Wednesday, October 7, 2020

Economic Report Shows COVID Pandemic’s Impact on Value of Alaska Seafood Harvest

An economic report prepared for the Alaska Seafood Marketing Institute says that while the harvest volume was not significantly impacted by the COVID-19 pandemic that the overall impact of the virus weakened the harvest value.

Economists with the McDowell Group said that a roughly 50 percent drop in the Bristol Bay base sockeye price is a prominent example, along with lower halibut values.

McDowell Group economists also said that anecdotally flatfish and Pacific cod harvest values have declined, while Pollock prices are stable. Key reasons for weaker harvest value, they said, include higher operating costs, less value-added production, reduced demand due to foodservice closures, and general market uncertainty.

All sectors of the seafood industry have reported higher operating costs directly related to reducing the risk of the novel coronavirus from spreading to coastal fishing communities, as well as fishermen and those working in the processing sector. Interviews with processors, the report said, indicate at least $50 million has been spent so far, including inshore and offshore sectors. That total is expected to rise due to testing requirements and continuation of virus-related protocols in 2020 and 2021, the report said. Meanwhile harvesters, local governments and other stakeholders are reporting their own extra expenses directly related to maintaining operations during the pandemic.

Increased transportation costs attributable to the pandemic include the challenges of reduced passenger flights and air freight capacity this past summer, which led to challenges getting fresh salmon to markets in the Lower 48 states. Exports to China were also delayed due to increased port inspection requirements. The report also cited the bankruptcy of Ravn Airlines, which exacerbated problems associated with transporting processor workers, fishermen and support personnel in coastal communities of western Alaska.

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