FISH FACTOR: Salmon permit values rise on optimism; halibut shares sinking
Nearly all Alaska salmon permits have gone up in value since last fall and buying/selling/trading action is brisk.
“We’re as busy as we’ve ever been in the last 20 years,” said Doug Bowen of Alaska Boats and Permits in Homer. “Boat sales are doing well and between IFQs (individual fishing quota) and permit sales, we’ve got a busy year going.”
The salmon permit interest is fueled by a forecast this year of more than 213 million fish, an 85 percent increase over 2018. Also, salmon prices are expected to be higher.
For the bellwether drift permit at Bristol Bay, the value has increased from around $165,000 and sales are now being made in the low- to mid-$170,000 range.
Several good salmon seasons in a row pushed drift permits at Area M on the Alaska Peninsula to about $175,000 last fall, Bowen said “and if you can find one now, it’s going to cost you over $200,000.”
At Cook Inlet, where salmon catches have been dismal for the drift fishery, permit values bottomed out at $28,000 and have climbed a bit to $38,000.
At the salmon fishery’s peak in the late 1980s and early 1990s, Cook Inlet drift permits were traded at more than $240,000, Bowen said.
“When Alaska’s salmon industry crashed in the early 1990s due to the flood of farmed fish, those permits dropped to under $10,000 and since then have been all over the map,” he added.
The drift fleet at Prince William Sound also had one of its worst years last summer and that permit is one of the few that has gone down in value.
“They were over $150,000 and the last one we sold was at $145,000,” Bowen said.
For Prince William Sound seiners, who are expecting a good pink salmon year, the permit value is listed at $170,000, a $5,000 increase from last fall.
At Kodiak, seine permits have held steady for several years in the $28,000 range.
At Chignik, where seiners experienced the worst fishery ever last year catching just 128 sockeyes, there is little to no interest in permits.
Salmon permit action in Southeast Alaska “is kind of a mix,” said Olivia Olsen at Alaskan Quota and Permits in Petersburg.
For both buying and leasing, there’s less interest in power troll permits for a second year but prices “are holding at a respectable $27,000 to $28,000,” Olsen said.
“The permit holders have a really positive outlook for all species except kings, so they don’t understand why the price isn’t going up,” she said, adding that there is little interest in hand troll permits.
Southeast drift permit prices are up with expectations of good prices and lots of fish.
“Last year they were selling for $79,000 to the low $80s and currently prices are at $95,000. So that’s been a hot permit,” Olsen said. “They are opening new fishing areas which they feel should thin out the herd and have plenty of fish for everybody.”
Demand also is up for Southeast seine permits and the price has increased to $250,000, a boost of $25,000 since last fall.
Both Olsen and Bowen agreed that Alaska salmon permit holders are looking toward a good year.
“We’re seeing a lot of optimism pretty much across the board,” Bowen said.
Halibut quota slump
A slight increase in this year’s halibut catch and respectable dock prices haven’t done much to boost the value of IFQs.
Halibut quota shares that topped $70 per pound in some regions took a 30 percent nose dive in 2018 and have remained there ever since.
Now $63 per pound is the high for halibut IFQs in the Southeast fishing region, with most moving at the $52 to $58 range, said Olivia Olsen. In the Central Gulf of Alaska, quota is listed in the $35 to $45 per pound range, down from a high of $50 last November. The value per pound in the Western Gulf, is down by 50 percent from 2017.
“It’s advertised at $27 and selling for less,” Olsen said.
Last fall, halibut prices dropped by $2 per pound to the $5 range at the Alaska docks and boats sometimes couldn’t find buyers for their fish. The biggest hit was a flood of seven million pounds of cheaper Atlantic halibut from eastern Canada displacing Alaska’s fish in east coast markets.
But things seem to be looking up.
“This year there is an increased confidence level for halibut. There is some optimism that we’ll see better recruitment into the fishery,” said Doug Bowen, referring to strong year classes from 2011-12 that are showing up in the fishery.
“The confidence level is up a bit in halibut after last year being our slowest selling year ever for IFQs,” she said. “Buyers are interested but at last year’s prices and it seems to be working. Considering that the IFQ prices were out of whack on the high end, perhaps it’s a good adjustment.”
Herring and smelt at Upper Cook Inlet are fisheries that pay out nicely for the few who participate, and both are open to all.
Ten to 20 fishermen usually take part in the bait herring fishery that runs from April 20 to the end of May. A combined take of 150 tons can be taken from four areas by set or drift gillnets, although nearly all comes from the upper east side, said Pat Shields, commercial fisheries management coordinator for Lower and Upper Cook Inlet at the Alaska Dept. of Fish and Game office in Soldotna.
“It’s a pretty small quota but we’re not even reaching the quota of up to 40 tons on the east side,” he said, adding that all of herring goes into the bait market for halibut fishermen, either commercial or sport.
The catch might be small, but it fetches big bucks as bait.
“Currently the fishermen are selling that product for $2,000 to $3,000 a ton, or $1 to $1.50 a pound,” Shields said.
In contrast, the average price for herring caught only for their eggs at places like Sitka, Kodiak or Togiak averages 12 cents per pound.
Shields speculated the price is so high because there are so few bait herring fisheries in the state. Most Alaska fishermen purchase herring for bait from the east coast, often at about $1 per pound.
The Cook Inlet herring is frozen and sold throughout the year and Shields said demand far exceeds the supply.
Also at Upper Cook Inlet: A smelt fishery with a 200-ton limit will open from May 1 and run through June. Fewer than 20 fishermen participate in what Shields calls “one of the most interesting and challenging fisheries in the state.”
“It’s done with dip nets at the mouth of the Susitna River. People usually take a drift boat across the mudflats. That’s eight or nine miles of a muddy mess that you have to navigate with winds coming in from three different areas: Knik Arm, Turnagain Arm and Cook Inlet. Some people refer to it as a cesspool because the waters are just swirling and it’s shallow,” Shields said.
The boats come back to the Kenai River to offload their catches and the smelt is frozen, boxed up and shipped out.
“Then it gets distributed primarily along the West Coast for human consumption, where Columbia River smelt fisheries are very restricted or closed,” Shields said. “It also goes into the bait market for the sturgeon fishery and the marine aquarium market.”
Fishermen can get a nice price, twice: 25 cents to 75 cents per pound for their catch, and up to $2 per pound after it goes to market.
Estimates from 2016 peg the annual smelt run to the Susitna River at 53,000 tons but Shields said the catch remains very conservative.
“The reason for the small limit is that this is a beluga critical habitat area and this is a forage fish that is considered very important to that species,” he explained.
Both the smelt and herring fisheries are open to anyone but require special permits.
“Anytime you have an interest in what we call these smaller fun, interesting fisheries, please give us a call and we’ll do all we can to help you get involved in them,” Shields said.