« November 2006 Table of Contents 
Atlantic salmon
With farmed salmon in demand, buyers look to
Canada
- James Wright
November 01, 2006
As farmed salmon prices reached record highs in 2006, U.S.
buyers relied more on whole fish from Canada, where a newly
consolidated pool of suppliers produced large volumes with
limited processing capabilities. Whole salmon imports from
Canada this year are up 26 percent.
Meanwhile, consumer demand for farmed salmon will be driven
by the overall health of the U.S. economy, according to the
October report released by the U.S. Department of
Agriculture's Economic Research Service, "Aquaculture
Outlook."
The federal government's assessment is logical: With demand
higher than ever, only exorbitant prices could slow
consumption. But price doesn't seem to be stopping seafood
buyers or consumers at this point.
Prices for farmed salmon aren't about to drop. According to
a September report by the Food and Agriculture Organization of
the United Nations, prices in the U.S. market will remain under
pressure because global supplies are being diverted to the
European Union and Japan, where salmon fetches top dollar.
In the United States, the average price of whole fish in
mid-2006 was $2.36, 12.9 percent higher than July 2005 and
higher than the average price of fillets at this point two
years ago.
Despite the higher price, whole fish imports are driving the
market for salmon - and Canadian producers are reaping the
benefits.
Through July, U.S. buyers have snapped up more than 93
million pounds of fresh, whole Atlantics from Canada, a 26
percent increase from 2005, according to the National Marine
Fisheries Service.
Alan Craig, director of sales and marketing for Cooke
Aquaculture in St. George, New Brunswick, says whole-fish sales
are higher because of increased inventories due to recent
acquisitions. Cooke, which ships 50 to 55 percent of its salmon
to the United States, acquired Stolt Sea Farm's East Coast
operations in April 2005.
"That trend will come back to normal. I suspect there will
be quite a drop in whole-fish sales on the horizon," says
Craig, adding that prices will likely be trending
upward.
"Growth of seafood in general will be significant over the
next few years," says Craig.
In mid-October, whole fish from Canada were priced in the
mid-$1 range for 4- to 6-pounders; in the low-$2 range for 6-
to 8-pounders; in the mid-$2 range for 8- to 10-pounders; and
in the high-$2 to low-$3 range for fish 10 pounds and up,
according to Urner Barry.
Last year at this time, 6- to 8-pound fish were barely at $2
a pound, while most sizes 10 pounds and up were in the low- to
mid-$2 range.
Chile focuses on fresh
Total imports of farmed salmon this year are on a
record-breaking pace. The USDA estimates that total Atlantic
salmon imports will be up 5 percent this year compared to last
year, reaching 435 million to 445 million pounds.
For several years, Chile has sat in the driver's seat for
farmed salmon demand in the United States, supplying a bounty
of fresh and frozen fillets to the market. However, as Canada's
production of whole fish has strengthened, imports from Chile
have decreased.
Through July, imports of fresh fillets from Chile totaled
93.1 million pounds, down 17.5 percent from last year,
according to NMFS.
Still, Chile accounts for about 87 percent of U.S. fresh
fillet imports - and about 80 percent of frozen fillet imports
- and continues to feed on strong consumer demand for
salmon.
"The room for growth and expansion is by far the largest in
Chile than anywhere else in the world," says Jason Paine, VP of
Aquafarms International of Miami.
Chilean salmon is now a mainstay in the European market, and
in September Japan and Chile hammered out a bilateral trade
agreement that is expected to free the flow of salmon into
Japan. But 2006 has been a difficult year for Chilean
producers.
A two-week labor strike slowed summer production by an
estimated 40 percent at AquaChile in Puerto Montt, the nation's
top salmon producer. FAO reported that labor strikes in the
Chilean salmon industry could cause reductions in supplies and
exports in the near future, but Paine says it should not be a
problem.
"[Chilean] farms are fairly progressive in terms of social
climate and labor relations. It seems to be a fairly stable and
healthy situation for the most part," Paine says.
Chile's salmon farms have also reportedly struggled with
inconsistent water temperatures that led to slow growth rates
and reduced production. According to the FAO report, Chile's
farmed salmon production this year will "expand, but at a
slower rate than in the past.
"Demand is expected to shift to value-added salmon products
such as fresh and frozen fillets, smoked, dried and salted and
canned salmon," according to the report, which added that
Chile's farmed salmon output in 2005 was 440,000 metric
tons.
In early October, fresh PBO fillets from Chile were in the
high-$3 range for 2- to 3-pound fillets and in the low-$4 range
for 3- to 4-pound and 4- to 5-pound fillets, f.o.b. Miami.
Last year, the price for 2- to 3-pound fillets was in the
low-$3 range, while 3- to 4-pound and 4- to 5-pound fillets
were in the mid-$3 range.
Still in the crosshairs
Salmon is the third-most-popular seafood species with U.S.
consumers, who ate 2.154 pounds per capita in 2004, behind only
shrimp and canned tuna. Expect the 2005 consumption number to
be higher after NMFS releases official U.S. landings statistics
for that year.
Despite high consumer demand for salmon, it's rarely smooth
sailing for farmed salmon when it comes to media coverage. The
industry continues to be a target for environmental groups and
this year has been no different. Early last month, a team of
Canadian researchers released a study that indicates sea lice
from farmed-salmon pens in British Columbia's Broughton
Archipelago are infecting and killing wild salmon that migrate
nearby (see Newsline, page 6).
Soon after the Canadian study was released, 35 international
partner organizations launched "Farmed Salmon Exposed," a
series of events intended to show how current aquaculture
practices are harmful to the environment and threaten the
safety and lives of workers.
The group organized protests outside of supermarkets in
Canada and distributed literature at more than a dozen
retailers in the United States.
"We're not opposed to farmed salmon, but the industry needs
to adopt major reforms now," says Andrea Kavanaugh, director of
the Pure Salmon Campaign for National Environmental Trust of
Washington, D.C.
"When current practices threaten the lives and livelihoods
of people as well as kill marine mammals, it's time for
substantial changes," says Kavanaugh.
Alex Trent, executive director of Salmon of the Americas, a
marketing organization supported by salmon producers in Chile,
Canada and the United States, says agenda-driven NGO studies
about farmed fish hurt the entire salmon industry.
"Anything that says 'farmed salmon hurt wild salmon and hurt
the environment and salmon farmers don't care' gives us a black
eye," says Trent. "Those kinds of allegations tarnish all
salmon."
"All salmon growers have a deep vested concern in the
environment," says Paine of Aquafarms International. "The only
way this industry will remain viable is if we practice good
culture techniques." - James Wright