Alaska Fisheries Suffered $1.8B Loss in 2021-23: AFSC Report
NOAA Fisheries economists say Alaska’s fishing industry suffered a $1.8 billion loss in 2022 and 2023, and that the state’s commercial fisheries overall saw a 50% decline in profitability from 2021 through 2023.
“The social and economic ramifications of Alaska’s losses have reverberated down the West Coast and across the country,” Robert Foy, director of the Alaska Fisheries Science Center, said in a report released Oct. 9.
The downturn resulted in the loss of over 38,000 jobs nationwide and a $4.3 billion loss in total domestic dollar value of all goods and services produced. Alaska, California, Oregon and Washington collectively showed a loss of $191 million in state and local tax revenues.
The economic impact on fisheries in 2023 prompted the seafood industry to ask NOAA Fisheries to undertake an independent analysis into the data behind the pressure being felt by fishermen, seafood workers and communities.
NOAA Fisheries set about gathering data from fishing boats, processors and international trade databases for federal and state fisheries in Alaska to produce the “Alaska Seafood Snapshot” report for 2023.
Economists found that starting in 2022, the industry experienced higher costs associated with increased wages, and faced both higher energy prices and higher interest rates. Revenue decreased in 2023 due to declining prices for every major species group, they said.
They also found changes in post-pandemic years in retail operational strategies and consumer seafood purchases, with retailers changing how they handle the seasonal influx of seafood products.
Historically, retailers lowered prices to clear inventory, but retail demand for seafood was strong during the pandemic, as people ate more at home. As restaurants and schools reopened after the pandemic the dramatic decline in demand left retailers saddled with high-priced inventory.
Economists found retailers transitioned to keeping supply lower by slowly moving inventory out of cold storage. This meant the seafood supply was lower in the market, keeping prices higher, allowing retailers to stay afloat.
But it also resulted in seafood producers, processors and wholesalers in Alaska demanding a lower quantity of seafood. While seafood prices softened somewhat this year, it was not enough to lure consumers to purchase the amounts they bought in 2020 and 2021.
International competition, including that from several Russian fisheries, also posed challenges.
NOAA’s economists noted that the Marine Stewardship Council certified Russian fish using the trade name “Alaska pollock” in marketing, giving domestic fisheries less of an edge in global markets.
Russian fish also had lower labor and operating costs in production and processing, resulting in lower environmental and labor standards, hurting the competitive edge of actual Alaska pollock.
Further competition came from international trade barriers, the strengthened U.S. dollar, inflationary prices that impacted consumer demand for higher priced seafood and declines in seafood processing jobs and plant closures in the United States.
The issues collectively contributed to a 32% decline in vessel revenues from 2022 to 2023, a total of $617 million. First wholesale values dropped 26% or $1.2 billion, bringing the total direct loss to $1.8 billion.
Source: https://fishermensnews.com/alaska-fisheries-suffered-1-8b-loss-in-2021-23-afsc-report/
