A new spring sockeye market analysis says prices should be up somewhat, due to a smaller forecast and improving market conditions for Alaska red salmon producers, relative to last spring.
Still, don’t expect those prices will jump back up to pre-2015 levels this year, says the report from the McDowell Group, which prepared the report for the Bristol Bay Regional Seafood Development Association.
Fishermen should have tempered expectations about sockeye market conditions heading into this season, the report said. While the loss of production in Chile, a weaker U.S. dollar against the Japanese yen and the euro, and an anticipated smaller sockeye supply will improve pricing prospects most market factors are still far rom levels that produced high sockeye prices just a few years ago, the report said.
Average domestic retail prices for red salon fillets fell 9 percent to $9.98 a pound between May 2015 and April 2016, with much of that decline in retail pricing driven by an expansion of discounts and promotions.
The volume of sockeye fillets sold at retail for a discount increased 18 percent during that period, and prices of discounted sockeye fillets fell $1.20 a pound.
The average price of undiscounted product declined by 79 cents a pound for the same period. Some stores have, however, likely kept everyday prices constant, while choosing to offer more frequent and/or steeper discounts on sockeye fillets- a strategy that still results in a lower average retail price, the report said.
Cash flow was a major consideration for processors entering last year, noted economists with the Juneau-based research and development firm.
Increasing sales revenue and lower ex-vessel payments improved processors’ financial position, but the processing sector is still recovering from two poor years, 2014-2015, economists said.
The bulk of supply and inventory factors also support an outlook for higher sockeye prices this year, with the exception of canned salmon inventory.
The analysis notes that Bristol Bay’s sockeye forecast is down 27 percent from a year ago, while sockeye forecasts in other parts of Alaska suggest a combined harvest similar to last year. Meanwhile sockeye fisheries in Russia’s Kuril Islands, Canada and the Pacific Northwest are likely to be closed this year.
Another contributing factor is Atlantic salon production’s anticipated decline by 6 percent this year, and Chilean coho production is expected to decline by 24 percent, primarily due to a deadly algal bloom that killed over 20 million salmon in Chile.
Frozen sockeye inventories reportedly are minimal compared to the last couple of years, while larger canned sockeye inventories persist, economists said.
The analysis found that wholesale prices for frozen flesh products were steady to higher late last year, halting a downward trend extending back to late 2013. Prices of farmed Atlantic salmon have jumped in recent months, due to culling in Chile after the algae-related die off.
The 46-page Sockeye Market Analysis, released on June 12, is online at www.bbrsda.com/reports.