FISH FACTOR: Salmon permits slide, but quota shares skyrocket
The values of Alaska salmon permits are on a downward slide, while prices for quota shares of other catches continue to skyrocket.
Despite an optimistic outlook this year for Alaska salmon catches and markets, buyers and sellers are still feeling a hangover from last year’s tough fishing season.
“If you were involved in salmon last year, you probably didn’t have a great year, unless you were in Bristol Bay. There wasn’t a lot of extra money to pick up an extra permit or move into a different fishery, and I think we’re seeing that,” said Doug Bowen of Alaska Boats and Permits in Homer.
“Overall for salmon permits it’s a slower market this year,” agreed Jeff Osborn of Dock Street brokers in Seattle.
At the bellwether sockeye salmon fishery at Bristol Bay, drift permits have slumped below $135,000 since last fall.
“We’ve had several sales at $129,000 and listings at $125,000. So, for whatever reason, those have slipped by about $10,000 in the last few weeks,” Bowen said.
Southeast drift permits have dropped slightly to the $83,000 range. Prince William Sound drift “cards” topped $165,000 but now are trading closer to $150,000. PWS seine permits also come in at the range or slightly above.
“It’s supposed to be a great year there, but we’re not seeing it reflected in those prices,” Bowen said. “They’re certainly not going up very far, very fast.”
Cook Inlet drift gillnetters have had several lousy fishing years and this year is looking bleak. However, a new rule to allow permit stacking has boosted interest in permits there.
A Cook Inlet drifter can now hold two permits in his name and fish the extra gear. It is the first drift gillnet fleet in the state to be able to do so.
“That propped up that value from a low of $33,000 and they are trading right now for around $45,000,” Bowen said, adding that the permit price is still down considerably from $90,000 just a few years ago.
The lowest value seine card is at Kodiak, reflecting a steady slide from $50,000 not long ago.
“We’ve sold a few at $25,000. That’s the lowest salmon seine permit price anywhere in the state,” Bowen said. “People can make good money there, but Kodiak is a tough salmon fishery.”
Both brokers agreed that a good salmon season this year will help buoy all boats along with the value of salmon permits. The forecast for Alaska’s 2017 salmon catch is 204 million fish, nearly one million more salmon over last year.
Quota share highs
Prices for quota shares of Alaska halibut are jaw dropping.
“They’re in the $70 per pound range in Southeast and the $60 range in the Central Gulf,” said Doug Bowen.
Quota prices are approaching the $45 mark in the Western Gulf, the $30 range for the Aleutian Islands fishery and in the teens for Bering Sea regions.
“Even small pieces of Delta class for smaller boats are trading for $51, $52 and $53 a pound. It’s just unheard of,” he added.
Halibut quota share prices have gone up about $5 per year for several years as the fish stocks appear to have stabilized and increased slightly. Dock prices for halibut also have remained high, often at $6 to $7 per pound at major ports.
The halibut quota shares are not flying off the shelves at those prices, but Bowen points to more movement in small batches.
“It’s almost a retail market for fishing quotas, where if a fella holds a fair amount, he will cut away a chunk of 1,000 pounds to be able to complete his boat projects or retire some debt,” Bowen said.
The quota share prices for one of Alaska’s most lucrative catches — black cod, or sablefish — also are on an upswing. Shares in the Central Gulf region are at $29 per pound, an increase of $8 over last year. Black cod quota in Southeast Alaska has jumped to $35 per pound.
The increase is due in part to dock prices nearing $10 per pound for large black cod over 7 pounds.
“There is a really strong grounds price, and there was an increase in the TAC (total allowable catch), which was somewhat unexpected,” said Dock Street’s Osborn. “And, of course, pots.”
Starting this year, fishermen can use large pots in the Gulf of Alaska to keep whales from robbing their pricey black cod catches. “Getting whaled” can sometimes cost a boat up to half of its catch on hook and line gear.
Nearly 2,000 fishermen hold quota shares of halibut and black cod in Alaska.
Crab quota climbs
Alaska’s Bering Sea crab fisheries also are managed under a catch share system for a pool of roughly 400 “owning entities.”
Prices have gone up on a per pound basis since the catch share system began in 2005, but during the same time, most of the crab catches have been reduced significantly.
Catch quotas for Bristol Bay red king crab are listed at $55 per pound; snow crab at $16 to $28 per pound, and Tanners at $8 to $13 per pound.
“Sales have been much more limited,” Jeff Osborn said, adding that there “certainly is a fair bit of consolidation” in the crab fisheries.
“It’s subject to the same influences as black cod and halibut,” he added. “Guys might be interested in selling, but you’re looking at a catch that’s been cut by 50 to 70 percent over the past few years, or reduced to nothing. They’re not too keen on selling when everything looks down despite the higher prices.”
Uncertainty over new rules coming for some crab quota holders also has stalled the market. Crew or skippers who own shares but do not have “active participation” in the crab fishery (or another Alaska fishery) by June 30, 2018, will not receive their quota shares for the 2018-19 season; if they do not have participation by June 30, 2019, their quota is revoked.
“In the past, once certain quota purchase requirements were fulfilled, they did not need to stay active in the fishery. That is changing,” Osborn explained. “There are a lot of guys who have participated in the fishery all their lives and are now retired.
“They are being forced to either get back in the fishery, even on a minimal basis, or they will have to sell their quota or lose it. It certainly restricts the number of people who are interested in purchasing quota shares.”
Alaska is tops on the menu
Alaska seafood now tops the list of all other protein brands on the menus of 500 national restaurant chains, besting Angus beef, Kobe beef and Louisiana seafood.
Research shows that 94 percent of diners are more likely to order a seafood dish when the word “Alaska” is on the menu.
That’s the take away message from the 2016 annual report of the Alaska Seafood Marketing Institute. The ASMI report is filled with user-friendly information about Alaska’s seafood industry and how it plays out at home and around the world.
Here’s a sampler: about 60,000 people, mostly Alaska residents, work in the state’s seafood industry. More than half (31,580) are fishermen, operating 8,600 vessels and delivering their catches to 176 processing plants around the state.
One third of Alaska’s resident commercial fishermen live in Anchorage and the Southcentral region, more than any other region of the state.
Pollock is still Alaska’s biggest catch, topping 3 billion pounds last year. Salmon came in as the most valuable catch last year, topping $540 million.
China is the number one export customer for Alaska seafood, followed by Japan, Europe, Canada and lately, Brazil.