With farmed salmon prices up about 30 percent since the start of the year, don’t expect Alaska’s production to bring prices down.
“They won’t have any effect at all,” says a CEO of a company whose primary product is Alaska salmon. “Farmed prices are going to stay where they are for a while, not recede, then if harvesting and biomass start coming out of the water in a bigger way in August and September, then you’ll see the prices moderate.”
Feed costs remain high and even if farmed salmon production rises, that won’t bring down prices much. “Once availability finds a level place, you still have feed costs and they’re not going down. So if prices went up 30 percent, you may see them fall about half that, as feed costs went up substantially at the end of the year,” the CEO said.
Prices for fresh whole farmed salmon in mid-April were running from USD 2.75 (EUR 2.14) to USD 4.15 (EUR 3.23), depending on size and where the fish is being landed, with farmed frozen fillets running between USD 3.30 (EUR 2.57) to USD 5.10 (EUR 3.97) a pound. Fresh farmed salmon fillets were USD 4.25 (EUR 3.31) to USD 6.25 (EUR 4.87) and higher, depending on cut and where they were raised. The CEO says whole Scottish farmed salmon was running USD 6.50 (EUR 5.06) to USD 6.75 (EUR 5.26) a pound, f.o.b. New York, about USD 1 (EUR 0.78) a pound more than this time last year.
“I think it’s hit a plateau; prices are high and will stay there,” the CEO said. “But it is not going to keep pushing forward, it can’t. Then we’ll see prices recede at the end of the third quarter, beginning of the fourth quarter as we see new production come online and we get balance. Still, it’s not going to drop too much.”
The high prices are being passed on to consumers, as any look at menu prices or prices at the seafood counter will attest. Still, it’s all relative, the CEO says. “Beef took a big hike right before salmon so the door was open for this to take place and not impact sales too much,” he says. “It’s hard to gauge whether demand is up or down because no one has had enough supply to really push it and find out if they have enough of an audience. Supply has been tight and limited so it’s pretty hard to judge.”
With Alaska’s season set to start this month, the forecast from the Alaska Department of Fish and Game (ADF&G) sees Bristol Bay sockeye down about 19 percent, to 16.6 million fish, from 20.6 million in 2012. Overall, the sockeye catch is expected to dip about 3 percent to 34.3 million fish.
While sockeye may be down somewhat, the number of pinks is predicted to almost double, from 67 million fish last year to almost 118 million this year. Kings are expected to increase about 12 percent to 377,000 fish, cohos should be up around 31 percent to 3.9 million and chums are forecast to rise about 19 percent to 22.7 million, according to AFD&G.
The CEO expects Alaska salmon prices to stay at least as high as they were last year or go higher, and said that could be a problem.
“I don’t know how retailers are going to accept that,” he said. “They’re all going to run their promos at the beginning, but how long will that last? Will Europe buy sockeye at a price considerably higher than last year? I don’t know what that answer is. … I know prices are going to be very steep and that’s going to have to impact sales somewhat.”
