Wednesday, August 1, 2012

Economists Still Uncertain How Farmed Fish Will Affect Wild Salmon Prices

Going into the wild salmon season in Alaska, there is some concern over how farmed salmon prices will affect those of wild salmon, and fisheries economists are still waiting for more data to make a determination.
While it is entirely plausible that farmed salmon prices could cause wild salmon prices to fall, nobody will really know until a significant amount of salmon is sold, says Gunnar Knapp, an economics professor at the University of Alaska Anchorage Institute of Social and Economic Research.  Right now it’s the time of year when very high stakes negotiations are taking place between processors and buyers, with processors trying to sell as high as they can and buyers trying to buy as low as they can.  It’s all very complicated.  Knapp said some processors, concerned about a soft market for frozen headed and gutted fish, were saying they planned to put fewer fish into H&G and more into frozen fillets and canned salmon.
Other factors to consider are the size of salmon runs, the amount of Russian salmon available and exchange rates, he said.
Keith Criddle, director of the fisheries division at the University of Alaska Fairbanks, speaking from Juneau, noted that research done by his students shows clear linkages between exvessel prices for king and coho salmon from Alaska and US wholesale prices of Chilean, Canadian and Norwegian reared Atlantic salmon.
In addition, there are clear linkages between exvessel prices for sockeye salmon from Alaska and the supply of Chilean pen-reared coho and steelhead shipped into Japanese markets, he said.
Increases in Chilean or Norwegian production of Atlantic salmon primarily affect our domestic markets for king and coho, while increases in Chilean production of coho and steelhead primarily affect demand for Alaskan sockeye in the Japanese market, he said.
Now that Chilean exports have increased, they are entering a market that includes substantially larger volumes of Norwegian Atlantic salmon and in order to clear inventory the Chileans have had to reduce their asking prices.  The resulting decline in exvessel, wholesale and retail prices of Alaskan salmon in domestic markets could as reasonably be attributed to the resumption of Norwegian exports to the US as it can be attributed to expansion of Chilean exports to the US, he said.

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