The farming of salmon on land – from egg to market-size fish – is becoming increasingly feasible and reliable, according to Kontali Lead Salmonids Analyst Lars Daniel Garshol.
Garshol said Kontali is becoming “more and more optimistic” about the land-based salmon-farming sector given the number of production facilities and large-scale operations that will soon come onstream.
“This is an important stepping stone from representing only a fractional share of the total supply to being able to adequately supply the global deficit of Atlantic salmon,” he said. “It’s about the number of players who are able or in a position to generate this growth. This will accelerate and increase the focus for land-based [farming].”
Garshol said Kontali, a Norwegian analysis firm, has long considered land-based farming as a much-needed source of extra salmon production. What necessitated this form of farming was a stagnation of the traditional coastal net-pen sector due to fish health and welfare issues.
Norway’s recent imposition of an aquaculture resource tax and other policies that have limited the creation of additional capacity in conventional sea-cage farming have inflated that opportunity, and with the “super profits” posted by salmon-producing companies in recent years, Garshol said there are strong incentives for land-based salmon farm development. Sustained high salmon prices are further evidence of an industry that’s not able to deliver enough product, he said.
“The market opportunity for salmon is there for all to take. It’s about the ability to produce and grow, and for those who are able to do that, the signal from the market is, ‘Yes, we want more.’ The challenge for the industry, then, is to produce more,” Garshol said in a Kontali Seafood Explained webinar on 20 March.
A key metric to watch regarding the shift to land-based production is the number of land-based farms able to produce over 2,000 metric tons (MT) of product annually, Garshol said. To-date, this has only been achieved once – in 2022, when a single recirculating aquaculture system (RAS) facility harvested 2,253 MT of head-on gutted (HOG) salmon. No individual plants produced over 2,000 MT in 2023, but Garshol said Kontali predicts this year that two facilities will achieve these volumes; it also estimates that in 2025, four will harvest over 2,000 MT, and two will harvest more than 5,000 MT.
Total production from this form of farming in 2024 will total around 40,000 MT – doubling 2023’s volume – and will get near 50,000 MT in 2025. From a market perspective, Garshol said most of the additional demand for Atlantic salmon products should come from the North American, Asian, and Middle East markets.
These are currently largely “airborne fresh salmon” markets due in part to the “mismatch” that exists globally between the production regions and the main areas of consumption; North America consumes around 650,000 MT of salmon annually, compared to Canadian production of some 140,000 MT, Garshol said.
Therefore, the planned land-based facilities in high-consumption, low-production markets like the United States and China have the scope to disrupt market dynamics if equivalent product size and quality is achieved as compared to traditional salmon-farming methods, he said.
“Land-based represents a much-needed supplement to this growth, but it’s also a shift toward the potential future away from the major, original producing nations, with a potential increase in the domestic production of Atlantic salmon,” Garshol said.
