The seeds of disaster were already sown when the Cook Inlet sockeye fishery reached its zenith.
Prices peaked in 1988, when fishers received an average of $2.47 per pound for upper inlet sockeyes.
"Those were the glory years. People were rich. Permit prices were rising. Boats were getting bigger," said former Alaska Fisheries Development Foundation director Chris Mitchell. This year, processors are paying just 60 to 65 cents per pound for upper inlet sockeyes.
"Two things happened. Farmed salmon first began to appear in the Japanese market, because sockeye salmon were so expensive. Second, we decided to sue the Japanese. How many people sue their biggest customer and still expect that customer to be the biggest customer?"
The 1995 class-action lawsuit alleges processors and Japanese trading companies fixed prices paid to Bristol Bay fishers for salmon. A state judge tossed the lawsuit for lack of evidence in 1999, but plaintiffs recently asked the Alaska Supreme Court to send it back for a jury trial.
By Salmon Market Information Service figures, farmed salmon production grew from 7,000 metric tons in 1980 to 533,000 metric tons in 1995. In 1998, farmed production reached 801,000 metric tons, surpassing the world wild salmon harvest. U.S. salmon, which come mainly from Alaska, now comprise just 20 percent of Japanese imports, down from 90 percent in 1985.
"In Alaska, beginning in the 1980s, you started seeing and hearing about farmed fish -- particularly Chilean farmed fish," said Don Giles, president of Icicle Seafoods. "When they started in the early 1990s, they just kept doubling the supply, and at the same time the Japanese were investing in Alaska, they were investing in Chile.
"First, it was farmed cohos, harvested from January to March to fill the pipeline in Japan when the reds were mostly consumed. Then, the Japanese fall chum runs started growing dramatically through the late 1980s and 1990s, so you had fall salmon. Then, the Chilean trout production started growing. Then, you had trout to fill from November through January."
Meanwhile, the Alaska Legislature placed a moratorium on salmon farming in 1987 and banned finfish farming in 1990.
"It was a pretty emotional issue," Giles said. "Everybody was involved, fishermen, processors, politicians, the state. We underestimated what would happen with the farmed fish explosion. We thought we could ignore it. Our fish were in demand. The concern was that Alaska was going to grow competition for independent fishermen who were harvesting fish already."
Mitchell said salmon farms need not be a threat. Commercial fishers could own shares in the farms, harvest wild salmon in summer and sell farmed fish the rest of the year. Processors could operate year round.
Fishers feared farming would put them out of business, but it was more than that, he said.
"Maybe the biggest obstacle to modernizing the Alaska salmon business is that for Alaska and fishermen, (fishing) is a way of life. Changing a culture -- that's difficult," he said.
Before statehood, canneries owned the traps and controlled Alaska fisheries. There were few independent fishers.
"Statehood was about getting rid of the traps," Mitchell said. "Fishermen said farmed fish must be another ploy by processors to get rid of the fishermen."
So, Alaska opted out. Then, in the 1990s, the wild sockeye harvest declined, and farmed fish filled the gap.
The result was catastrophe for processors as well as fishers.
Ward's Cove Packing Co. closed its Kenai plant in 1998. Icicle has not rebuilt its Homer plant, which burned in 1998. Since 1988, Snug Harbor Seafoods has bought Royal Pacific Fisheries and Dragnet Fisheries has closed.
"There are only five decent-sized companies left on the Kenai Peninsula and a handful of smaller custom guys," Mitchell said. "Every year, more are leaving. On the Kenai Peninsula, one problem is competition for the tourist dollar versus the commercial fishing dollar for every salmon."
The Board of Fisheries has been allocating Cook Inlet fish from commercial to recreational fishers, he said.
"Ward's Cove says, 'I can get more fish cheaper by going to Bristol Bay," Mitchell said.
During a meeting with state disaster officials after last year's dismal run, Dan Foley of Pacific Star Seafoods said seven years without profits have sucked the capital from his business.
"If I walk into a bank right now, they just laugh at us," he said. "... I have walls falling down. I have docks collapsing."
The inlet lacks the capacity to process the next strong run, he said, and some markets no longer recognize Cook Inlet as a fishery.
Mitchell said Alaska has two main sockeye markets. It sends frozen sockeyes to Japan and canned sockeyes to Great Britain, its former colonies and Europe. There has been no rise in demand from Britain and Europe to match the slump in Japan. But Japan has not always driven the market.
Clem Tillion, who began fishing Cook Inlet in 1949, said Britain became Alaska's biggest customer soon after the first canneries opened in Alaska in the late 1880s.
"They had British Columbia," he said. "With the beginning of the canned salmon industry, the British Empire settled on canned salmon as cheap protein for the whole empire."
Early canners also sold salmon in the United States, where by the 1930s, it was a staple.
"The conversion to tuna came during World War II," Tillion said.
During the war, the government bought the entire Alaska pack, because the supply was limited and it wanted food soldiers were familiar with, he said. By the time the war was over, tuna had replaced salmon at home.
But demand remained strong for salmon in Britain and its former colonies.
Alaska salmon landings peaked in the 1930s, then hit the skids in the late 1950s. In the 1960s, many Alaska canners went bankrupt, Mitchell said. In the 1970s, runs began to recover, but the market for canned salmon did not. In the 1970s, the Alaska industry turned to Japan.
