Commentary: Bristol Bay Fishermen pay the price for recent record salmon runs

 

August 17, 2023



Early in the season, one of my deckhands started the joke, “Pay to Bay,” dreaming of people paying money to fish on a drift boat in Bristol Bay, like people pay to climb Mt. Everest. That joke came around to bite us. We had a breakdown during the peak of the run, then the day we got fishing again Trident posted the 50-cents/lb base price (before quality incentives amounting to another 30 cents or more). The processor we sell to, Silver Bay, seemed sure to follow Trident’s lead. I sent my deckhands home with checks for $5,000 each—not much for two months of dangerous work on a 32-foot boat. But I will likely be paying into the business this year with payments to make on my boat and permit. Not so much that I’ll have to sell out though, which is a real fear for some. I’m satisfied when a season is good enough to go back and do it again, but I can’t stay satisfied if I “Pay to Bay” for more than a couple seasons.

I’d heard 50-cents/lb rumors since March, so when Trident finally posted that base price, I wasn’t surprised. What surprised me was how many other people were surprised. And outraged. There was a pandemic, now there’s a war and inflation. These seem like solid excuses for processors to not be able to pay fishermen much. I don’t enjoy the sense of powerlessness being at the bottom of the supply chain, but I believe fishermen still have the most interesting jobs in the seafood industry.

Since I started as a deckhand in Bristol Bay in 2007, I’ve seen a wide range of prices, run sizes, and catches. I’ve seen base prices from $.50-$1.50, run sizes from 25-79 million fish, and poundages from 40,000 lbs to over 200,000 lbs. Complaining about the low years seemed like complaining about the weather. But my resignation didn’t account for inflation. Much more experienced fishermen, some having fished the Bay since the ‘70s, stated that after adjusting for inflation this is the worst price ever. The low base price alone would outrage some, but the knockdown is that the fish we’re bringing to market is the best quality ever.

I see a parallel between wild salmon and corn, where over the past hundred years farmers have tripled the bushels of corn that can be grown per acre. This has been enabled by petroleum-based fertilizers and genetically modified corn varieties, as well as bigger and better machinery. Now though, it’s harder than ever to get on top of the debt from using the latest technology, because the very efficiency of the operation has driven the cost of corn down so much. Fishing technology has also enabled higher efficiency, quality, and volume of production, but the recent record Bristol Bay sockeye salmon runs aren’t a direct result of fishermen’s practices.

Even the biologists at the Alaska Department of Fish and Game can’t fully explain the large returns of the past two years. Warming water due to climate change could be part of it. Warm water is good for zooplankton, which young sockeye feed on when they first enter the ocean. But the state blamed warm El Nino water for the 12.5 and 9.7 million-fish-catch seasons of 1997-98, declaring Bristol Bay a disaster area. Whatever the reason, the record high seasons of 2021 and 2022 don’t seem entirely natural either. But what’s really unnatural is that the processors didn’t put fishermen on limits the past two years.

At the preseason meeting for the Silver Bay Seafoods fleet, president and co-founder Troy Denkinger appeared near tears as he bemoaned what the company could afford to pay fishermen in 2023. He’d built the Silver Bay plant in Naknek with the dream of processing the highest quality fish in the Bay, and paying fishermen the highest price in the Bay. But the reality is every processing company sells sockeye to the same handful of wholesalers who then distribute the product globally. Denkinger asked for suggestions about how we could make our product stand out from the rest, but didn’t think it feasible to offer quality incentives to fishermen beyond what they were already paying for RSW (refrigerated sea water), floating (keeping enough water in the holds to keep the fish afloat, preventing bruising), bleeding (cutting across a gill of every fish to let their blood out and prevent bruising), and mats (preventing bruising when the fish are dropped from the net to the deck). Stopped on the street by a fisherman in Sitka, Denkinger had even been blamed personally for the drop in salmon prices, not just in the Bay, but in Southeast too. It sounds silly to blame one man for the poor prices, but it’s hard to deny that the processing capacity that Silver Bay has brought to Bristol Bay—though well-intended—has played a part in the salmon surplus.

A major selling point of Silver Bay Seafoods to early investors in the Naknek plant (who would then be allowed to sell to Silver Bay), was that there would be no limits on the amount fishermen could sell to the company. Most companies had imposed limits from time to time, especially in big seasons when the run was condensed and the peak occurred in multiple river districts at once. Anything approaching a million fish a day in any district often forced most processors to announce limits Bay-wide, either for each fishing period or 24-hour spans. With fish pouring past, a company might say you could only sell 8,000 lbs in 24 hours. Fishermen sometimes met the limit on an opening set, then sat the rest of the day. Silver Bay wasn’t able to keep the promise of no limits for a few seasons early on, but during the record 2022 run, there were no limits at all, from Silver Bay or any other major processor. And they all paid a good price, even though the fish from 2022 was lower quality than smaller runs.

When nets are plugged, fish are picked faster and rougher, and sometimes deck-hauled without picking the fish out at all, piling the net full of fish on the back deck, then picking on the run to the tender. Some boats routinely deck-haul a shackle at a time so they’re free to always keep most of their net in the water. But piling a loaded net onto the back deck leaves fish covered in a red rash, signs of bruising that often extends into the meat. And when boats are plugged, or deck-loaded, as the term implies, there are fish on the deck that aren’t refrigerated at all before being unloaded to the tender. That’s usually no more than an hour or two, but even upon reaching the tender sometimes boats must wait to unload for another two hours, sometimes four, if there is a long line of full boats. 2,000 pounds of fish on deck can be counted as ‘fresh’ and get the RSW price.

