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Alaska salmon prices seem to be rebounding

Alaska's salmon season has started with optimism, a far cry from the bleak feelings a year ago when the fishery was blown asunder by a perfect storm of depressed currencies, salmon backlogs and global markets awash with farmed fish.

Prices to fishermen fell nearly 41 percent between 2013 and 2015, years which produced the two largest Alaska salmon harvests on record.

But in the past six months, those trends have turned around.

"Based on current market conditions and harvest expectations, it appears probable that prices will begin improving in 2016 and there is an excellent chance total ex-vessel (dockside) value will rebound in 2017," said the Salmon Market Information Service report just released by the Alaska Seafood Marketing Institute. A salmon industry analysis, data on harvest and a forecast are parts of the report.

One of the biggest turnarounds involves global currencies.

"Going into last year, the dollar was getting stronger against our major customers and competitors. That makes our salmon more expensive to foreign buyers and the competing imports less expensive," said Andy Wink, a fisheries economist at the McDowell Group.

That trend has reversed, and the dollar has weakened against other currencies, notably with the euro (slightly) and the Japanese yen, which is about 13 percent stronger than it was a year ago.

"That will make our products less expensive to those two key Alaska salmon markets," Wink said.

Chilean farmed salmon takes a hit

Another positive turnaround involves salmon supplies.

"If you want to see what's happening with fish prices, look at supply and demand. Look at how much was produced in Alaska and how much our competitors produced," advised fisheries economist Gunnar Knapp, the retiring director of the Institute of Social and Economic Research at the University of Alaska Anchorage.

The loss of tens of millions of Chilean farmed salmon due to an ongoing toxic algae brew caused by warming oceans has taken the biggest bite out of world supplies. The U.S. is Chile's largest customer, last year importing 295 million pounds of farmed salmon valued at $1.16 billion.

"In Japan, Alaska sockeye's biggest competition is farmed Chilean coho salmon, and an estimated 20-30 percent died in the algae bloom," Wink said.

Japan buys 80 percent of Chile's farmed coho salmon, and wholesale prices last month shot up to $3.10-$3.35 per pound, up 20 percent from the same time last year.

A failure of Japan's wild and farmed salmon fisheries also triggered a surge of sockeye demand. Alaska sockeye exports to Japan at the end of 2015 were up 320 percent over the previous year, and they're expected to remain high as the backlog clears out prior to the new fishing season.

Another plus: backlogs of Alaska salmon, primarily sockeye, have moved briskly at retail outlets all year.

"Promotions during Lent pretty much cleaned out the freezers," Wink said.

"I definitely think things will be better than a year ago," agreed Norm Van Vactor, president of the Bristol Bay Economic Development Corp. and former manager at Leader Creek and Peter Pan Seafoods. "Last year, we would be talking about all the frozen fish in inventory. This year, things moved smoother and we're sitting in good shape."

Other supply-and-demand indicators:

• Alaska's projected salmon catch of 161 million fish this year is a 40 percent decrease. That's largely due to an off year for pinks.

• Salmon fisheries along the West Coast are expected to be way down. Ditto Russia's catch.

• Some of the supply shortfall will be made up by Norway, which is battling its own fish losses due to salmon lice.

Another plus for wild salmon: Last month, the FDA lifted the ban on U.S. imports by Norway and other countries that use lice-killing chemicals (azamethiphos) in their fish farms. It comes after years of pushing by the Fish Vet Group, bankrolled by Benchmark, a lice treatment producer.

By law, all seafood sold in the U.S. must be labeled as wild or farmed and list its country of origin.

Speeding up the fish board

The Alaska Board of Fisheries could vote this month to streamline the way it reviews proposals that deal with oversight of Alaska's commercial, sport, personal use and subsistence fisheries. The seven-member board addresses several hundred regulation-change proposals during annual meetings, and fishery management is based on those decisions.

"We want to see if there is a way to speed up the proposal review process," said Glenn Haight, the board's executive director.

In the face of tightening budgets, time is money. Haight said the board is considering quicker ways to deal with technical proposals, often submitted by fishery managers.

"Things like marker identifications – rather than using the old stump that's down by the point across the bluff as an identifier, they might use GPS," he explained. "Those kinds of things get introduced, they're reported on before meetings, then discussed in committee … It would be an attempt to streamline that."

The board could vote on a "consent-agenda concept" for technical proposals, commonly used by local governments.

"Where things that are fairly pro forma and aren't terribly controversial, the board would try and identify those things in advance and make them known, and if none of the proposals raised concern, the board could take them under consent agenda and vote them all in the affirmative at one time," Haight explained, adding that "it would allow more time to work on the more substantive proposals."

The May 24 teleconference is listen only, but the public can comment on the revised proposal process through May 20.

Laine Welch is a Kodiak-based commercial fishing columnist. Contact her at msfish@alaskan.com.

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