3 seafood processors announce closures, selloffs following historic price collapse for Alaska fishing industry

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

Kirsten Dobroth is the Alaska reporter for Undercurrent News, which is a commercial fishing and seafood industry trade magazine. She’s been following this market downturn.

The following transcript has been lightly edited for clarity.

Ava White: Kirsten, it seems like one company closing a plant would be pretty drastic, let alone three. How bad are things right now, and can you give us an overview of what’s happening?

Kirsten Dobroth: Yeah, I think a lot of people would say bad is an understatement and historic is a more appropriate description of the market situation. There was a lot of attention this summer on low base prices paid out to fishermen for salmon. But prices for pollock products also crashed last year, so that’s the state’s two biggest species by volume and value. Since then, this market collapse has spread to pretty much every species. Black cod, for instance, is typically one of the more lucrative dollar per pound fish caught in Alaska, and prices were so low at the end of last year that processors weren’t even buying it. And I should clarify, by “prices” I’m referring to both the dockside price paid to fishermen and the wholesale price paid to processors – so, no one is really safe here, both sides are hurting.

AW: It seems like this is pretty all encompassing. Why is this happening?

KD: That’s a good question and there’s a plethora of answers – most of them come down to global market conditions. Inflation and the pandemic fundamentally changed consumer spending habits – and at the same time, made it more expensive for fishermen and processors to operate.  Trade conditions have also changed with China, and a strong US dollar has made it harder to sell Alaska seafood products in places like Japan, which is traditionally a big buyer. The amount of Russian seafood products in the market has gotten a lot of attention. High interest rates have also hit processors particularly hard. And then there’s just a lot of supply out there, so basic supply and demand – you have these tough market conditions and a lot of product sitting in cold storage that’s getting harder to sell.

AW: Now processing facilities are closing or being sold. What happens to these communities that are losing plants or have large fishing fleets?

KD: Well, I think in the short term they’ll be looking at how to keep people working. In Kodiak, where I live, Trident’s plant – which the company has said it will sell – employs hundreds of people, many of them live here year round. And then boats that sell to Trident, where do they bring fish – especially if other companies are also struggling financially? Peter Pan Seafood Company announced last month that its plant in King Cove won’t open for winter, and city officials there told me they’re expecting a hit to fish landing taxes which make up more than half their general fund budget. But I think it’s also really important to zoom out on this – Alaska’s seafood industry employs tens of thousands of people that collectively earned more than a billion and a half dollars back in 2022 when times were good. Another $160 million went to taxes and fees that year. This isn’t just an issue for Kodiak and King Cove – this is a statewide problem.

AW: Is there any financial relief coming their way?

KD: That’s yet to be seen. About three quarters of the Alaska State Legislature sent a letter to the US Department of Agriculture last month asking for more support and more purchases of Alaskan seafood. The USDA purchased a little more than $200 million worth of Alaska seafood products last year, so that’s provided a boost while things have been bad. But what else they can do and any additional support in the state budget is unclear at this point. It’s worth pointing out that Gov. Dunleavy’s state of the state address didn’t include any mention of fisheries except for Pebble Mine and an allusion to “wild harvest.”

AW: So, I guess looking forward the big question is are there signs that the fishing industry will rebound anytime soon?

KD: I think that’s what everyone is asking. I’ve talked to a number of sources on the processing side of things who think we haven’t hit rock bottom. I’ve talked to fishermen who go out for seasons that either just started up or start up soon and they’re looking at another year of really depressing dockside prices. President Biden just signed an executive order that effectively stops Russian seafood products from getting into the US, and there’s been some optimism in the industry particularly in Alaska about that. But unfortunately I don’t think anyone can say where we go from here.

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