Tariffs set to take toll on Alaska seafood exports and imports
More seafood tariffs in Trump’s trade war with China are hitting Alaska coming and going.
On July 6, the first 25 percent tax went into effect on more than 170 U.S. seafood products going to China. On Aug. 23 more items were added to the list, including fishmeal from Alaska.
“As of right now, nearly every species and product from Alaska is on that list of tariffs,” said Garrett Evridge, a fisheries economist with the McDowell Group.
Alaska produces more than 70,000 metric tons of fishmeal per year (about 155 million pounds), mostly from pollock trimmings, with salmon a distant second. The pollock meal is used primarily in Chinese aquaculture production, while salmon meal goes mostly to pet food makers in the U.S.
In 2017 about $70 million worth of fishmeal from Alaska pollock was exported to China from processing plants all over the state.
Anchovy-based fishmeal from Peru is the predominate source for world aquaculture, but whitefish meal made from Alaska pollock is regarded as the premium. According to Undercurrent News, pollock meal commands $600 to $700 more per ton than Peruvian meal and is currently trading at up to $2,300 per ton.
The tariffs on U.S. seafood products exported to China is a done deal. In the long run, Evridge said Alaska might be able to shift exports to other countries, but the size of the Chinese market makes it tough to replace.
“On the Chinese side, it looks like there is little recourse,” Evridge said. “At least in the short term there is little ability for the Alaska seafood industry to avert these tariffs.”
And there’s also a flip side.
Trump has proposed a 25 percent tariff on products coming into the U.S. from China. It would include seafood that is caught in Alaska, shipped to China for reprocessing into fillets, portions or fish sticks and then resent to the U.S. for distribution to buyers.
“That will possibly be the case next month when those tariffs go into effect on the U.S. side,” Evridge said.
On Aug. 20, the U.S. International Trade Commission began hearing from over 350 speakers representing a wide variety of industries harmed by Trump’s tariffs from flooring to fruit juices to fish. The commission also must review more than 2,300 letters received so far; the pile is expected to grow by the Sept. 6 public comment deadline.
“We’re kind of a pawn in a broader game,” Evridge said, adding that the Alaska Seafood Marketing Institute, Alaska’s congressional delegation and the governor’s office are “closely engaged.”
The National Fisheries Institute voiced strong opposition to the proposed new tariffs in testimony last week saying that “it will punish American fishermen and the communities that rely on them by making their products more expensive for American families to eat.”
“Of the $2.7 billion in annual seafood shipments subject to this proposal, an estimated $950 million comes from an American fisherman – primarily an Alaska fisherman – harvesting in U.S. waters in a U.S.-flag vessel using a U.S. crew,” said NFI’s Robert DeHaan.
One of the Trump Administration’s stated goals — making China respect its obligations regarding intellectual property rights — don’t line up with tariffs on seafood, DeHaan added.
“How punishing these harvesters — and these businesses for ‘Buying American’ — will convince China to respect its obligations regarding intellectual property rights and technology transfers is difficult to fathom,” he said. “Cutting fish is not an intellectual property secret.”
Last year China purchased 54 percent of Alaska’s seafood, valued at nearly $800 million.
Alaska’s statewide salmon catch is 31 percent below expectations and is unlikely to reach the preseason forecast of 147 million fish.
In what the Alaska Department of Fish and Game is calling an “unusual season” in a wrap up announcement, they said that the shortfall stems from poor pink salmon returns to Gulf of Alaska regions.
ADFG also cited unexpected run timing for sockeyes at several major regions, causing uncertainty for managers and lost harvest opportunities for fishermen. Bristol Bay’s Kvichak River saw the latest peak since 1956; more than half of the Kenai River’s late-run sockeye returned during the month of August, which has only occurred once before; and Copper River sockeye salmon returned in three distinct pulses, the third happening in mid-July.
But “it is important to maintain perspective on historical salmon harvests,” ADFG said, pointing out that the three largest Alaska salmon harvests on record occurred between 2013 and 2017.
The 2018 season has not been without bright spots, notably at Bristol Bay, which experienced the second largest sockeye salmon harvest on record of nearly 42 million fish, and the fourth consecutive season with the harvest topping 35 million sockeyes.
