Wednesday, November 18, 2020

Pandemic Mitigation Could Prove Be More Challenging in 2021

A global pandemic still raging across Alaska, Washington state and the rest of the country cost the seafood industry millions of dollars in increased operating costs in 2020. Now the industry is working to turn this situation into unique opportunity for a long-term increase in consumption of Alaska caught seafood.

That was part of the message that Dan Lesh, of McKinley Research Group (formerly the McDowell Group) delivered to the Alaska Seafood Marketing Institute’s virtual All Hands On Deck session this past week.

The industry as a whole currently provides some 60,000 jobs with $1.7 billion in earnings, including economic activity and tax revenue in rural Alaska, with over 9,000 vessels and over 200 small and large shoreside and at-sea processing plants, Lesh said.

During 2019, about two-thirds of Alaska’s seafood by value was exported to 107 countries. Exports to China have been down 38 percent since 2017, while exports to Europe are up and there has been growth in domestic markets.

The spread of the novel coronavirus, COVID-19, had a dramatic and costly impact on Alaska fisheries in 2020. Processors spend some $50 million to $60 million on additional operating costs to keep their employees and the communities they work in safe, including testing, hotels, security, plant modifications, protective gear, medical supplies and charter flights.

Some 8,700 skippers in the harvesting sector also had to adopt to complying with state and local mandates, which Lesh said provided especially disruptive to halibut and sablefish seasons.

Processors had to adapt also to changing markets, including a sharp decline in demand for seafood from restaurants and food service operations, including those at public schools, colleges and universities who had to close down much of their service due to the pandemic. Grocery sales of seafood rose 15 percent during the summer, as people cooked much more frequently at home, while food service sales were down 29 percent, Lesh said. While foodservice sales recovered significantly in August, they were still down a quarter at full-service restaurants, which have adapted with more take out, drive through, delivery and other changes, he said.

For Alaska Pollock fisheries, the A season was business as usual, but the B season saw slower fishing and smaller fish, with the supply shortfall keeping prices up.

Bristol Bay had a very healthy salmon harvest, particularly compared to Chignik, Cordova, Petersburg, Ketchikan and the Arctic-Yukon-Kuskokwim region, but the base price for Bristol Bay sockeye to harvesters was down 50 percent.

The volume and value of Pacific cod also declined. Prices were also down for halibut harvesters, whose season opened just when the pandemic hit Alaska. Sablefish harvesters saw their total allowable catch go up, but export prices fell over 10 percent and sales were impacted in markets reliant on restaurants.

On the bright side, harvesters of snow crab also saw an increase in allowable catch and found markets strong, and Dungeness harvests were also very strong.

Check the ASMI website, for complete reports and presentations from All Hands On Deck.

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