Laine Welch: Demand for salmon permits high; so are prices

FisheriesSeptember 14, 2013 

Alaska's record salmon season has permit brokers hopping as buyers seek to break into or expand their opportunities in many fisheries.

Notably, brokers say there is "a lot of great buzz" at Bristol Bay, despite a lackluster sockeye fishery that saw the bulk of the red run come and go eight days early.

"Prior to the season the drift permits went for under $100,000, but we just sold one for $125, 000," said Doug Bowen of Alaska Boats and Permits in Homer. Most of the bump is due to optimism about the sockeye base price of $1.50 per pound, a $.50 increase from last year.

Data from the state Commercial Fisheries Entry Commission show that Bristol Bay driftnet permit values have remained near or well over $100,000 since 2010, and increased steadily each year after dropping below $20,000 in 2002.

This summer also was a great one for salmon seiners, which has driven up interest in those fishing permits.

"These folks had good seasons and made some money. They're going to be looking to expand their operations, pick up another permit, another boat or upgrade," Bowen said.

Salmon seine permits at Southeast Alaska have the distinction of being the highest priced at more than $300,000.

"There's very little on the market and it's hard to tell where that will shake out," said Olivia Olsen of Alaskan Quota and Permits in Petersburg. "Most people think the permits are headed up because they have had such a fantastic year, but they had moved up so fast prior to the season, that might not happen."

A Chignik seine permit recently sold for $225,000, Bowen said, and Prince William Sound seine permits just broke the $200,000 mark. At Cook Inlet, seine cards are stagnant after a disappointing season, but still valued around $70,000. That compares to a Cook Inlet permit value of about $54,000 last year and just $17,000 in 2010. Kodiak seine permits are still hovering around $40,000 and interest has picked up slightly; at the Alaska Peninsula, the seine value is holding steady in the high $60s.

"All of these permit prices are extremely volatile," Bowen said. "A good fishing year or forecast can make permit prices double in a year depending on the fishery. Then if they have a lousy year or it looks like they are heading into a bad time, you can watch permit prices tumble by 50 percent. But we are seeing a trend of better salmon prices and that has sparked enthusiasm with the fleet and buyers."

Find a list of all Alaska limited entry permit values (based on the average price of actual sales) at www.cfec.state.ak.us

IFQ funk

Brokers tell a far different story when it comes to sales of halibut catch shares.

"In a word, it's negative," said Doug Bowen, adding that it's been the slowest time for IFQ (individual fishing quotas) sales in the 17 years he's been in business.

Halibut catch limits have been slashed by 70 percent over the past five years and the outlook, at least for the short term, is grim. Prices at the docks also have plummeted by a dollar or more.

"Buyers are understandably reluctant to purchase quota that they believe will be cut next year, and sellers are faced with the difficult decision to either hold out for their price, or hold onto their quota and perhaps have less to sell next year. That's pretty much taken all the wind out of the sails of the IFQ market, and demand is non-existent," Bowen said.

The one exception is Southeast Alaska, which has avoided halibut catch cuts for a few years.

"Fishermen here are real happy with their catch, the numbers per skate, and availability of the fish," said Petersburg's Olsen. "They feel like maybe there won't be more cuts in Southeast and there might be increases. So this is the only area where halibut has been moving at all this year. I have zero interest in any other area."

The price for Southeast Alaska halibut shares also has "been out of sight," selling at between $38 to $46 per pound. "And as soon as it's in, it's moving," Olsen added.

Doug Bowen said he is confident the IFQ market will rebound for other Alaska regions, as it has in Southeast.

"When it hit bottom there and then turned around, the optimism came back and that's when we saw those prices take off," he said. "So I imagine we would see the same scenario in these other areas when the cuts bottom out."


Laine Welch is a Kodiak-based fisheries journalist. Her Fish Radio programs can be heard on stations around the state or found at alaskafishradio.com. Contact her at msfish@alaska.com.

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