FISH FACTOR: Alaska halibut getting battered by foreign imports
Sales of Alaska’s most popular seafoods are being hit hard by markets upended by the coronavirus, but perhaps none is getting battered worse than halibut. Along with the big losses in the lucrative restaurant trade, Pacific halibut also is facing headwinds from increasing foreign imports.
Starting three years ago, sales of fresh Pacific halibut to established markets on the East Coast were toppled by a flood of less expensive fish flowing in primarily from eastern Canada. Trade data show that for 2019 through February 2020, total Canadian halibut imports to the U.S. topped 15.3 million pounds for which the U.S. paid nearly $107 million.
“It is taking over the eastern seaboard and also is being trucked from Boston to major middle American markets such as Chicago and Denver. It’s very hard to sell Alaska halibut to these traditional markets now. The Canadian product is cheaper and is available nearly year round,” said a marketer with more than 30 years of experience in selling halibut from Southeast Alaska, speaking on condition of anonymity.
“All of a sudden, an important market that paid a good price for fresh halibut has disappeared,” he said. “Rule of thumb is generally, sell fresh make a profit, freeze halibut, lose money.”
Earlier this year, fresh farmed Atlantic halibut was spotted for sale at $9.99 per pound at a Costco near Seattle.
Total global production of farmed halibut is only 4.4 million pounds, of which 3.5 million comes from three farms in Norway. (The remainder is from Scotland, Canada and Iceland.) From 2019 through February 2020, the U.S. bought nearly 2 million pounds of wild caught and farmed halibut from Norway for $10.5 million.
Alaska’s losses in fresh sales are combined with huge hits in the West Coast frozen market. That’s due to another newcomer: increasing imports of halibut caught by Russians and processed in China.
“Halibut is not consumed by Asians nor Russians so they target the U.S. The Russian halibut is mostly fished longline, dressed collar and tail off and frozen in blocks at sea. They off load in Busan and auction it to processors for making into fillets,” he said.
The fish then goes to the U.S. and Canada for resale at prices that undercut all others.
“I have been calling end users and distributors trying to find placement for our Alaska product in the frozen fillet form. But the Russian product has taken over,” he wrote in an email. “I visited a customer in Vancouver and he showed me some Russian/Chinese skinless halibut fillets he had bought in the low $6s. Alaskan fillets, for reference, needed to be in the $13s to recoup costs. He mentioned that most of his customers have switched to the less expensive imported. I spent weeks calling fish and chip shops that have always used Alaskan and they prefer not to cut in house but use the imported twice frozen fillets,” he said, adding that Canada is where most of Alaska’s larger frozen halibut (60+ pounds) has gone over the last few decades.”
Other market watchers agree that the appearance of Russian halibut is a new twist to conventional market trends.
“We started seeing increased Russian production about a year and a half ago when it started to pop up in the data,” said Garret Evridge, a fisheries economist with the McDowell Group. “We were wondering where that volume was going, but given the difficult nature of trade data, we didn’t have a firm grasp. Now we see that some of that harvest is making its way into the U.S. It is a relatively new development,”
The Russian/Chinese fish also makes an end run around trade tariffs of up to 25 percent imposed two years ago by the Trump Administration.
“A lot of the product used to come in through Seattle, but since the USA imposed the duties for Chinese processed halibut coming into this country, a lot comes into Vancouver, thereby avoiding the duty,” said the marketer.
The volume coming in from Russia has been tricky to track once it enters the “black box of China,” said Evridge who added, “Then our data really falls apart. But we understand that Russian Pacific halibut entering China can make its way to the U.S. through a variety of ways.”
And the Russian imports are increasing.
“In 2019, we saw about 2 million pounds of frozen Russian caught halibut imported into the U.S. The year prior it was 140,000 pounds. Through the first two months of 2020, we’ve imported about 420,000 pounds, so it’s trending higher. For a relatively low volume fishery and for U.S. markets 2 million pounds is pretty substantial,” Evridge said.