Tillion said that before World War II, the Japanese had no need for Alaska salmon. Under the 1905 treaty that ended the Russo-Japanese War, Russia ceded its fishing rights on the Okhotsk, Japan and Bering seas to Japan. Tillion said the Japanese even controlled Russian salmon streams until three days before the end of World War II, when Russia declared war on Japan and took them back. Stalin directed Russian salmon to Eastern Europe, Tillion said. The Japanese got serious about fishing the open ocean.
Michael Dahlberg, director of the National Marine Service Auke Bay Lab near Juneau, said the Japanese high seas fishery began in earnest in 1952. In subsequent years, the Japanese caught more salmon than Bristol Bay sockeye fishers.
But, in 1977, the Soviet Union tossed the Japanese fleet out of its exclusive economic zone, Dahlberg said. The Soviets set quotas on the Japanese catch outside their EEZ and enforced them by intimidation -- even sinking some Taiwanese boats. The Soviets had cut the Japanese high-seas quota to nearly nothing by 1990, when a United Nations convention banned high-seas gillnets outside the EEZ of any nation.
A treaty after World War II kept Japanese fishers west of 175 degrees west longitude, he said, but in 1978, a new agreement pushed the line to 175 degrees east longitude, 10 degrees closer to Japan. In 1987, the United States denied the Japanese fleet a permit to take incidental marine mammals, ending the Japanese fishery inside the U.S. EEZ. About the same time, the Soviet Union allowed Japanese fishers back into its EEZ, but that was a much smaller fleet, Dahlberg said.
As Japan gradually lost access to high-seas fisheries, its economy and demand for seafood grew. By the 1970s, Alaska was seeking markets, and Japan wanted sockeyes. But the Japanese do not not want canned salmon, Mitchell said. They wanted quality.
"When you go to a Japanese restaurant, the meals are so perfectly prepared, sometimes they look like art," he said.
But U.S. processors, still smarting from poor runs in the 1960s, lacked capital to invest in new technology, he said, and some viewed Alaska salmon as an industry whose time had passed. The Japanese bought into Alaska fisheries, he said, providing much of the capital to convert Alaska processors from canning to freezing.
Giles said Icicle built floating freezer plants with its own money. But Japanese companies -- Taiyo, Nippon-Suison, Marubeni and others -- did buy in. Marubeni owned Kenai Packers, he said, and the Japanese financed several smaller packers.
"There was a big expansion of freezer plants on the Kenai River in the mid-1970s," he said. "Salamatof, Dragnet, the old R. Lee Seafoods, which is Inlet Salmon now, Royal Pacific -- all those plants were built in the 1970s."
The high prices Japanese paid for frozen sockeyes drove the switch from canning to freezing. According to the Salmon Market Information Service, Alaska canned 80 percent of its sockeyes in 1976, but just 8 percent in 1988. Giles said Icicle's Seward plant is the only cannery left on the Kenai Peninsula.
Japanese demand ran strong for a decade, pushing sockeye prices beyond what the average American was willing to pay. Then, Mitchell said, the Japanese discovered farmed salmon was not so bad.
"It's consistent. It's fresh. It's available year round," he said. "It's handled like food, not like pieces of wood. Japanese who were paying high prices for sockeyes were willing to try it."
The Japanese taste for farmed fish grew. Meanwhile, the Japanese stock market crashed in 1990, and Japan slid into recession. The price per pound processors paid for upper inlet sockeyes fell from the high of $2.47 in 1988 to $1.70 in 1989, $1.55 in 1990 and $1 in 1991. And it wasn't just Cook Inlet.
In 1991, Bristol Bay fishers went on strike. The Alaska attorney general's office investigated Bristol Bay processors, but concluded in a 1993 report, "We make no claim to having conclusive evidence of price fixing or other illegal conduct, but we do believe that the report shows how various parties had the means, opportunity and motive to reduce Bristol Bay salmon prices in recent years."
The class-action lawsuit begun in 1995 alleges processors and Japanese trading companies fixed prices paid to Bristol Bay salmon fishers.
Rudy Tsukada, research section chief for the Alaska Division of Trade and Development, said the Japanese used to treat wild Alaska sockeye salmon like caviar.
"Now, you see red salmon in the rice bowls with the tuna and everything else. It's gone from being this premiere fish to being a household item," he said. "I go to a (Japanese) department store, and a slice of Alaskan sockeye costs $2 or $3. That's right there with pork and beef. The Chilean stuff is $1 per slice. ... When I was standing in line, they were all buying the $1-per-slice stuff."
The Kenai Peninsula Borough recently hired Mitchell to design a marketing plan to put Cook Inlet commercial fisheries back on track. Mitchell said he plans to develop a strategy to improve and guarantee the quality of Cook Inlet salmon and studies of Cook Inlet sockeyes to identify properties that make them unique.
The goal is to develop a Cook Inlet brand with strict standards to guarantee quality, then market that to Lower 48 retailers and restaurants interested in quality-guaranteed salmon, he said. His report is due to the borough assembly in September.
© 2017. All Rights Reserved. | Contact Us