By Margaret Bauman
margie@maritimepublishing.com
Seafood harvesters and processors facing challenging global marketing conditions are finding it necessary to alter their operations for long-term viability, according to Nicole Kimball, vice president of the Pacific Seafood Processors Association (PSPA).
“It’s clearly evident from announcements of seasonal closures of some shoreside processing plants this year, and from multiple facilities up for sale, that seafood processors of all sizes are trying to adapt to very challenging market conditions both globally and domestically,” said Kimball, a seafood industry veteran and member of the North Pacific Fishery Management Council.
“Both fishermen and processors have rising costs that make small margins even smaller, and processors are going to be forced to adapt operations to ensure their long-term viability,” she added.
PSPA is a non-profit trade association comprised of motherships and shore-based seafood processors across Alaska.
“There has been tremendous effort—including (by) community partners, fishermen and other industry-support businesses—to educate state and federal decision makers on the unique challenges the Alaska seafood industry is encountering now, so that we can prioritize existing state and federal resources and get meaningful support for a strong future,” she remarked.
Kimball and other commercial seafood industry colleagues in the Pacific Northwest have been working on a number of fronts. They’ve tried to improve state loan programs for harvesters, coordinate seafood industry inclusion in the pending federal (as of Sept. 26) Farm Bill and work with the Alaska congressional delegation to raise awareness of unfair trade policy and strategies. By doing so, they hope to level the playing field and reduce barriers in international trade.
Statewide Perspective
From a statewide perspective, there was good and bad news coming out of the 2024 fishing season, said Jeremy Woodrow, executive director of the Alaska Seafood Marketing Institute, a public-private partnership between the state of Alaska and the Alaska seafood industry. The institute promotes economic development of seafood caught commercially in the state’s waters.
The salmon run into Bristol Bay was good, but the fish were smaller and the volume was down. Higher prices didn’t make up for the lack of volume, data show.
“Every harvester and processor has fixed costs, but the volume and prices paid don’t make up for those fixed costs,” Woodrow said. “We are seeing demand responding a little more, but keeping supply filled may be a challenge.”
While processors weighed decisions on management and facilities, fishermen considered their own operating costs and whether to quit the season early or to venture out at all.
Trident Seafoods was among those looking into a variety of ways to cut costs.
Company Maneuvers
In June, Trident and Silver Bay Seafoods announced an agreement for Silver Bay to acquire Trident’s False Pass processing facility and fuel business. The company to date has sold three of its facilities and has one yet to sell at Kodiak, said Trident spokeswoman Alexis Telfer.
On Sept. 5, Trident Seafoods announced the appointment of Mike Quinn as chief operating officer, while also naming Jeff Welbourn president of Trident USA and Keni Nasu president of Trident Alaska. The changes took effect Oct. 1.
Ocean Beauty Seafoods announced Sept. 3 that its smoked and value-added division is being rebranded under the name Echo Falls Seafood LLC.
Ocean Beauty said it chose its top-selling retail smoked seafood brand as the new company name to establish the smoked and value-added operations as a separate stand-alone business unit, with Alex Klein as president.
The company is expected to continue to have direct access to wild Alaska seafood from its sister company, OBI Seafoods. Meanwhile, the distribution division of Ocean Beauty Seafoods will continue to retain the Ocean Beauty product brand name to manage its seafood distribution sites.
Stormy Waters
Trident, Ocean Beauty and other major processors continued to navigate the stormy economic waters with changes in management structure, the buying and selling of assets and shifts in product focus. But Northline Seafoods dove into the heady marketing competition with a revolutionary approach, freezing millions of pounds of whole salmon on the fishing grounds.
It purchased salmon in Bristol Bay’s Nushagak District aboard the new multi-million- dollar floating processor, The Hannah. Equipped with ultra-low-temperature preservation technology, she can process up to 50,000 pounds of salmon a day. More sockeyes were delivered to The Hannah from the Northline buying station, Miss Molly, also operating in Bristol Bay. The frozen fish were transported back to Bellingham, Wash. on The Hannah to await processing for customized orders.
An electric fire that broke out on The Hannah on June 30 reduced the company’s capacity for processing for two weeks before operations returned to normal.
“We will operate the Hannah in the Nushagak again,” Northline Seafoods CEO Ben Blakey said. “Next year we will have the benefit of a season’s worth of learning and improvements.”
“We get to thaw and produce products on demand. The fish will be cut to exact (specifications) the customer wants,” he added. “We can be a little more accommodating to the needs of the market. There is a high demand for fillets.”
Blakey acknowledged that customers would like larger fish and that there were quite a few smaller fish this summer in Bristol Bay, but said he was confident that their product would sell. He also credited stakeholders, ranging from fishermen to harvesters, in the industry.
“We got a lot of support from people whom we technically compete with,” he said. “We like to think we help them as well from time to time. People are always wary of new ideas, but in general the industry at large was overwhelmingly supportive of Northline’s actions,” he said.
How well Northline’s approach to processing and marketing will work out overall remains to be seen, said Gunner Knapp, professor emeritus of economics at the University of Alaska Anchorage Institute of Social and Economic Research.
“We saw with the Northline fire what can go wrong. We will find out how (Northline’s plan) works,” he said.
“A lot of companies made big decisions this last year. As always, we face a lot of what’s going to be happening with Mother Nature, and the entire world economic situation is quite confused at the moment. These
are scary times. Nothing is certain,” Knapp said.
Margaret Bauman is an Alaska journalist and photographer with an extensive background in Alaska’s industries and environmental issues related to those industries. A long-time Alaska resident, she has also covered news of national and international importance in other states on the staff of United Press International, the Associated Press, and CBS News.