King Cove braces for salmon season with no seafood processor amid historic price slump

The city of King Cove is worried about the future after its seafood processor announced earlier this month that it will cease operations. The plant, formerly owned by Peter Pan Seafood Company, is the economic engine of the community on the Alaska Peninsula. 

A new owner will take over the processing plant, but it’s unclear when the facility will reopen. Kirsten Dobroth is the Alaska reporter for Undercurrent News, which is a commercial fishing and seafood industry trade magazine. She’s been reporting on what this means just ahead of salmon season.

The following transcript has been lightly edited for clarity.

Ava White: Why is this plant closing- at least for now? 

Kirsten Dobroth: The seafood industry has been struggling with this historic slump in wholesale and dockside prices. Back in December, Trident Seafoods announced it would sell four of its shoreside processing plants in Alaska because of this market situation. At the time that was kind of a bombshell that got a lot of attention outside the industry.

And within a few weeks of that announcement Peter Pan Seafood Company also said it would temporarily close its facility in King Cove for winter. That’s noteworthy for a number of reasons – it’s the company’s biggest plant, it processes a number of species year round. But at the time Peter Pan said it would reopen for the summer salmon season. 

AW: And it sounds like now that’s not happening.

KD: Right. It was pretty widely reported as time went on that Peter Pan was in some serious financial trouble. And then fast forward to just a few weeks ago – it comes out that Silver Bay Seafoods, which is also a major processor in the state, will take over all four of Peter Pan’s plants as part of this major restructuring plan that’s still being finalized. Silver Bay says in the announcement that it will operate all the Peter Pan plants for the summer – except for King Cove. 

Meanwhile, Peter Pan really wasn’t saying anything about what it planned to do with King Cove. But there were some signs that things weren’t looking good – for instance, some fishermen I spoke with were already signing on with other buyers for summer. 

And then about two weeks ago the company posted on Facebook that the plant would stay closed and encouraged people to apply to Silver Bay for work. And since then Silver Bay has also confirmed that – at least for now – it doesn’t have plans to open the facility.

AW: Okay, so a lot has happened. Why is this Peter Pan news such a big deal in this whole picture?

KD: There are a few things that are notable about this announcement between Silver Bay and Peter Pan. One is that it’s a major deal between two of the state’s biggest and more recognizable shoreside processors – and one is effectively ending operations altogether less than two months before the start of salmon season, which is the peak time for most processors and fishermen.

Another noteworthy point to the Peter Pan side of this – the current owners only bought the company back in 2021. One of the financial backers of that sale was McKinley Capital Management, which was using money from the Permanent Fund Corporation’s in-state investment program at the time. I don’t know what the implications of that are. But I think when you look at how quickly this company is halting operations – it’s really indicative of how quickly things have changed for one of the state’s biggest industries.

AW: Okay, so let’s go back to King Cove, what does this mean for that community?

KD: The implications for the city of King Cove are huge. I’ve talked to city officials there pretty frequently since early this year and this is a big financial hit for them. More than half King Cove’s general fund budget comes from fishing landing taxes. And I think the ambiguous timeline for reopening has people there worried. 

Some hurdles to reopening quickly, though, are deferred maintenance at the facility that need to be addressed. Silver Bay has also said it’s prioritizing absorbing as much of Peter Pan’s fleet as possible, including up in Bristol Bay, where Silver Bay will now operate two processing plants because of this Peter Pan deal. So, that will likely eat up some of the company’s more immediate expenses. 

But keeping King Cove closed will have a regional impact, too. Fishermen outside of that local fleet have historically delivered to the King Cove plant depending on the species and price at any given point. So, I think there’s a lot of people that are anxiously awaiting word on when things will be back up and running.