NOAA Fisheries economists say the fishing industry in Alaska suffered a $1.8 billion loss in 2022 and 2023, and that the state’s commercial fisheries overall saw a 50% decline in profitability from 2021 through 2023.
“The Alaska seafood industry is a major contributor to the U.S. seafood sector,” Robert Foy, director of the Alaska Fisheries Science Center (AFSC), said in a report released Oct. 9. “The social and economic ramifications of Alaska’s losses have reverberated down the West Coast and across the country.”
The downturn resulted in the loss of over 38,000 jobs nationwide and a $4.3 billion loss in total domestic value of all goods and services produced. Alaska, California, Oregon and Washington were the states most affected, showing a loss of $191 million in state and local tax revenues.
AFSC economist Steve Kasperski noted that commercial fisheries flourished in Alaska for generations, shaping social structures, cultural identity and robust local economies.
“Beyond the economic impacts, the decline of fisheries in the region threatens a way of life, sense of place, community and identity,” he said.
The economic impact on fisheries in 2023 prompted the seafood industry to ask NOAA Fisheries to undertake an independent analysis into the data behind the pressure on fishermen, seafood workers and communities.
The agency set about gathering data from fishing boats, processors and international trade databases for federal and state fisheries in Alaska and by interviewing those in the industry, fishing associations, dependent businesses and community members.
NOAA Fisheries personnel also considered trade articles, news stories and reports about Alaska to produce what’s called the Alaska Seafood Snapshot for 2023.
Economists found that starting in 2022, the industry experienced higher costs associated with increased wages while facing both higher energy prices and interest rates. Revenue fell in 2023 due to declining prices for every major species group, they said.
They also found changes in post-pandemic years in retail operational strategies and consumer seafood purchases, with retailers altering how they handle the seasonal influx of seafood products.
Historically retailers lowered prices to clear inventory, but retail demand for seafood was strong during the pandemic as people ate more at home, followed by a dramatic decline in demand as restaurants and schools opened up again. That left retailers saddled with high-priced inventory and lower demand.
Economists found retailers transitioned to keeping supply lower by slowly moving inventory out of cold storage. This meant the seafood supply was lower in the market, keeping prices higher, allowing retailers to stay afloat. But it also resulted in seafood producers, processors and wholesalers in Alaska demanding a lower quantity of seafood.
While seafood prices softened somewhat this year, it was not enough to lure consumers to purchase the amounts they bought in 2020 and 2021.
International competition, including that from several Russian fisheries, also posed challenges. NOAA economists noted that the Marine Stewardship Council certified Russian fish using the trade name “Alaska pollock” in marketing, giving domestic fisheries less of an edge in global markets.
Russian fish also had lower labor and operating costs in production and processing, resulting in lower environmental and labor standards, hurting the competitive edge of genuine Alaska pollock.
Further competition came from international trade barriers, the strengthened U.S. dollar, inflationary prices that impacted consumer demand for higher priced seafood and declines in seafood processing jobs and plant closures in the U.S.
These issues collectively contributed to a 32% decline in vessel revenues from 2022 to 2023, a total of $617 million. First wholesale values dropped 26% or $1.2 billion, bringing the total direct loss to $1.8 billion.
Kasperski said NOAA also looked at regional trends across Alaska.
A decade of ecological and economic challenges in the Gulf of Alaska have resulted in declining participation and an undermining of the economic status and social well-being of fishing communities.
The Bering Sea experienced different, but similarly scaled ecological changes over the last decade. NOAA researchers noted that the total number of active commercial fishing vessels declined by 29 from 2003 through 2023 in the Bering Sea and Aleutian Islands, and the number of active seafood processors fell by 32%.
Meanwhile in the Gulf of Alaska, those numbers declined by 20% and 7%, respectively.
Climate change also played a role in the economic impact on fishing communities.
A marine heatwave in 2017-18 led to the crash of the lucrative snow crab fishery in 2022 and coincided with Bristol Bay red king crab fishery closures from 2021 to 2023. The economic impact of the closures was particularly devastating to the community of St. Paul, which is largely dependent on a big shoreside seafood processing facility; 60% of the community’s budget was lost.
The future of the seafood industry in Alaska is still clouded by warming ocean conditions associated with climate change, as the industry itself and associated communities work to remain resilient.
Margaret Bauman can be reached at: margie@maritimepublishing.com