Report: Cook Inlet commercial salmon worth $350M in 2011


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How much is the salmon coming out of Cook Inlet worth?

According to a recent report produced for the Alaska Salmon Alliance, the fishery had a $54 million ex-vessel, or dockside, value in 2011, and $102 million in direct value to the region.

The analysis was done by Northern Economics, and examines commercial fishing economic impacts on the Kenai Peninsula, and throughout the state.

Alaska Salmon Alliance Executive Director Arni Thomson said the Cook Inlet salmon fishery’s overall economic impact to the region was estimated at $350 million.

That dollar figure, which Northern Economics arrived at using multipliers it developed in 2011 for the Marine Conservation Alliance, includes things like fuel purchases, maintenance done locally, accountants hired by fishing operations and other related economic activity that stems from fishing.

“It’s a big industry,” Thomson said.

From 1985 to 2011, the accumulated harvest value in 2012 dollars was $2.15 billion.

The alliance commissioned the report because it was largely unknown what the industry did for the region, beyond a sense that it was a significant player.

Economic reports existed for sportfishing, for commercial fishing in other regions, and for other industries, but no one had looked at Cook Inlet commercial salmon fishing.

“We just had no idea what the value of this industry is,” Thomson said.

According to the report, the Cook Inlet salmon fishery is the fourth-largest salmon fishery in the state, after Southeast Alaska, Bristol Bay and Prince William Sound. The ex-vessel value is more than all Outside salmon fisheries combined, which come in at a harvest value of $53.5 million.

The Cook Inlet value includes the setnet and drift net fleets, as well as the purse seine and hatchery cost recovery fisheries, but most of the report focused on the set and drift fleets.

Add in other fishing sectors and their economic impacts — like sport, personal use and charter operations — and fishing has an even greater impact on the Peninsula.

“If you put us all together, we’re a pretty big industry for the whole region,” Thomson said.

The fishery acts as an economic engine in several ways through direct and indirect job creation.

“The payroll is really outstanding,” Thomson said.

According to the report, the setnet and drift net fleets had a combined labor income of about $31.3 million. Employees at processors earned another approximately $33.3 million, although that figure could include a small portion of non-seafood food manufacturing wages, due to how the Alaska Department of Labor and Workforce Development tracks data, the report said.

The salmon fishery created 3,600 harvesting and 1,617 processing jobs in 2011, mostly seasonal. That compares to 2,748 year-round jobs for primary oil and gas companies and support service businesses in 2010, and a $119 million payroll for oil and gas jobs located in Kenai Peninsula Borough that same year, according to a report by McDowell Group, Inc. prepared for the Alaska Oil and Gas Association.

The salmon report cites an Alaska Department of Labor and Workforce Development figure that 1.82 crew jobs are generated per drift permit, and 3.76 crew jobs per setnet permit, not including the permit holder.

But the fishery impacts reach further than direct job creation.

Generally, about 60 percent of the landed ex-vessel revenue from drift and setnet fisheries is paid as labor income. The remaining 40 percent goes to other expenses, like food, fuel, maintenance and local support services, Thomson said.

Cook Inlet fisheries as a whole have a $212 million first wholesale export value, which includes groundfish, halibut and other species in the total.

Cook Inlet fisheries are fairly unique in that they’re connected to the road system. Whereas in other major Alaskan fisheries, like Bristol Bay or Kodiak, fish processors must send their product out by boat or plane, Cook Inlet salmon can travel via truck.

Thomson noted that much of the first wholesale value comes from fresh fish products that are shipped Outside, with transportation time of around 60 hours.

Another noteworthy factor is that the Cook Inlet salmon fishery has a much higher proportion of resident fishermen than other fisheries, Thomson said.

The Cook Inlet fleet is comprised largely of small, family owned operations, Thomson said, most of which are run by Alaskans.

Thomson said an Alaska Department of Fish and Game management report estimated that 84 percent of the setnet permits and 72 percent of the drift permits were held by Alaskans, a higher proportion than in other fisheries in the state.

Generally, it’s assumed that resident fishermen return a larger portion of their income to the local economy.

The Cook Inlet salmon fishery is one piece of a vibrant local fishing industry, Thomson said.

“The processors here essentially develop a portfolio of fisheries,” he said.

Salmon anchors that portfolio. In 2011, Cook Inlet processors purchased $55.35 million worth of salmon, which was 46 percent of their purchases by value.

More than half of the salmon, or $35.73 million worth, was from Cook Inlet. Processors also buy salmon from Prince William Sound, and this year, are buying from the Yukon River.

The area processors buy other species as well, including halibut, sablefish, cod and groundfish to boost their activity.

“Salmon is the mainstay,” and pays for overhead and other costs, Thomson said. The additional species round out the operations, Thomson said.

Likewise, permit holders and crew are also active in other fisheries. According to the report, 149 of 976 active Cook Inlet set and drift permit holders participated in other fisheries as permit holders, generating almost $30 million in ex-vessel revenue.

The data helps detail what the commercial salmon fishery means to the region.

It looked at 2011 data in part because the 2012 information was so incomplete. That summer, setnetters were largely shut down to conserve Kenai River kings.

In the future, the study could help determine what a shutdown means to the area.

When the Cook Inlet fishery received a federal disaster declaration last fall, there was some difficulty in estimating the economic damages, and the number had to be revised upward at one point. In the future, state and federal officials could look at this study to get a better understanding about the reach of the fishery, Thomson said.

Thomson said the data helps define the commercial salmon fishery, but there’s also a need to consider all sectors as part of the same whole.

“We need to start thinking of ourselves more as an industry in total, rather than just one sector,” he said.

Molly Dischner can be reached at molly.dischner@alaskajournal.com.

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