When I started in the Bay in 2007, dry boats made up a big part of the fleet (boats with no refrigeration, and no ability to circulate water through the holds). They were dry save the slime and blood, the blood being much less before processors imposed the practice of bleeding each individual fish by cutting their gills. Some dry boats used ice, but most didn’t unless it brought a better price on the grounds. Processers canned most of that fish and shipped it overseas. I find it hard to believe that now our fish are lower quality overall with refrigeration, bleeding, and floating being required for almost every drift boat. Even during the 79 million fish run of 2022.

But the fish from 2022 was likely lower quality than the previous few years. There should have been limits last year, but processors scrambled like they never have before to buy all the fish. Silver Bay made use of their plant at False Pass to process Bristol Bay fish, using a fleet of long-haul tenders to get it there. A few tender loads were even brought to Kodiak. Whatever quality fish showed up there cannot be blamed on fishermen alone. With some limits, the quality of fish could have been improved, and the market could have been less saturated. Fishermen would have complained about the limits as we’ve done in the past, but the 50-cents/lb base price evokes a new kind of frustration, especially as retail prices for sockeye hold relatively steady.

According to John Fiorillo at Intrafish, retailers prefer to maintain high-profit margins rather than selling more salmon at a lower cost, and that’s a big part of the bottleneck in the market for last year’s record catch. Fishermen feel good with boatloads of fish, even before the price is announced, and even after the price is announced at 50 cents/lb. Grocers prefer profits over poundage, and fishermen do too, but in Bristol Bay we’ve been trained to fish most of the season without knowing the price, so often poundage is the only metric we have to hang onto.

When fishermen get a base price of 50-cents/lb compared to $1.15/lb the season before, and the retail price drops two dollars, but from $15/lb to $13/lb, fishermen aren’t the only ones losing money—just more in proportion. It appears middlemen somewhere could be maintaining their margins, but that may not be true.

As I’ve started dabbling in direct marketing, one of the more common questions I get is ‘how much profit do you make per pound?’ My answer is that it depends on how fast I sell it, because I pay for freezer space by the month. I rent a warehouse with my own freezers, and I pay a per pallet rate at a larger facility on the interstate trucking route. If I don’t push the fish very hard, I may only break even.

It's still irksome to see salmon prices at the grocery store hold relatively strong while fishermen get paid less than half compared to last year, but the positive is that wild salmon is still a valuable product. It’s a relief that the price hasn’t simply collapsed all the way through the market, so salmon isn’t going the way of corn, with increases in both product quality and yields while the corn market gives lower prices for consumers and producers, all while producers invest more and more in equipment.

Wild salmon fishermen shouldn’t aspire to corn’s becoming a cheap commodity, but there have been some historical successes with government price-setting for corn. That could theoretically make a comeback, allowing farmers to make a living wage from a modest amount of land. But how would that work for a resource like wild salmon? Since fishermen can’t be told to plant less salmon, catching less simply means more escapement, which in the long-term could hurt returning salmon numbers. It’s possible that having fewer processor-imposed limits in recent years has reduced over-escapement, allowing fishermen to catch closer to the numbers that biologists want them to, scientifically managing the resource for the highest returns. But, to catch what the biologists allow, and not collapse the price, then some of the caught fish must be taken off the traditional market.

In March, our state lawmakers did just that. Senator Lisa Murkowski and Representative Mary Peltola foresaw the impending drop in salmon prices, writing a letter to the Secretary of Agriculture for help moving the surplus from the record 2022 season. The Alaska Seafood Marketing Institute (ASMI) had begun the request process for the USDA to consider Alaska seafood for the Section 32 program under the Agricultural Adjustment Act, which has the dual purpose of supplying nutritious food to food-insecure Americans and helping bolster prices for American producers when a surplus arises. From May-July, 2023, The USDA bought 3.7 million pounds of wild Alaska sockeye, some canned and some frozen filets, for $68 million. Food Banks and School Lunch programs nationwide received the bulk of that salmon. The USDA spent nearly as much on Alaskan wild pink salmon, rockfish, pollock, and haddock. For Bristol Bay fisherman though, this price support may have come too late to support the take-home base price. It may be too little as well, but it’s possible the USDA money will trickle down to fishermen through price adjustments (additional payments per pound that processors distribute in the winter and spring).

Taking another approach, the Bristol Bay Regional Seafood Development Association (BBRSDA) has put out a petition for the Alaska Department of Labor to mediate between Bristol Bay fishermen and processors, guided by the provision of Alaska law (AS 16.10.280), enabling the Department of Labor to mediate fish prices. A third of the total drift and set permit holders must sign this petition to start that process. This means 930 Bristol Bay permit holders must sign. As of August 14th, only 500 have signed. Pre-season price negotiations are at the heart of this petition, in response to the odd practice of Bristol Bay processors only announcing the price near the end of the fishing season, forcing fishermen to fish without knowing how much they are earning with each unload to the tender, and hampering fishermen’s ability to make wise business decisions.

Fishermen should earn a living wage as the first link in the supply chain for such a healthy and sustainable product as wild salmon. Especially since we are the link that takes on the most risk, both physical and financial. We shouldn’t have to pay to be on the ‘sharp end’, like a climber on Mt. Everest. As long as we come back with more food than we left with, we shouldn’t have to Pay to Bay.

 

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