Coho salmon farmers in Japan’s Miyagi Prefecture have a hard time making money when forced to go head-to-head with lower-priced imports from Chile.
To escape the price-taker role in a commodity market, a plan formulated by the Miyagi Fisheries Cooperative, the “Miyagi Prefecture coho salmon aquaculture reconstruction project,” promotes a focus on fresh products for the sushi/sashimi market to differentiate from frozen products from Chile. The prefectural fishery cooperative established the Miyagi Coho Salmon Promotion Association, based in Ishinomaki City, and registered a geographical indication for their brand “Miyagi Salmon” in 2017.
Planning for the project was carried out in 2014 and 2015, and a report on the venture gives considerable detail on the sales and expenses of the participants, which mainly consists of local fishery cooperatives’ salmon farming groups, from 2010 (pre-earthquake, tsunami, and nuclear disaster) through 2017.
Following three years of post-disaster reconstruction, the figures for 2015 through 2017 show a profit was achieved in two out of three years, although a profit was made in every year if depreciation of equipment is excluded. In the most recent year of the report, 2017, the 51 production bodies in the prefecture produced 10,759 metric tons (MT) of coho salmon, for revenue of JPY 5,462,489 (USD 52,375, EUR 44,055), working out to a sales price JPY 507 (USD 4.86, EUR 4.09) per kilogram. After expenses, including depreciation of equipment, the profit was just JPY 7,882,000 (USD 75,582, 63,574 EUR) for the whole Miyagi salmon farming industry.
Still, this was the best performance of the three years. In 2015, a slim profit of JPY 2,310,000 (USD 22,149, EUR 18,626) was achieved at a sales price of JPY 507. In 2016, the result was a loss of JPY 26,353,000 (USD 252,716, EUR 212,488) at a price of JPY 495 (USD 4.74, EUR 3.99). The major costs were for feed and fish for stocking, leading the report’s authors to urge an analysis of the cost efficiency of hydrated expander pellets versus dry pellet feeds.
Miyagi Prefecture is Japan's largest producer of farmed coho salmon. In 1992, production peaked at 22,300 metric tons (MT), but overproduction caused lower prices, and the number of producers declined. From 2001, competition from imports from Chile caused further price drops. In 2006, import volumes of coho stabilized at around 70,000 MT, resulting in prices at which the local producers could survive. But when the region was hit with the 2011 earthquake, tsunami, and nuclear disaster, the destruction was complete, and Chile took the entire market for coho.
Since then, the industry has rebuilt and recently profited from a few years of high prices. But in normal years, the market price may be below cost of production in Miyagi.
The prefecture’s current annual production of 13,000 to 15,000 metric tons (MT) accounts for over 85 percent of Japan’s domestic production. Neighboring Iwate Prefecture, also situated along the coast of the Sanriku area of northeast Honshu Island, is a distant second.
Fresh coho consumed in Japan is mostly domestic, as Japanese Customs data for calendar year 2019 shows that only a tiny amount of fresh coho was imported, all from Chile. But that former import volume of 70,000 MT for frozen has increased to nearly 105,625 MT, dwarfing Japanese production.
Imports of fresh trout were much smaller, led by Norway with 738 MT. Imports from Chile were 369 MT. For frozen trout, the price of which moves in correlation with that of frozen coho, Chile led a crowded field of suppliers with 9,048 MT, followed by Norway with 1,902 MT. Turkey was in third place with 547 MT.
Pablo Cajtak, general manager of Santiago-based Salmones Aysen, one of the biggest coho producers in Chile and the only one that produces only coho, said that the number of coho seeded this year is below the previous year and was behind schedule each month.
“We start our harvest on Monday, 27 July, and we will finish on 10 February, more or less,” Cajtak said. “We think that the processing plants will have more difficulty to work and in a slow pattern for sure because of COVID-19. As usual, the peak will be November-December. This year, a lot of coho areas will close on 31 December. The export HG coho to Japan will be (my guess): A) less than previous year (93,000 tons); B) smaller fish, and C) overdue at least one month from the previous year’s monthly pattern.”
So, judging from Chile’s production, Japan may have a slight reprieve on price pressure in the current year, though COVID-19’s effect on demand and trout supply also figure into the equation. According to the paper “Challenge of Reconstructing Coho Salmon Aquaculture after Tsunami” (Shimizu et al., 2015), prices for fresh Miyagi coho run between those of air-flown fresh Norway-origin Atlantics and frozen Chile-origin rainbow trout. The price trend follows that of Chile-origin coho and trout.
The charting site GD Freak show that the five year average price of salted coho salmon, from all origins, through 2019 was in the JPY 950 to JPY 980 (USD 9.11 to USD 9.39, EUR 7.66 to EUR 7.90) range. But 2018 and 2019 were banner years for Japan, with prices rising to around JPY 1,000 (USD 9.59, EUR 8.06) for the first half of 2018, then rising above JPY 1,100 (USD 10.54, EUR 8.86) around the year-end. But a declining price trend in 2019 that continued to April of 2020 brought the average down to JPY 804 (USD 7.71, EUR 6.48) per kilogram by May.
Continuing into the summer, but shifting to price data from the Tokyo Metropolitan government, on 11 July, Miyagi/Iwate-origin salted coho sold from JPY 864 to JPY 972 (USD 8.28 to USD 9.32, EUR 6.96 to EUR 7.83) per kilogram, while coho of Chilean origin was JPY 756 to 918 (USD 7.25 USD 8.80, EUR 6.09 to EUR 7.40), showing a slight premium for the domestic product. Fresh (unsalted) coho salmon fillets from Miyagi sold at Tokyo’s Toyosu Wholesale Market in a higher range of JPY 918 to JPY 1,080 (USD 8.80 to USD 10.35, EUR 7.40 to EUR 8.70) per kilogram in both June and July. The figures for salted salmon at Toyosu should not be directly compared with producer revenue figures for Miyagi stated earlier, as they are in a different form, but the price trend should correlate.
Miyagi salmon is sold at lighter weights than the Chile product. The cooperatives grow fry in land-based tanks for nearly a year, from egg collection in November to the following October, when the fry range from 140 to 180 grams. The juveniles are then stocked to seawater net pens from November through the next July. The waters off Miyagi are too warm for salmon in late summer, so the harvest must be completed by then, even if it means lower harvest weights. The harvest begins from April with individuals larger than 1.5 kilograms, aiming to supply the fresh market during the Golden Week holidays in late April and early May. In contrast, product from Chile is usually sold frozen H&G in the 4- to 6-kilogram or 6- to 9-kilogram range, with the lighter fish garnering a higher price.
Photo courtesy of Suvijag Jangwatkhet/Shutterstock
