Has the salmon cycle peaked?

Salmon farming is the most cyclical seafood segment with the largest swings in profitability and return on invested capital in the seafood industry, driven by commodity price cycles with periods of large over- and under production, as discussed in the recent IntraFish industry report Investing in Seafood.

I believe, the industry is close to the peak of the cycle, after salmon prices recently rebounded to levels of more than NOK40/kg before Christmas. These levels may not be sustainable, as there’s currently a large difference between top-down industry salmon supply growth expectations provided by research companies such as Kontali and a bottom-up supply growth analysis based on harvest volume projections for 2014 provided by some salmon farmers in the recent Q3 reports.

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