A new report suggests 2015 is not a good year to be a sockeye salmon processor in Bristol Bay, Alaska.
The report, produced by the McDowell Group for the Bristol Bay Regional Seafood Development Organization, blamed, among other things, excessive inventory and the prospect of even more coming in for a predicted low cash flow year.
A lackluster 2014 featuring plenty of leftover inventory, according to the report, means the processors didn’t have much going into 2015 to begin with. Net processing revenues from products sold in the latter half of 2014 were down 56 percent compared to 2013, their lowest level in 10 years, and not everything harvested last year has sold yet.
“Eventually processors’ inventory from the 2014 harvest will be converted to revenue, although it appears unlikely that net returns will match returns from previous recent years given current price levels,” McDowell Group wrote in its report.
Couple that with another expected huge harvesting season this year, and the result will be lower prices and difficulty moving an unusually large amount of product, the report predicted.
Foreign exchange rates will also have an impact, the report said.
“A significantly stronger dollar relative to the euro, yen, and ruble has made Alaska sockeye more expensive in key export markets,” the report said.
The group based its analysis on figures from the Alaska Department of Fish and Game, the Alaska Department of Revenue, and export data from the National Marine Fisheries Service. Researchers also interviewed retail executives, processor sales managers, “and other market experts.”
