Report portrays mixed picture of Alaska’s huge seafood industry

By Yereth Rosen, Alaska Beacon - April 26, 2024
Low clouds hang over Kodiak's St. Paul Harbor on Oct. 3, 2022. (Photo by Yereth Rosen/Alaska Beacon)
Low clouds hang over Kodiak’s St. Paul Harbor on Oct. 3, 2022. Kodiak is a hub for commercial fishing, an industry with an economic impact in Alaska of $6 billion a year in 2021 and 2022, according to a new report commissioned by the Alaska Seafood Marketing Institute. (Photo by Yereth Rosen/Alaska Beacon)

Size is a strength, and the economic value of the industry rose in 2021 and 2022, but employment is declining and recent price collapses are worrisome, the report says

The Alaska seafood industry remains an economic juggernaut, but it is under strain from forces outside of the state’s control, according to a new report commissioned by the state’s seafood marketing agency.

The report from the McKinley Research Group, titled The Economic Value of Alaska’s Seafood Industry, is the latest in a periodic series commissioned by the Alaska Seafood Marketing Institute.

The total economic value of the Alaska seafood industry in 2021 and 2022 was $6 billion, slightly more than the $5.6 billion tallied in 2019, the last full year prior to the COVID-19 pandemic, according to the new report and the previous version published in 2022.

Along with that good news, the McKinley Research Group’s report contains a warning about the industry’s economic future.

A price collapse in 2023 bodes ill for the industry, the report said. While the dollar and employment totals did not use 2023 data, the report included specific information about one of the main fisheries affected.

For sockeye salmon, prices paid to fishers delivering their catches were, on average, less than half of what they were paid in 2022, the report said. That price — called the ex-vessel price — averaged 65 cents last year. It was the lowest nominal price since 2004 “and among the lowest prices on record when adjusted for inflation,” the report said.

The reasons for the price collapses were multiple, the report said.

Because of inflation, consumer demand dropped, notably in the United States, where it fell below pre-pandemic levels. A strong dollar and weak yen made Alaska seafood prices less competitive in Japan, a key market, the report said. There was a large amount of 2022 harvested fish leftover as inventory, making wholesalers and retailers less inclined to buy fish in 2023, the report said. And the global supply of key species like pink salmon and pollock increased dramatically, notably from Russia but also in Alaska, the report said.

The report contains some mixed statistics on markets.

Alaska supplied 60% of U.S.-produced seafood, based on the 2021 and 2022 data, and if it were an independent nation, it would rank No. 9 as a global supplier of wild seafood, the report said. Yet Alaska provided only 1.8% of the global supply, on average, during those years.

While Alaska’s wild salmon and crab are considered premium products, fish from Alaska accounted for only 9% of the world salmon market and 9% of the world crab market, the report said. Competition from farmed salmon and wild Russian salmon dominates that market, according to the report. Much of the world market for crab is claimed by king crab from Russia – the world’s top king crab producer – and snow crab from Canada. The global crab market was affected by Alaska harvest closures, the report noted. Those closures were triggered by stock crashes in the Bering Sea.

For Alaska seafood in total, the U.S. domestic market was the top consumer destination, accounting for about $2 billion worth of product annually, the report said. The second-biggest market as of 2021 and 2022 was Japan, which took in $650 million worth of Alaska seafood annually, the report said.

Alaska halibut is advertised at Ivar's Pier 54 Fish Bar in Seattle on Oct. 24, 2023. (Photo by Yereth Rosen/Alaska Beacon)
 Alaska halibut is advertised at Ivar’s Pier 54 Fish Bar in Seattle on Oct. 24, 2023. The U.S. domestic market is the top destination for Alaska seafood. But U.S. demand for seafood dropped in 2023. (Photo by Yereth Rosen/Alaska Beacon) 

Salmon accounted for 40% of the value of commercially harvested seafood, while pollock was the top-quantity fish, accounting for 59% of the harvested volume in 2021 and 2022, the report said.

The seafood industry, between harvesters, processors and managers, accounted for 48,000 jobs on average in 2021 and 2022, equivalent to 29,100 full-time positions, the report said. That is a reduction from the 62,200 total jobs in 2019, the equivalent of 37,400 full-time positions.

The industry’s economic performance varied by region.

Total employment in all regions of the state was down from 2019 levels, the new report said, but one region was particularly hard-hit: the Arctic-Yukon-Kuskokwim region, where Western Alaska salmon runs have been faltering and some harvests have closed.

In 2021 and 2021, there were 1,100 people employed in commercial fisheries across that wide swath of Alaska, working the equivalent of 300 full-time jobs, the report said. In 2019, there were 3,100 people working in commercial fishing in that region, amounting to an equivalent of 1,300 full-time jobs, the previous report said.

Jeremy Woodrow, ASMI’s executive director, emphasized the positive signs in this year’s report.

“The brand of Alaska Seafood is cherished among consumers. The variety and superior quality of products Alaska has to offer is unmatched. Research shows that consumers strongly prefer wild seafood to farmed, they want to add more sustainable seafood to their routines, and they place a high value on the health benefits of seafood,” Woodrow said in a statement. “Alaska has the most passionate fleet behind this industry and we will weather this storm together and come out stronger on the other side.”

To address the looming problems, the Alaska Legislature is calling for a special task force to be created and, by Jan. 21, 2025, produce recommendations for action.

The task force concept is detailed in a measure, Senate Concurrent Resolution 10. It passed the Senate without opposition on April 19, and on Thursday, it cleared its first House committee, the House Special Committee on Fisheries, also without opposition.

At that committee hearing, a representative of a region of the state heavily dependent on commercial fisheries expressed strong support for the task force plan.

Ernie Weiss, natural resources director for Aleutians East Borough, testified from Anchorage about the hardships the residents there are enduring.

“Fisheries and communities in our region are in an unprecedented crisis. Fishermen are losing markets, in some cases not being paid for last year’s catch, and processing plants (are) closing or for sale,” he said.

He mentioned the closure of the seafood plant in the fishing community of King Cove.

“The current plant closing is devastating for this community, a community known for its resilience. But this is stretching the bounds of what is possible for the people of King Cove,” he said.

It is the first closure of the King Cove plant in more than a century of operation other than a closure made necessary by a 1976 fire that destroyed the facility, Weiss said. At that time, local fishers made do by for a while by delivering their fish elsewhere, and the King Cove plant was rebuilt relatively quickly, he said. This time, the outcome is uncertain.

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