Seafood forecasters predict rough ride
By LAINE WELCH
December 29, 2008
Here are some outlooks for the prospects and challenges facing important Alaska seafoods provided by longtime analyst Ken Talley, editor of Seafood Trend:
Wild salmon supplies will increase, especially for the lower-priced species, less so for the high end products. The big task for marketers will be to keep prices from sliding.
Farmed salmon will be less available, due in great part to financial troubles and disease problems that continue to plague the Chilean industry. Production there could fall 25%-40% after the upcoming coho and steelhead harvests. This could mean reduced exports to the U.S. market, especially if buyers are unwilling to pay higher prices. Farmed Atlantic salmon from Norway and Canada will fill some of the void.
Groundfish supplies will be down for some important volume leaders, notably, Alaska pollock harvests which will decrease from 1.2 million tons to 815,000 tons. Demand could remain so strong that producers could move away from surimi production to pricier fillets. As for cod, Talley said "the problems in this cash-intensive business have more to do with the inability to finance production and inventory than any problem with demand."
Halibut will remain at the top of the fresh market, but frozen halibut will see lower prices even with a lower catch limit, which is expected to drop about 10.6% in 2009. This should keep fresh prices at high levels as it moves away from retail and further towards white tablecloth restaurants.
"While halibut is not as affected by overseas markets as groundfish because it is predominantly a domestic product, there will be a decreased demand for higher priced fish,"speculated John Whiddon, general manager at Kodiak's Island Seafoods. "White table cloth restaurants do not and cannot absorb all the halibut, in fact, much of it is sold to large distributors, restaurant chains and club stores. These markets will most likely be very sensitive to higher priced products, so I would expect the market price to reflect the shift to more moderate valued seafood options."
At retail, Ken Talley said seafood prices have increased more than any other protein. The higher prices for all proteins will push down consumption next year, even as retail sales gather steam as consumers cook more at home. Seafood Trend predicts a 1.4% drop in U.S. per capita consumption for 2008.
Another challenge for seafood at retail is that most Americans simply don't buy much fish and shellfish. According to the Food Marketing Institute, less then 40% of U.S. shoppers buy seafood, whether fresh or frozen, more than one a month. Only 4% shop for fish and shellfish once a week. Most disturbing of all, 32% of shoppers never even look at fresh fish.
The frozen seafood case may help save the day. According to Nielsen retail tracking data, frozen seafood is becoming more popular at the local grocery store.
"And we're not just talking
breaded fish sticks," Talley said. "Sales of unbreaded
frozen fish are soaring."
Roughly 48% of consumers are eating out less frequently, and 59% have stopped buying expensive cuts of meat, which could spell trouble for high-priced seafood.
At the same time, consumers are still interested in eating healthier foods. Nearly 75% of surveyed adults try to eat healthier fare when they dine out. This leaves a nice opening for seafood, one of the healthier choices on a menu.
Most disheartening for seafood lovers, the Producer Price Index shows overall cost of fish and shellfish has jumped 7.6%, far more than food inflation overall. Fresh products gained only 6.2%; processed seafood jumped 9.4% thanks to the 14% increase in canned prices, and frozen seafood prices increased 6%. Meanwhile, beef costs have gained 6%, poultry saw prices gain 5.6%, and pork prices increased 5.2%.
Import volume of seafood showed
only a 1.4% drop in volume through October. However, that resulted
in a 5.1% increase in prices. Export volume declined even more,
with shipments down 7.2%. That, in turn, resulted in a 9.3% increase
What's the biggest bulk of fish in the Gulf? Arrowtooth flounder, which are often mistaken for 10 pound halibut.
Since the early 70's mass of arrowtooth has increased seven fold in the Gulf of Alaska and they are now the most abundant groundfish in the sea. That carpet of flatfish can out-eat all the foods shared by many other species. Fishery scientists believe the flounders are responsible for the slow growth experienced by Gulf halibut.
At current levels, scientists claim fishermen could catch a half billion pounds of arrowtooth flounder. But far less is caught in Alaska each year, fetching pennies at the docks. The problem is that there has been little buying interest in arrowtooth flounders because their flesh contains an enzyme that turns it to mush when it is cooked. But scientists have found ways to neutralize the enzyme. Also, if the fish are chilled to near zero or processed immediately and frozen, the enzyme does not break down the flesh.
Arrowtooth might attract more interest if managers approve proposed changes to the fishery that allows fishermen to retain more of certain other species in their nets along with the flounders.
"We want to reduce discards
of marketable groundfish such as flathead sole, rockfish, and
skates caught during the arrowtooth flounder fishery in the Gulf
of Alaska," said Doug Mecum, director of NOAA Fisheries
in Alaska at Juneau.