in terms of volume (10.7
million pounds in 2005).
Chinook prices continue to soar. At wholesale, fresh king
fillets averaged a whopping $7.64 at wholesale this season, up
from $5.61 last season, while frozen fillets averaged $5.44, up
from $4.86, according to the ADR. Fresh H&G kings averaged
$5.56 this season, up from $4.36 last season, while frozen
H&G averaged $3.14, up from $2.49.
Some retailers tagged fresh king fillets from the Copper
River harvest, the unofficial start of Alaska's summer salmon
fishery, in the high-$30 range when it opened in mid-May. Other
retailers and chefs backed off and waited until the fishery
progressed and prices fell.
Joe Monteiro, executive chef and general manager of A Fish
Called Avalon in Miami Beach, is a huge fan of king salmon,
which he menus regularly as a special at his trendy 200-seat
Miami Beach restaurant. It's one of his best sellers when it's
on the menu.
"We sell the hell out of it every time," says Monteiro. "But
sometimes prices are a problem."
Monteiro was dishing out about $20 a pound for fresh whole
kings at times this summer. He was paying about $14 for them
last month. Monteiro charges about $28 for an 8- to 9-ounce
portion of king salmon.
West Coast disaster
It didn't help that the Pacific Fisheries Management Council
voted in April to severely restrict salmon fishing off 700
miles of Oregon and northern California coastline to protect
Klamath River kings, which are struggling due to loss of
habitat to irrigation withdrawals, dams, logging and
Fisheries managers are required to ensure that at least
35,000 kings return to the Klamath to spawn each year to keep
the population stable, but only 25,000 fish were expected to
make the journey this year.
Other salmon populations are healthy, but there's no way for
fishermen to distinguish between salmon from different rivers
when targeting the fish in the ocean.
The council cut the threshold to 21,000 kings to allow for
some fishing around the California-Oregon border. The fishery,
which runs from April to October, was essentially closed from
May to July, when the catch typically peaks.
As a result, West Coast king landings through August, which
totaled only about 114,500 fish, were down 365,500 fish from
2005 and 659,500 fish from 2004.
Tim Caluya, co-owner of Tim's Seafood in Kirkland, Wash.,
was dishing out about $5 a pound more for Oregon and California
kings this year.
At his retail outlet, Caluya marked fresh whole kings at
$12.99 for 7- to 11-pound fish, $13.99 for 11-18s and $14.99
for 18s-and-up, up from $7.99, $8.99 and $9.99, respectively,
"Prices are way up," says David Goldenberg, CEO of the
California Salmon Council, a quasi-state salmon-marketing
agency. "Some buyers are backing off and others are taking
The West Coast chinook fishery finally picked up in early
August, but it didn't last. Initially, trollers received about
$4.50 a pound for kings. But by late August, landings were
lagging, and ex-vessel prices climbed to $5, which translated
to $7 at wholesale. The harvest picked up again on Sept. 1,
when the fishery near Fort Bragg, Calif., opened and the
4,000-king limit was exceeded, but ex-vessel prices held firm
"There were only two to three weeks that fishermen were
actually able to catch their limit of 75 fish per week," says
Goldenberg. "The industry is really hurting."
In August, U.S. Commerce Secretary Carlos Gutierrez
declared the West Coast salmon fishery a failure, which opened
the door for federal aid to fishermen.
The Oregon legislature has so far approved $1 million in
emergency funds to fishermen. But a bill in the California
legislature that would provide $25 million in grants and
interest-free loans to fishermen is being held up.
However, low-interest loans are available to California,
Oregon and Washington fishermen and processors through the
federal Small Business Administration, if they qualify.
Bill Carvalho, owner of Carvalho Fisheries in Eureka,
Calif., applied for a SBW low-interest loan, but was denied.
King salmon used to represent 15 to 20 percent of his
"I filled out paperwork showing my [chinook] sales dropped
from $2 million in 2004 to zero in 2006, but my credit was too
good and I didn't qualify," he says. "Hardly anyone is
qualifying for the loans."
Carvalho was forced to lay off several of his employees in
the office and processing plant this year.
"I used to buy hundreds of thousands of pounds" of kings, he
says. "I bought two fish this year, and I ate both of
Some retailers and chefs are purchasing kings directly from
fishermen on the docks and bypassing the middleman to keep
retail and menu prices down, notes Carvalho.
Carvalho is processing more albacore tuna this year to
compensate for the lack of kings, but albacore supplies are up
worldwide and prices are down as a result.
"There's really nothing you can turn to replace a fish that
you've spent years building a market for," he explains.
But Carvalho doesn't think the market for Oregon and
California kings will disappear if and when the fishery
"Salmon is a highly valued food, and will continue to be,"
he says. "But some infrastructure may go away, and that'd
[drive up chinook prices] because there'd be less
"It may be three years before we see the fishery return to
where it was," adds Goldenberg. "It's a habitat issue, not a
fish population issue, and buyers understand that. I don't
think at this point in time that the market will be lost
Associate Editor Steven Hedlund can be e-mailed at