It's just one of those things that causes you to ask: "How can they still do it that way?"
I'm talking about how wild salmon prices paid to fishermen are set and revealed. In this day and age of overwhelming flows of information, the disclosure of salmon prices by Alaska's largest processors -- Trident Seafoods, Peter Pan Seafood, Silver Bay Seafoods, OBI, Canfisco and others -- remains in the dark ages.
We are long overdue for a change.
This year is a great example of how the secretive nature of price setting in Alaska salmon fisheries -- particularly the Bristol Bay sockeye fishery, the largest in the world and Alaska's most lucrative salmon fishery -- strains relationships between processors and the independent fishermen who supply them, and puts both on precarious financial footing.
The new season is nearly underway in Bristol Bay, with peak fishing time a few weeks away. But when it does arrive around the first week of July, fishermen will haul in as much salmon as their boats can hold and deliver it to processors without a complete picture of what they will ultimately be paid.
This is because the culture and tradition in Alaska's salmon fishery mandates that processors wait until the last minute to reveal what they will pay as a base price for the salmon these fishermen catch.
Last year, fishermen in Bristol Bay got $1.15 (€1.06) base price for their sockeye. You might think this year they would get something similar, give or take a little bit. Nope.
Fishermen are facing a cut of as much as 56 percent to last year's base price to potentially 50 cents a pound. But, and this is the important part, just weeks away from the peak of the frenetic fishery they still have no idea what they will truly be paid.
Social media is rife with speculation and frustration on the part of fishermen, adding to their angst and feelings of being cogs in a machine they don't understand and can't control.
Fishermen are small businesses, struggling with the same challenges as any business. They have expenses tied to each season from fuel to crew to food.
Without knowledge of the price in advance of the season, they have to make budgeting decisions on the fly when they are already on the water doing what they love to do -- fish. Everyone knows that making money decisions under duress is risky business, but they have no choice.
It cuts both ways, though. Processors, too, have a mountain of challenges they need to address to prepare for the summer salmon fishery in Alaska. And this year is one of the more difficult in terms of the financial pressures these processors have faced in some time.
Why?
Last year, fishermen in the bay harvested a record 60 million sockeye and netted a base ex-vessel price of $1.15 (€1.09). Fishermen were able to up that base by as much as 30 cents depending on icing and other incentives offered by processors.
The 2022 harvest was double the recent 20-year average of 29.4 million and brought in more than $350 million (€330 million) in ex-vessel value to fishermen. But all of that fish hit markets in the United States and Europe at a time of hyper food inflation and slack consumer demand.
With the start of the new sockeye season now here, processors have been frantically selling off as much of last year's catch as possible, albeit at sharply reduced prices. The costs of carrying the massive amount of salmon in cold storage warehouses and weak consumer demand have strained the finances of several Alaska salmon processors.
Thankfully, the 2023 forecast of 38 million fish is far less than last year and might not compound the inventory overhang problem -- but that will depend on consumer demand, which has been in the toilet for much of the last year because of inflated food prices across the board.
So here we sit, left to guess what the price might be for fish harvested in the largest sockeye fishery on the planet.
Last week, Trident Seafoods posted its price for salmon caught in the False Pass fishery on the eastern edge of the Aleutian Island chain, a migration route salmon follow on their path to Bristol Bay.
Two seasons ago, under new ownership, Alaska processor Peter Pan Seafood bucked tradition and did post the price it would pay fishermen in both the Copper River and Bristol Bay salmon fisheries prior to the start of peak fishing. It is unclear whether it will do so this year.
It was a good step and helped Peter Pan make a splash and rebuild its fleet of independent fishermen.
But we must do better for all parties involved.
There needs to be price transparency in Alaska's fisheries, developed in a way that gives fishermen and processors -- and ultimately the retail and foodservice buyers -- some semblance of order.
There are plenty of models in other fisheries around the world for doing this, but an effective model may already be deployed in Alaska's salmon fishery.
Silver Bay Seafoods appeared on Alaska's processing stage in 2007 with a new model, one in which the fishermen actually own a stake in the company and share in its profits and, presumably, losses.
Since its opening in Sitka, Alaska, 16 years ago, the company has become the top salmon processor in Bristol Bay and a dominant force in the entire state. The roots of what is now Peter Pan Seafood date back to 1898. Trident Seafoods just turned 50 years old. And what is now OBI Seafoods, the result of the merger of the Ocean Beauty and Icicle Seafood under Cooke in 2020, traces its origins back to 1910.
Yet, Silver Bay has vaulted all of them. Because of its more modern plants and high-volume, lower-cost production, it generally pays its fishermen more and forces the Alaska processors to keep up. It is less tied to the old method of price discovery because ultimately its fishermen, who again are owners, get to see the books and have a more thorough understanding of market forces.
Now this does not mean the Silver Bay model is perfect; it also faces the same external market pressures as competitors. But it does say something that its strategy has resulted in the company becoming the leading salmon processor, not only in Bristol Bay, but in all of Alaska.
I have always believed that fishermen do themselves a disservice by not trying to better understand market dynamics and how they affect prices. But it seems most processors aren't doing much to help fishermen understand their financial positions either.
It's time to move into a more enlightened approach to price discovery and shatter tradition. What that looks like isn't easy to say, but it has to follow a simple proposition: I'll show you mine if you show me yours.
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