3 seafood processing companies announce closures and sell-offs following historic price collapse for Alaska’s fishing industry

3 seafood processing companies announce closures and sell-offs following historic price collapse for Alaska’s fishing industry

Three major Alaska seafood processing companies have announced plans to sell or temporarily close their plants during the upcoming fishing seasons. Trident, Peter Pan Seafoods and, most recently, OBI Seafoods – just last month – have cited turbulent market conditions in their decisions.

Kirsten Dobroth is the Alaska correspondent for Undercurrent News, a fishing and seafood trade magazine. It has been following this downturn in the market.

The following text has been lightly edited for clarity.

Ava White: Kirsten, it seems like it would be too drastic for one company to close a factory, let alone three companies. How bad are things now, and can you give us an overview of what’s going on?

Kirsten Dobroth: Yes, I think a lot of people would say that “bad” is an understatement, and that “history” is a more appropriate description of the market situation. There has been a lot of interest this summer about the low base prices paid to anglers for salmon. But prices for pollock also collapsed last year, so these are the two largest species in the state in terms of volume and value. Since then, this market collapse has spread to almost every genre. For example, black cod is one of the highest-grossing fish in dollars per pound caught in Alaska, and prices were so low at the end of last year that processors weren’t buying them. And I should clarify that by “prices” I am referring to both the price paid to fishermen on the dock and the wholesale price paid to manufacturers – so no one is really safe here, both sides are hurting.

Abdul Alou: This seems to be quite comprehensive. Why is this happening?

Kuwaiti Dinar: This is a good question and there are a large number of answers – most of which relate to global market conditions. Inflation and the pandemic have radically changed consumer spending habits — and at the same time, made the work of hunters and processors more expensive. Trade conditions with China have also changed, and the stronger US dollar has made it more difficult to sell Alaskan seafood products in places like Japan, which is traditionally a big buyer. The amount of Russian seafood products on the market has received great attention. High interest rates have also hit processors particularly hard. And then there’s a lot of supply, and so the underlying supply and demand – you have these tough market conditions and a lot of product sitting in cold storage that’s hard to sell.

Abdul Alou: Now the processing facilities are closed or sold. What happens to these communities that lose their plants or have large fishing fleets?

Kuwaiti Dinar: Well, I think in the short term they’ll be looking at how to keep people in work. In Kodiak, where I live, the Trident plant — which the company has said it will sell — employs hundreds of people, many of whom live here year-round. Then the boats that sell to Trident, where do they bring the fish – especially if other companies are also struggling financially? Peter Pan Seafood Company announced last month that its King Cove plant would not open for the winter, and city officials there told me they expect a reduction in fishing taxes that make up more than half their general fund budget. But I think it’s also important to focus on this – Alaska’s seafood industry employs tens of thousands of people who collectively earned more than a billion and a half dollars in 2022 when times were good. Another $160 million went to taxes and fees that year. This isn’t just a problem for Kodiak and King Cove, it’s a statewide problem.

Abdul Alou: Is there any financial aid coming their way?

Kuwaiti Dinar: This has not been seen yet. About three-quarters of Alaska’s state legislature sent a letter to the USDA last month asking for more subsidies and more purchases of Alaskan seafood. The USDA purchased just over $200 million in Alaskan seafood products last year, providing a boost while things were bad. But what they can do and any additional support in the state budget is unclear at this stage. It should be noted that Governor Dunleavy’s State of the State address included no mention of fisheries except for the Pebble Mine and a reference to “wild harvest.”

Abdul Alou: So, I think the big question is, are there signs that the fishing industry will rebound anytime soon?

Kuwaiti Dinar: I think this is what everyone is asking for. I’ve spoken to a number of sources on the processing side of things who believe we haven’t hit rock bottom. I’ve talked to fishermen who are out in seasons that have just started or are starting soon and they are looking forward to another year of really low prices on the dock. President Biden just signed an executive order effectively banning Russian seafood products from entering the United States, and there has been some optimism in the industry especially in Alaska about that. But unfortunately, I don’t think anyone can say where we go from here.

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