Bristol Bay fleets call for greater price transparency
There’s a multi-decade precedent for Bristol Bay salmon processors to wait until the season is underway to announce what they're willing to pay. Peter Pan Seafood shook up the industry in 2021 and 2022 by announcing a base price at the start of the season, but this year waited until mid-July, along with other processors in the region.
Captain Konrad Schaad, of the fishing vessel Skua, said that this model hurts fishers.
“The producer gets paid what’s left over. We produce the fish, and then it gets processed and sold and everything and everybody gets their cut, and then the morsels that are leftover, they give to us. There should be a fixed cost for what we produce here,” Schaad said.
In Bristol Bay, commercial fishing crews fish on what’s called an "open ticket." That means starting before they know how much their catch will sell for. They pay to prepare too. In January 2023, a single salmon drift gillnet permit cost approximately $207,000. They also invest in improvements like bleeders to best tackle the breakneck run. Then there’s storage and haul-out fees. In Dillingham, for example, the PAF Marine Service boatyard, which is a Peter Pan facility, charges non-Peter-Pan fishermen approximately $6,000.
This year, Trident Seafoods was the first processor to announce a 50-cent per-pound price on July 16. In a letter to its fleet, Trident blamed a saturated market, Russian undercuts, and inflation for the price.
When adjusted for inflation, 50 cents per pound is the lowest price listed in the Alaska Department of Fish and Game’s online records, which start in 1984. North Pacific Seafoods and Peter Pan Seafoods announced the same price a few days later.
David Couch, who captains the fishing vessel Icarus, said that processors told fleets that the price would be low before the season started. But they did not specify how low.
“I know guys that are not able to pay their crews this year. They’re going to have to borrow money to pay their crews,” Couch said. “And I know people trying to figure out how they're going to fly home right now, what credit card they're going put the air fares on.”
Couch said that the relationship between processors and fleets needs restructuring.
“If they made a commitment for a large price on a large year, they could be out of business too. So there has to be some type of transparency and way that we can talk,” Couch said.
Couch suggested coming up with an agreement wherein fishing crews receive a percentage of the profit rather than wait for a base price.
Captain Fran Kaul of the fishing vessel Janet Elaine said that processors could post a price earlier and pay over time.
“There are creative solutions and everyone’s going to have to dig deep to find them. One that we’ve been throwing around is post a price. It’s risky. You don’t have to pay the fishermen 100% right away, but pay them as that pack is sold so that they’re not holding high interest rates,” Kaul said.
The Bristol Bay Regional Seafood and Development Association, or BBRDSA, is an organization that fleets pay into to market their fish. It’s circulatinga petition calling for greater transparency for 2023. It cites a 1970 statute that empowers the Alaska Department of Labor to mediate price disputes between fishing crews and processors. The association says that in 2022, which had a historically large run, processors' gross margin (the difference between first wholesale sales value and ex-vessel payments to fishers) rose 19% for sockeye salmon. Ex-vessel value rose 8%.
For the state to get involved, the statute says that one-third of registered commercial fishermen need to disagree with the price. The organization’s executive director, Andy Wink, said that the petition gives fishing crews the opportunity to dispute this year’s 50 cents.
“Whether fishermen want to sign it or not is completely up to them,” Wink said. “But if they are looking for more answers and transparency in terms of explaining this year’s price and going through a mediation process to see where that might go, we wanted to make sure we made that option available.”
Wink said that the state’s involvement could lead to a productive conversation between processors and fishermen going forward, and could help ensure parties adhere to antitrust laws.
Major processors Trident Seafoods, OBI Seafoods, North Pacific Seafoods, Silver Bay Seafoods, and Peter Pan Seafoods have refused requests for comment on this year’s low price and have not responded to requests for comment on industry transparency.
Correction: Alaska salmon processors' gross margin rose 19%, not 22%. This information has been updated in the article, along with the definition of gross margin.
Get in touch with the author at email@example.com or 907-842-2200.