Behind the steep salmon decline in Chile

Chile’s salmon production plummeted 34 percent in May to 174,400 metric tons (MT) due to several factors that that include the aftermath of the volcano eruption and decreased demand from U.S. retailers.

New figures from the Chilean Undersecretariat of Fisheries and Aquaculture (SUBPESCA) also show a drop in total fish production of 47 percent to 195,000 MT. Production of some species dropped even more significantly than salmon, such as rainbow trout, an 88 percent drop at 7,100 MT.

“Strikes, volcanoes and news of high antibiotic usage has caused some low production,” said Rob McNutt, seafood buyer and category manager for salmon, halibut and rockfish at distributor Tradex Foods in Victoria, B.C., Canada, which buys frozen salmon from Chile. Chilean salmon producers took a major hit this spring when U.S. club chain Costco switched from Chile to Norway salmon, a move the retailer said was to avoid excessive antibiotics administered to the fish. Walmart’s new antibiotics policy may also signal that America’s largest retailer is shifting away from buying Chile salmon.

In late April, the Calbuco volcano eruption wreaked havoc among major farmed salmon producers, including Marine Harvest and Cermaq. According to Salmon Chile, four of the 11 salmon hatcheries in the area near the volcano suffered serious damages and losses of fish.

Marine Harvest reported losses of 6.8 million fry, 2.4 million eyed eggs and around 3,700 broodstock after the volcano. Cermaq also lost its 2015 stocking generation of coho salmon, a situation CEO Jon Hindar called “unfortunate.”

And, last week, Marine Harvest Chile said it is reducing its smolt stocking in 2015 from approximately 17 million to around 11 million smolt, due to “weak prices in Marine Harvest Chile's main markets for Atlantic salmon, in addition to a challenging biology in general,” according to a statement from the company.

The company will lose approximately USD 4 million (EUR 3.6 million) because of the reduction and will reduce its workforce by 200 man-years.

“These measures are taken to contain losses for Marine Harvest Chile until the main markets for the Chilean salmon have recovered,” the company stated.

Despite the production drop, farmed salmon buyers in the United States and Canada say they had not heard about a major drop in production, and have not seen a drop – or increase – in prices recently. “I’ve heard a little of production being down, but I haven’t seen it reflected in the price yet,” McNutt said. “It is such a manipulated item, price-wise.”


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