COVID-19 pandemic hits Alaska seafood industry with lower prices
ANCHORAGE, Alaska (KTUU) - The pandemic presented Alaska’s seafood industry with a number of challenges, and now the industry is dealing with depressed prices for seafood products.
In a briefing paper compiled for the Alaska Seafood Marketing Institute, analysts with the McDowell Group found that the pandemic is the largest reason for an overall decline in the harvest value of Alaska seafood.
“Key reasons for weaker harvest value include higher operating costs, less value-add production, reduced demand due to foodservice closures, and general market uncertainty,” the report stated.
Sales of Alaska seafood in grocery stores and retail markets were up $43 billion through the first half of 2020 compared to the previous year, but McDowell Senior Analyst Dan Lesh says that increase didn’t outweigh the cost of losing much of the restaurant and food service industries.
“Retail went up quite a bit, spending there was up, and seafood was one of the things people were buying the most of. It didn’t make up for the declines in food service sector, partly because not all products can transfer between the two. Some things are just geared toward the restaurant industry,” Lesh said.
A fish caught and delivered to market fresh brings more value than fish that are frozen. Lesh says a lot more of the Alaska salmon catch this summer were frozen.
“There was a number of reasons why fresh product wasn’t as available this year. Partly there wasn’t the demand. Also there was fear of planes flying. So getting those to market was harder. It takes more workers to produce fillets and fresh seafood and we had fewer workers on our processing lines. People were spaced out more. The run in Bristol Bay was compressed, a week or two shorter than normal. All those reasons come together to increase the amount of frozen product we have this summer,” Lesh said. “Frozen seafood will last longer but there is a cost to that and there is a limited amount of cold storage around the state and around the world, and you’re competing with all these other protein sources which are also in turmoil this year as well.”
Although the pandemic is a major factor influencing the Alaska seafood industry right now, Lesh says other factors have come into play affecting the value of Alaska’s products.
“On top of COVID impacts, which have been substantial, we’ve had some market disruptions for other reasons. We still have an ongoing tariff dispute with China. So there’s a lot of moving pieces. There were slower runs of salmon, and Pollock this year was slower fishing,” Lesh said. “So looking forward to what the total value for the year is, we could potentially be in the situation where the ex-vessel value, the value that goes to fishermen, is down 15 or 25% this year compared to last year. So it’ll be interesting to see how the markets hold up in the fall, and both the export markets and the domestic.”
The briefing paper is the first in a series of papers showing the impact of the pandemic on Alaska’s seafood industry. Click here to view it on the ASMI website.
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