A combination of a depressed farmed salmon market, a heavy wild salmon run and the strong U.S. dollar versus foreign currencies is wreaking havoc among salmon suppliers and processors.
In fact, Japan-based Maruha Nichiro, which owns Peter Pan Seafoods, Trans-Ocean Products and other major seafood processors, reported operating income of JPY 2.75 billion (USD 22.58 million), a drop of 31 percent in its fiscal first quarter. The low market for canned and frozen salmon was partly to blame for the losses, according to the company.
The strength of the U.S dollar versus the yen, the Euro and other currencies is also stifling the salmon market. “The strength of our dollar hurts anything we export. That is what is more challenging than anything,” said Douglas Roan, procurement manager for major North American seafood processor Pacific Seafoods, based in Clackamas, Ore.
In addition, the near record landings of Alaska sockeye salmon, coupled with depressed Atlantic salmon prices, is hurting salmon processors and exporters. “The Atlantic salmon market is at an all-time historic low. Farmed salmon is selling at numbers we haven’t seen before, which also defeats the wild fisheries,” Roan said.
Buyers reported Atlantic salmon prices as low as USD 3.75 (EUR 3.37) to USD 3.90 (EUR 3.56) (pin bone out) FOB Miami last week. While the depressed farmed salmon market benefits buyers in the short-term, it is bad for the overall seafood industry, according to Roan. “The prices are scary low. The farmers can’t make money; there are farms in Chile that aren’t even processing the fish that are produced right now. We like to see companies that are going to be around for quite a while,” Roan said.
Meanwhile, whole sockeye salmon is selling for as low as USD 3.40 (EUR 3.10) to USD 3.65 (EUR 3.33) per pound FOB Seattle, thanks to a heavy run. Alaska’s total salmon landings are close to 144 million so far this season, led by 50 million sockeye salmon and 62 million pink salmon landed at Prince William Sound, according to the Alaska Department of Fish and Game.
While the healthy salmon run is good for consumers and other buyers, processors tell SeafoodSouce it has negatively impacted their business. Many already had frozen inventories from last year to move at the start of the season.
In order to move the high volume of wild salmon, processors say it is absolutely vital for them to continually develop new products and markets. “Every salmon year is different; rarely do you get the size [of harvest] that was projected,” said Joe Bundrandt, CEO of Seattle, Wash.-based Trident Seafoods. “Our job is to continue to create and develop new products that continue to drive demand for our products and take care of our fleet in the process.“
