Nothing is certain in today's economy, except that people will need to eat. And with supply chains in terrestrial proteins being disrupted, seafood may have an opportunity. The opportunity, though, will be available to a well-known species that can deliver consistent quality, sizes and volume.
Once again, farmed salmon appears to be avoiding the deep pain felt by other segments of the seafood value chain, and seems to be proving it can weather just about any economic crisis.
Salmon companies have taken a hit, certainly -- from soft demand to logistics nightmares to Covid-19 outbreaks, particularly in the early days of the outbreak -- but the problems just haven't seemed to stick.
In March, when lockdowns more broadly began and borders were shuttered, Norwegian salmon exports were up 4 percent. Panic buying sent exports soaring, but even after falling sharply during the Easter period, exports have already begun springing back, and, in fact, sales in some markets are booming as consumers move to in-home eating.
Prices are soft, especially for larger-sized salmon, but the steep declines from week 11-14 are leveling out.
Market watchers have counseled that fears about the sector be shrugged off.
Sparebank 1 analysts, for example, projected "unprecedented retail demand" for salmon. ABG Sundal Collier has a "buy" rating on all publicly-traded salmon shares on the Oslo Stock Exchange, and analyst Martin Kaland projected the worst of the coronavirus-related impacts on salmon demand were over.
Analysts at DNB, too, have buy ratings on all salmon shares as well, save for Mowi, which it rates as a "hold."
In a recent presentation, analyst Alexander Aukner called salmon a "safe haven" during the turbulent coronavirus period.
While some salmon companies have postponed dividends, as a sign of how bullish the industry is about its future, most are showing no signs of slowing investments.
SalMar still plans to invest NOK 1.4 billion (€125 million/$136 million) into hatcheries, sea farms and offshore operations this year. Norway Royal Salmon is continuing its charge into offshore and smolt expansion as well. Grieg Seafood and Cooke are investing in growth in Eastern Canada.
And it's not just traditional netpen salmon farming that is proving resilient. Land-based salmon farming companies have charged straight into the breach, and investors backing them appear to be unmoved by the general economic downturn.
Atlantic Sapphire moved ahead with its mainboard Oslo Stock Exchange listing today, and was rewarded last week by a 17 percent jump in its share price, putting the value of the group at NOK 8.1 billion (€713 million/$780 million).
Nordic Aquafarms raised NOK 88 million ($8.5 million/€7.8 million) in a share issue at the end of last month for its Norway-based Fredrikstad Seafood farm. Last week, the company announced plans to expand its $400 million (€368.4 million) California project.
Land-based salmon farming project Salmon Evolution raised NOK 258 million ($22 million/€20.4 million) and thinks public listing is in its near future.
Second quarter figures will be out in a few months, and we'll get much more insight into just how well salmon companies fared as the pandemic takes its toll.
A lot can happen between now and then, and it's likely that the numbers will be ugly. But whichever species come out on the other side of this crisis on top, farmed salmon is sure to be among them.
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