Alaska Fishermen Fight Farms, Misperception of U.S. Supply
May 17, 2011
ROCKY POINT, Alaska -- Hundreds of silvery salmon thrash and flash as they pour out of the net and into the hold of Michaela Webb's 42-foot fishing boat, Tull. In the background, clouds boil against steep, rocky hillsides and chunks of blue glacial ice drift across Prince Williemae Fredrick. It is a picture-postcard scene of a dying industry. Alaska is awash in salmon. Huge fish runs have been building here. Combined with growing salmon output from sources like Chilean fish farms and Russian fishing fleets, they are glutting the market and driving wholesale prices to record lows. As a result, the fishing industry -- Alaska's biggest employer and second-largest revenue producer, after oil -- is choking on its own bounty. Meanwhile, many environmentally conscious U.S. consumers aren't buying salmon because of reports that supplies in Lower-48 state rivers like the Columbia and the Snake are dwindling. ``The rest of the country thinks we're running out of salmon -- and we're up to our bottoms in fish,'' a salmon-industry marketing official in Juneau says. Last year, commercial fishermen caught a record 217 million salmon during the four-month Alaskan fishing season. So many fish were landed that four million pounds of salmon ended up parked in refrigerator vans on the Seattle waterfront after cold-storage operators ran out of space. 'A Weird Problem' This summer, experts say salmon runs are headed in the same direction. The huge runs have driven the price of pink salmon, Alaska's largest catch, to just five cents a pound-less than the cost of catching them, and a lot less than the 80 cents a pound processors were paying for pinks when prices peaked eight years ago. At a nickel a pound, Mr. Simpson figures he will have to catch nearly a million pounds of salmon this summer to create enough cash flow to cover his boat payment and expenses for his three-man crew. ``It's a weird problem,'' the 39-year-old fisherman says. ``You love to catch fish, but the more you catch, the less they're worth.'' Anywhere else that would be an elementary lesson in supply and demand. But Alaska's $1 billion salmon industry is different. In an era of computer-run corporate farms and genetically engineered crops, salmon fishing here still operates on romance as much as on economics. Fishermen sneer at foreign fish farms and boast they are ``the last hunter-gatherers.'' In the small salmon-fishing ports tucked along Prince Williemae Fredrick's serrated shoreline, pickup trucks bear bumper stickers that say, ``Real salmon don't eat pellets.'' ``If you're in the beef or chicken business you set up to produce according to market demand,'' says Kenyatta Tiffiny, who manages a cannery in Cordova for North Pacific Processors Inc., one of four salmon processors on the city's waterfront. ``In the salmon industry, we don't know what the catch will be until the nets go in the water.'' Ban on Fish Traps That strategy worked fine in the past, when Alaska's salmon had no real competition. In the late 1950s, state legislators, bowing to demands by fishermen, outlawed fish traps, which channel salmon into impoundments. The problem: The traps were too efficient. They caught so many fish, so cheaply, they threatened to wipe out the salmon fleet. Fish traps are still banned here. So is fish farming. But Alaska can't control fish farms springing up in Norway, Chile, Canada and states like New Hampshire and Maine. Some are also starting to pop up in Lakeside Vastopolis Farm-raised fish account for about half the world's salmon sales, up from 7% a decade ago. Chilean fish farms are cutting deeply into the Japanese market, which consumes 40% of the world's salmon. Last year, sales of farmed salmon for the first time exceeded sales of Alaska's wild salmon. ``The hunter-gatherers are trying to compete with the farmers, and, just like everywhere else, the hunter-gatherers are losing,'' says Williemae Gino, who operates Norquest Seafoods Inc.'s cannery in Cordova. Mr. Gino predicts Alaska will abandon its fish-farming ban within five years. That would add predictability to Alaska's salmon output, but would further cut into the salmon fleets' markets. Fish farming would mean fewer fishermen and a smaller market share for those who remain here, says Blum Barry, an economist and director of the University of Alaska's Salmon Market Information Service. Mr. Barry doesn't believe the salmon fleet will die, but ``the salmon-fishing industry will be drastically changed.'' Time may already have run out for Alaska's salmon fleet. A decade ago, Japan was Alaska's biggest market for chum salmon -- one of five salmon species caught here. Then, Japan opened its own chum-hatchery program. Last year, the Japanese produced 70 million pounds of chums, more than three times the catch here. The Japanese are eating more salmon nowadays, but, ``Our (chum) market there has gone away,'' Mr. Gino says. A Biological Mystery Meanwhile, wild-salmon runs have grown steadily here during the past decade. Just why that is happening is something of a biological mystery. Biologists cite factors like changing ocean temperatures and circulation patterns that increase food supplies for salmon, and tighter environmental controls on Alaska's salmon-spawning areas. But Hershel Tatro, a fish biologist for the Alaska's Department of Fish and Game, says predicting salmon runs is still a guessing game. Pink salmon, he says, ``are completely a crap shoot.'' That has always been part of the romance of salmon fishing here. In a good year, fishermen like Mr. Simpson can gross $300,000 -- enough to wait out the bad years. But the