Alaska Seafood Processors Still Cutting Back, Despite Government Buys of Canned Salmon

Canned salmon. File photo by Mark Nero.

Federal government solicitations for canned salmon bids are boosting spirits a bit in Alaska’s commercial fisheries industry, but the overall gloom that has driven the selloff of some processing facilities and announce cutbacks on 2024 fishing season processing prevails.

Last year, the U.S. Department of Agriculture purchased over $200 million in Alaska seafood and the current solicitation for canned pink and sockeye salmon helps clean up inventory of the sockeyes, Bruce Schactler, food aid program and development director for the Alaska Seafood Marketing Institute, said Feb. 19.

“It will pretty much put a big dent in inventory,” he remarked.

Meanwhile three major processors – Trident Seafoods, OBI Seafoods and Peter Pan Seafoods – had announced plans for selling off some facilities and cutbacks on processing for upcoming 2024 fisheries, but were tight-lipped on their concerns and overall processing and reorganization plans.

A long-time industry insider, speaking on condition of anonymity, contends that none of the current market conditions should have come as a surprise to observers of the seafood processing industry.

Trident Seafoods, for example, is selling stuff that it should have already sold, and its decision to do so now is a good move, the insider said, while decisions to shutter facilities at Ketchikan during an even year for pink salmon also makes sense, because there won’t be enough humpies harvested there to justify opening that plant in 2024.

The current dismal economic condition of the seafood economy in Alaska is just part of the overall traditional boom and bust economy, the Alaska seafood industry veteran told Fishermen’s News.

During the height of the COVID-19 pandemic, harvests and retail sales in Alaska seafood continued to rise, and Bristol Bay harvests hit a high as retail demand for sockeye salmon heightened. Then the pandemic impact on seafood sales dropped and there was all that inventory that just wasn’t worth as much as it used to command.

Processors had sold their product at a high price and retailers who bought it had to sell at a high price or lose money. Some retailers still have a lot of that frozen product in inventory.

In Alaska’s boom and bust seafood economy, every time there is a boom people don’t think there will be a bust, so when the boom lasted for several years and then fell hard, many did not expect it, but that’s just how the market operates, the observer said.

There’s still a lot of inventory out there that has to work its way through the market, with processors producing value added retail products just now getting into 2023 fish, which is so much cheaper than what they paid for fish in 2022, he said.