Commercial fishers find salmon market a challenge

Posted: Saturday, March 02, 2002

Cook Inlet salmon fishers are in for another slim year, with an average catch hobbled by below-average prices, but halibut will continue to buoy the industry with near-record high stocks.

While the salmon industry is reeling from low prices, Cook Inlet fishers are among those fighting to reclaim a larger share of the market through a proven marketing program.

"It's not all doom and gloom," said Barbara Belknap, executive director of the industry-funded Alaska Seafood Marketing Institute.

"We have the most exquisite salmon in the world," she said in Homer last spring.

The challenge is convincing the industry to treat the fish that way. As quality improves, markets will strengthen and prices should follow.

In the meantime, however, Cook Inlet salmon fishers will have to suffer through another bleak season. The Alaska Department of Fish and Game predicts a sockeye harvest of 2.7 million fish in upper Cook Inlet, which is more than the last few years but well below the heyday, when drift and setnet fishers landed double or triple that amount year after year.

And even though the 2002 forecast is in line with long-term averages, there's no promise that the run will come in as projected, said Fish and Game research biologist Mark Willette. Last year's forecast was similar to 2002, but the actual return was about 1 million fish lower.

In the old days, salmon prices followed the laws of supply and demand, so a low catch usually meant prices would rise. That changed as salmon farming exploded in the 1980s. A flood of Chilean fish on Japanese markets has caused the bottom to fall out for Alaska salmon.

A double whammy affecting Alaska fishers is the continuing dismal state of the Japanese economy. As the world's leading seafood customer trims its spending, salmon prices have plummeted. The same Cook Inlet sockeye that in 1988 fetched $3.25 a pound last year brought just 65 cents. Last year Cook Inlet fishers earned $8.8 million; they averaged more than $25 million in each of the previous seven years.

This year looks no better and could be even worse, said Eric Olsen, a member of Seasonal Seafoods, a fishers' cooperative that both catches and sells sockeyes. Market demand appears to be about the same as last year, he said, but the yen has dropped some 10 percent in value, putting further downward pressure on prices.

Seasonal Seafoods, like most processors, has traditionally sold the bulk of its red salmon in Japan, Olsen said. That's starting to change, however.

"More and more we're holding our fish in Seattle and moving them on domestic markets," he said.

Americans have never been especially interested in salmon, usually choosing their fish according to price rather than species. Consequently, the higher-priced salmon such as sockeyes and troll-caught kings have never developed the following in the United States that they have in Japan.

So while fishers may be singing the blues over low prices, Olsen is optimistic.

"Prices are so low it's an opportunity" to attract new buyers to salmon they've never tasted before, he said. "Now it's as cheap as codfish, and all of a sudden people are saying this 40-cent or 60-cent salmon looks like a bargain."

If Americans get hooked on red-fleshed, tastier sockeyes -- as they have on dark-roasted, tastier coffees -- the future begins to look brighter.

"If ever there was a time, it's now," Olsen said. "When wholesale prices are this low, we can undersell farmed salmon."

Numerous efforts are under way to help strengthen those marketing attempts. Congress is considering new labeling regulations that would require restaurants and stores to declare whether their salmon is wild or farmed. The Alaska Legislature has been asked to beef up the budget for the Alaska Seafood Marketing Institute.

And fishers, themselves, are tackling a problem long considered one of the failings of the Alaska salmon industry -- quality. When wholesale buyers open a box of frozen Alaska salmon, it could be in perfect condition, but often is not. Improving quality is seen by many as the best way to regain market share.

Work has already started on a program to create a Cook Inlet salmon brand name, with hopes that buyers eventually will recognize the name and feel it's a product worth buying again. The idea has worked for California raisins, Washington apples and Copper River salmon.

To qualify for the Cook Inlet label, the fish will have to pass quality standards. In turn, fishers will have to ice their catch and handle it far more gingerly than in the past. A third-party contractor will assure quality.

Fishers and processors will pick up the tab for the effort, but until the program gets started, the Kenai Peninsula Borough Assembly has been asked to forward-fund it to the tune of $300,000. Grants may be available to help pay that down, assembly member Chris Moss of Homer said recently.

The first Cook Inlet brand salmon could be on the shelves in a year.

Plans announced last year to do a comprehensive study of Cook Inlet salmon fisheries with an eye toward buying out commercial fishers have been put on ice by the University of Alaska Anchorage.

"Not by a long shot is that the best use of the university's resources," said economist Gunnar Knapp of the Institute of Social and Economic Research.

Instead, the Alaska Legislature, the Alaska Board of Fisheries and individual fishers are considering measures to improve the economic health of fishers who stay in the business. Last month, for example, the board approved a proposal by Chignik salmon seiners to form a cooperative, allowing a few boats to harvest the run and saving everyone else the cost of gearing up and fishing.

Rep. Drew Scalzi, R-Homer, has several bills in the Legislature that would help fishers revamp their fisheries through such means as providing incentives for two permit holders to fish on the same boat, and changing the state's permit buyback program to make it easier for fishers to reduce competition in their fleet and improve efficiency.

Salmon isn't the only fish in Cook Inlet, however. Halibut quotas are up slightly over 2001, to 61.8 million pounds. Homer has consistently been the top port in Alaska for halibut landings and is likely to be No. 1 again in 2002. Most of that fish is put on trucks and hauled to Anchorage or the Seattle area for processing.

Brad Faulkner of Alaska Custom Seafoods in Homer said he expects halibut prices to be at or slightly lower than last year due to the flat American economy. That would give fishers $1.80 to $2 a pound once the dust settles after the March 18 opening.

Cook Inlet's biggest herring fishery, the sac roe seine fishery in Kamishak Bay, is closed again this spring due to low stocks. The Department of Fish and Game continues to monitor the herring population, and has adopted a new, more conservative management plan that should help maintain the fishery when it reopens.

Shellfish farming continues to mature in Kachemak Bay, with about a dozen farms in operation. Restaurants and seafood shops from Homer to Anchorage sold about $600,000 worth of their product last year, according to the Kachemak Bay Shellfish Growers Association.

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