Norton Sound also is likely to exceed last year’s record coho salmon harvest and at Kotzebue, the chum salmon harvest will be among the top four on record.
Preliminary statewide total harvests and exvessel (dockside)values by salmon species and area will be available by mid-October.
Plans are underway to grow and sell salmon and other seafoods made directly from fish cells. San Diego-based BlueNalu says it will “disrupt current industry practices” and be a pioneer in “cellular aquaculture,” in which living cells are isolated from fish tissue, cultured in various lab media and then assembled into “great-tasting fresh and frozen seafood products.”
BlueNalu is being seeded with $4.5 million in startup money from a private venture fund called New Crop Capital whose mission is ‘funding the future of food.’
Seafood lovers around the world believe that the biggest threat to the oceans is pollution, followed by overfishing. Those are some of the top takeaways from a survey earlier this year of more than 25,000 people in 22 countries.
The survey was done by the public opinion research firm GlobeScan for the Marine Stewardship Council. The non-profit MSC led the movement starting 20 years ago towards certifying fisheries that are managed sustainably, which has become a requirement of doing business by most seafood buyers around the globe.
The study found that 72 percent of seafood consumers want sustainability verifications at their supermarkets, but price is still the biggest motivator for buying decisions. A surprising gender divide showed that men are more motivated by price while women regarded seafood sustainability as more important.
Seventy-two percent also agreed that buying seafood from sustainable sources will help save our oceans; 70 percent said people should switch their purchases to earth friendly fisheries.
Eighty-three percent of global consumers agreed that seafood needs to be protected for future generations, and 70 percent said they would like to hear more from companies about their sustainability purchasing practices.
In what the survey called “a climate of persistently low consumer trust in business globally,” trust in the blue MSC label remained high at 69 percent and understanding of the label has increased to 37 percent, up from 32 percent in 2016.
Younger consumers are even more tuned in to choosing sustainable seafood, with 41 percent of 18-34 year olds understanding what the MSC label means. That group also showed a slightly different profile, eating less seafood on average and worrying more about the effects of climate change on the oceans than their older counterparts.
Global consumers also rated certification organizations third for their contribution to protecting the oceans, after NGOs and scientists. Governments and large companies rated as contributing the least.
Big names in fisheries are inviting the public to participate at a special town hall event on August 31 at the Centennial Hall Convention Center in Juneau. Keynote is retired Navy Rear Admiral Timothy Gallaudet, an American oceanographer who currently serves as the Assistant Secretary of Commerce for Oceans and Atmosphere within the U.S. Department of Commerce. Gallaudet will discuss the DOC’s Strategic Plan and NOAA’s Blue Economy priorities.
Joining him in a roundtable discussion is David Wetherell, director of the North Pacific Fishery Management Council; Nicole Kimball, vice president of operations for the Pacific Seafood Processors Association; Alexa Tonkovich, director of the Alaska Seafood Marketing Institute; Frances Leach, director of United Fishermen of Alaska; Rich Yamada, president of the Alaska Charter Association; Stephanie Madsen, director of the At-sea Processors Association; Chad See, director of the Freezer Longline Coalition; Ben Stevens, tribal advocate for the Tanana Chiefs Conference; Mark Fina, policy analyst for U.S. Seafoods; Jamie Goen, director of Alaska Bering Sea Crabbers; Paddy O’Donnell, president of Alaska Whitefish Trawlers; Brett Veerhusen, alternate director of the North Pacific Fisheries Association, Chris Woodley, director of the Groundfish Forum and Linda Behnken, director of the Alaska Longline Fishermen’s Association.
The group will take questions from the public. Doors open at 3:30. Contact is Kevin Wheeler at [email protected] or 202-482-5096.
Aug. 31 also is the deadline to submit videos to the worldwide Women in Seafood competition. Videos must be no longer than four minutes and will be judged in two categories: Under 25 which highlights futures for young women in the seafood industry, and Women’s Contributions from a social and/or economic perspective. Winners will receive 1,000 Euros (US $1,162) and their films will be shown to global audiences. Send videos to [email protected] or [email protected]. Winners will be announced in late September.