Trade data show that the U.S. paid nearly $6.7 million for 2 million pounds of Russian caught halibut from 2019 through January 2020.
The foreign fish also get the benefit of more favorable exchange rates.
“The Russian ruble has weakened against the U.S. dollar by about 14 percent. If I’m a U.S. buyer, there’s a 14 percent discount. The ruble is also weak against the Chinese yuan, so if I’m a Chinese buyer, bringing that product in is relatively affordable. That’s another thing that that we struggle with,” he explained.
Tariffs of up to 25 percent are in place for most seafood both coming and going to China, and Russia has not purchased a pound of U.S. seafood since 2014.
Meanwhile, Alaskans have 17 million pounds of halibut to catch this year and landings so far are down 60 percent. With deflated markets and dock prices in the $3 to $4 range, there’s not much motivation to go fishing.
Alaska’s salmon season officially kicks off on May 14 at Copper River near Cordova with the arrival of kings and sockeyes. Other salmon fisheries will quickly follow.
Alaska’s total 2020 salmon catch is projected at just less than 133 million fish, a 36 percent drop from the 208 million fish taken in 2019.
The state’s largest herring fishery at Togiak in Bristol Bay opened on May 3. Icicle is the only buyer for a haul of nearly 39,000 tons of herring caught for their roe.
Kodiak’s roe herring fishery is still underway with catches topping 1,500 tons. The price was reported at $300 per ton.
A small, one-day-a-week herring fishery is underway at Upper Cook Inlet through May 31. The UCI’s 200 ton smelt fishery runs from May 1 through June.
Dungeness crab opened around Kodiak on May 1.
Southeast Alaska’s longest ongoing fishery — beam trawling for pink and sidestripe shrimp — opened on May 1 with a catch quota of nearly 1.8 million pounds. A pot shrimp fishery opens on May 15 with a 32,000-pound quota.
A lingcod fishery is underway and Southeast divers are still going down for giant geoduck clams.
Trollers will be out on the water this month targeting hatchery kings in several regions.
At Prince William Sound a second opener for big spot shrimp was set to wrap up on May 9. The total catch by 60 boats will come in at just more than 68,000 pounds.
Just more than 2 million pounds of halibut has been landed since the mid-March opener.
Sablefish catches at just more than 5 million pounds also are down.
The Bering Sea snow crab fishery is wrapping up with a 30.6 million-pound catch. Final prices won’t be settled until July.
And as always, catches for cod, pollock, flounders and much more are ongoing in the Gulf of Alaska and Bering Sea.
Mug Updates tell Alaska fishermen how to navigate the strict COVID-19 mandates in place for salmon season. The updates are provided by the Alaska Fishermen’s Network, an arm of the Alaska Marine Conservation Council.
“The purpose is to help you dip your toe in and give you a roadmap for some information to prepare for this upcoming salmon season and for fisheries that are currently ongoing,” said Jamie O’Connor, Network director and a longtime Bristol Bay fisherman.
COVID puts the kibosh on parties in the boatyard, the Mug Updates advise, and include simple suggestions like using paper dishware and changing up your galley game with gloves and masks for making meals.
“Basics of sanitation and hygiene are huge,” O’Connor stressed. “I think when people are putting together their grubstake, whether they’re putting in a barge order for their summer in the community or they’re going fishing, it’s important that they flag some of these little things to put in their shopping cart. It can make a world of difference.”
From what she’s hearing, O’Connor said fishermen “are committed to doing things as safely as possible.”
“I’m also hearing a real concern for our supply chain, and people are very aware of the important role we play as food producers,” she added.
“Keeping informed is vital right now,” she said, “and we’re doing our best to make that as understandable and digestible as possible. We’re also helping people work through the decision process about whether they are able to fish this season or sit this one out.”
The Mug Updates tell it straight about salmon fishing during the COVID pandemic: Play by the rules or everyone gets sent home.
Find the Updates at www.akyoungfishermen.org and on Facebook.