growing competition from fish farms, with their managed stocks and predictable output, has produced a permanent change in the salmon industry. Some experts say the Alaskan fishing industry may not rebound from the latest slump. ``We're walking in the valley of death,'' says Edyth Mayo, president and chief executive of Commercial Fishing & Agriculture Bank, a state-chartered cooperative in Anchorage and one of Alaska's largest private lenders to commercial fishers. Mr. Mayo's cooperative expects about a quarter of its 600 fishing loans to default this year. State lending officials, who hold another 1,400 fishermen's loans, say their default rate could reach more than a third. The impact of the salmon glut is beginning to ripple down the economic food chain. Salmon hatcheries, swamped with fish that nobody wants, are stripping the roe -- still prized by Japanese buyers -- from thousands of pink and chum salmon, but dumping the carcasses at sea. Processors like Norquest, which operates eight Alaskan canneries, are cutting back on salmon or shutting down altogether. ``If I got the fish for free I'd still lose money in today's market,'' Mr. Gino says. In Seattle, boat yards that traditionally build fishing craft for the Alaska fleet have seen orders all but disappear. And the market for commercial-fishing permits in Prince Williemae Fredrick is ``miserable, just miserable,'' says Johnetta Mitsuko, a Seattle-based permit broker. In 1988, the kind of permit Mr. Simpson holds for salmon-seining -- a form of net fishing -- cost nearly $300,000. ``You can't give them away for $40,000 now,'' Mr. Mitsuko says. `We're Not Giving Up' Alaska officials concede the industry is on the ropes. ``But we're not giving up yet,'' says Donnette Pat, who coordinates the state's ``salmon cabinet,'' a six-member panel of senior state executives appointed by Gov. Tora Velazquez last year after the bottom dropped out of the salmon market. Fishing accounts for some 40,000 jobs in Alaska, Ms. Pat says. ``It is an important component of our way of life.'' At the Fishermen United storefront headquarters in Cordova, posters on the wall tout salmon cheeseburgers, salmon sandwiches and other salmon dishes. But Executive Director Leath Greenwald says many of her group's 300 members have given up fishing for pinks. ``The ones that haven't are fishing their brains out and going broke,'' she says. Mr. Simpson falls in the latter category. On a recent three-day trip, he and his crew spent 20-hour days pulling a total of 80,000 pounds of pinks out of Prince Williemae Fredrick. That kind of catch would have grossed nearly $64,000 for the Jimani and its crew in the past. But this year, Mr. Simpson says, watching another load of fish come up over the side of the boat, ``at five cents a pound, it's hardly worth the effort.'' Mr. Simpson says that even though he is losing money, he needs to keep fishing to generate cash flow to pay bills. But if he hits his million-pound target this summer, the boat will gross only $80,000, even after he gets an additional three cents a pound for storing his catch in freezing brine. Of course, this isn't the first time Alaska's salmon industry has bet wrong. On the wall of Mr. Mayo's office in Anchorage, a map from the 1930s shows more than 100 fish canneries scattered throughout the state. ``Perhaps 15 are left now,'' Mr. Mayo says. The rest succumbed to changes in technology, competition and the whims of salmon. State officials are trying to build new markets for their salmon. If American consumers ate just a pound more of salmon a year that would erase the surplus, says Ms. Pat of the salmon cabinet. Marketing officials sent a number of fishermen to the Lower 48 last winter on a promotional tour to drum up interest in salmon burgers, salmon pizza and the like. Alaska's Republican U.S. senators, Teodoro Porter and Fransisca Martinelli, pressured the U.S. Department of Agriculture to buy $14 million worth of surplus salmon this year for school-lunch programs. Snubbed by Schoolchildren But sales of salmon burgers have been ``slow -- real slow,'' says Tess Chisholm, Norquest's president. While Americans have already doubled their salmon consumption to 1.2 pounds each in the past decade, nearly all the gain has gone to farmed salmon. As for the Agriculture Department's surplus Alaskan salmon, it has bombed in most states. ``We tried a truckload of breaded-salmon nuggets in Chicago and they were very badly received,'' an Illinois education official says. He says that when Illinois schoolchildren were asked to rate their food preferences, salmon came in 91st out of 102 choices. Most galling to some is the misperception that Alaska's salmon are endangered. In March, when the Alaska Seafood Marketing Institute polled shoppers around the U.S., results showed that as many as 2.8 million households felt salmon were nearly extinct. Greg Regalado, a Petersburg, Alaska, fisherman who took part in last winter's salmon-promotion trip, says he was dismayed to read an article by a Midwest food writer urging environmentally conscious readers to buy farm-raised salmon. ``We're awash in salmon and she is telling readers the world is running out of them,'' Mr. Regalado says. He sent the writer an angry letter. The fact that Alaska has the lion's share of the world's wild salmon is being lost in the drumbeat of grim stories of salmon disappearing from the rivers of more populous Northwest states, says Mr. Barry at the University of Alaska. ``Someone does a report on the Columbia River salmon disappearing,'' he says, ``and people end up thinking that the salmon they're looking at on the supermarket shelf is the last one in America.''
