$1.2 billion of output from Southcentral fishing

Photo/Rashah McChesney/Peninsula Clarion

Seafood employs more people in Southcentral than mining in the entire state, pays out more in Anchorage than building construction, and has enough management and logistics infrastructure in Anchorage to potentially rival that of Seattle, according to a new report and Alaska Department of Labor and Workforce statistics.

Juneau-based economics firm McDowell Group released a report on the economic impacts of the Alaska seafood industry on the Southcentral Alaska region on June 10.

The Alaska Salmon Alliance, a commercial fishermen organization, commissioned the study. Arni Thomson, the ASA executive director, said he wanted the study to combat the misconception that fishing is reserved for the more far-flung areas of the state.

“So many in the region are focused on oil, gas, mining and construction to make a living,” wrote Thomson in an email. “They completely overlook the economic significance of our hidden seafood industry in Southcentral Alaska.”

According to the report, the seafood industry is a major engine for Southcentral Alaska, with 2,168 active commercial fishing permits, 35 processing plants, and three salmon hatcheries working to produce $1.2 billion of total economic output for the region.

Of the total, $685 million came from first wholesale value of seafood products, and $501 million came from gross value added through secondary impacts.

Secondary impacts include transportation, retail, fuel services, storage, boat building, materials, and fisheries management.

The report was meant to provide a highly detailed look at Southcentral’s fishing industry, including city-by-city analyses and in-depth examinations of secondary industries, said Andy Wink, the lead researcher at McDowell Group for the project.

“We took a much deeper dive into it,” Wink said. “We profiled the impact at a local and subarea level: What does it mean for Anchorage, Kenai, Homer, Valdez, Cordova. We really tried to draw the connection between what the industry does in terms of how many they’re catching, where they’re living, where they fish, the processors, and the support sectors.”

Among other deviations from typical fisheries studies, McDowell’s report also uses both ex-vessel price and first wholesale price to examine economic impacts.

Ex-vessel price is what fishermen are paid at the dock for unprocessed fish. First wholesale is the price at which processors will sell their final products. According to Wink, this gives a more precise view of how, and in what quantity, fish money flows through the economy.

The seafood industry makes up 3 percent of Southcentral’s total labor earnings, more than mining or manufacturing. Even if processing and secondary jobs are ignored, the Southcentral fishing industry employs 37 percent more people than the entire statewide mining industry, according to statistics compiled by the Alaska Department of Labor and Workforce Development.

“There is a misperception that commercial fishing in Alaska, including (Southcentral) Alaska, is dominated by Outside interests and large foreign-owned corporations,” said Thomson. “The opposite is the case with (Southcentral) Alaska resident commercial fishermen and most of the seafood processing companies.”

The seafood industry directly employed 10,840 people in Southcentral Alaska during 2013. This includes resident commercial fishermen and processing workers, hatchery employees, and commercial fisheries management-related staff who together commanded a total labor income of $247 million. When considering secondary impact jobs, the number jumps to $411 million.

McDowell economists used “equivalent” measurements for the number of full-time jobs created by the industry, as commercial fishing employment is highly seasonal. Southcentral skippers and crew employed the equivalent of 3,280 full time private sector jobs, an estimated $162 million in earnings in 2013.

The processing sector employed 4,590 workers, the equivalent of 1,240 full time private sector jobs, who earned $61 million altogether.

The impact expands as it grows beyond skippers and crew. As with other resource extraction industries, more money comes from value-added products and support services than the resource itself; $252 million came directly from the ex-vessel value of Southcentral fisheries, $432 million came from value-added products by processors, and $501 million came from secondary economic output.

The study also found that Southcentral fishermen are fairly diversified in terms of areas fished. Fishermen derived 57 percent of their gross ex-vessel value from fisheries within the Southcentral region and 43 percent from fisheries outside the region, either in other state-managed fisheries or in federally-managed fisheries.

State-managed salmon fisheries, both in and out of the Southcentral region, account for 67 percent of fishermen’s gross ex-vessel earnings. Federally controlled halibut, black cod, and crab quota account for 16 percent, 10 percent, and 4 percent, respectively.

Because it is the main state-controlled fishery, salmon is by far the most important species for Southcentral fishermen. In 2013, salmon accounted for 85 percent of the Southcentral total first wholesale value of $685 million.

Pink and sockeye salmon are the most important species. Pink salmon was worth 51 percent of first wholesale value at $346.7 million. Sockeye salmon was 25 percent of first wholesale value at $173.5 million. The two most important areas for each fishery, respectively, are Prince William Sound and Cook Inlet.

The report focuses heavily on effects to the Anchorage/Mat-Su area, which has an atypically distant relationship with the fishing industry, with no shore-based seafood landings, limited harbor facilities, and little processing activity.

“I have come to realize that most residents in the region think that when you talk about the fishing industry, you are talking about Southeast Alaska, Kodiak, Bristol Bay and the high volume Bering Sea offshore pollock, flatfish and crab fisheries, and that the Kenai Peninsula and Prince William Sound fisheries are a cottage industry with no links to Anchorage and the Mat-Su,” Thomson said.

McDowell’s report reveals this as a misconception. The state’s largest metropolitan area has a large proportion of permit holders, crew, support services, and fisheries management bodies, which Wink said makes the area comparable to Seattle in terms of potential involvement in North Pacific fisheries.

All told, commercial fishermen and processors in the Anchorage area held $228 million worth of assets in 2013, including commercial permits, quota, and processing facilities. 

McDowell estimates the fishing industry employs roughly 2,900 people in the municipal area. As a result, the industry generates $149 million in labor income for direct and secondary seafood jobs for the Anchorage and Mat-Su areas, roughly equivalent to the labor income derived from building construction in the same area.

Despite the absence of a fishing port, the Anchorage/Mat-Su area employs more fishermen than any other area of Southcentral Alaska. A total of 2,223 resident fishermen live Anchorage or Mat-Su, followed by the Kenai region with 1,204 and Homer with 1,086.

Aside from fishermen, the Anchorage area makes full use of its logistics and managerial infrastructure to support the seafood industry.

“It is also important for the resident populace to know that many of the small service and supply companies that provide products and services for the oil and gas and construction industry also depend on being providers for the commercial fishing industry,” said Thomson. “We are a significant part of their livelihoods and the report clearly shows this.”

As a key transportation hub, the seafood industry uses Anchorage as its primary stopover destination in between source and market, whether foreign or local. In 2013, Alaska Airlines alone shipped 24.5 million pounds of seafood to domestic U.S. markets. Anchorage port facilities shipped 168 million pounds, mostly destined for processing and/or reshipment in Seattle.

The seafood cargo cuts shipping costs. Most material in the Port of Anchorage is northbound. Alaska seafood is referred to as “backhaul,” which can offset northward shipping costs by sending something valuable back instead of empty shipping containers. McDowell estimates that the backhaul of seafood out of the Port of Anchorage cuts shipping costs enough to save each Alaska household $70 a year.

The Anchorage area also hosts the headquarters and satellite offices of various fishery management groups. State and federal management bodies including the Alaska Department of Fish and Game, North Pacific Fishery Management Council, and National Marine Fisheries Service employ 210 people and pay out more than $14 million in labor income.

Community Development Quota groups, or CDQ groups, employed 90 people and paid $7.9 million in labor income to Anchorage staff in 2013.

The CDQ program gives 10 percent of Bering Sea harvest to 65 Western Alaska villages within 50 miles of the coast.

DJ Summers can be reached at [email protected].

11/20/2016 - 4:42pm