Bristol Bay fleets call for greater price transparency
There’s a multi-decade precedent for Bristol Bay salmon processors to wait until the season is underway to announce what they're willing to pay. Peter Pan shook up the industry in 2021 and 2022 by announcing a base price at the start of the season, but this year waited until mid-July, along with other processors in the region.
Captain Konrad Schaad, of the Fishing Vessel Skua, says this model hurts fishers.
“The producer gets paid what’s left over. We produce the fish and then it gets processed and sold and everything and everybody gets their cut, and then the morsels that are leftover, they give to us. There should be a fixed cost for what we produce here,” he said.
In Bristol Bay, commercial fishing crews fish on what’s called an ‘open ticket.’ That means starting before they know how much their catch will sell for. They pay to prepare too – in January of this year a single salmon drift gillnet permit costapproximately $207,000. They also invest in improvements like bleeders to best tackle the breakneck run. Then there’s storage and haul-out fees. In Dillingham, for example, the PAF Marine Service boatyard, which is a Peter Pan facility, charges non-Peter-Pan fishermen approximately $6000.
This year, Trident Seafoods was the first processor to announce a 50-cent per-pound price, on July 16. In a letter to its fleet, Trident blamed a saturated market, Russian undercuts and inflation for the price.
When adjusted for inflation, 50 cents per pound is the lowest price listed in the state’s Department of Fish and Game’s online records, which start in 1984. North Pacific Seafoods and Peter Pan Seafoods announced the same price a few days later.
David Couch, who captains the Fishing Vessel Icarus, says processors told fleets that the price would be low before the season started. But they did not specify how low.
“I know guys that are not able to pay their crews this year. They’re going to have to borrow money to pay their crews,” he said. “And I know people trying to figure out how they're going to fly home right now, what credit card they're going put the air fares on.”
He says the relationship between processors and fleet needs restructuring.
“If they made a commitment for a large price on a large year, they could be out of business, too. So there has to be some type of transparency and way that we can talk,” he said.
Couch suggests coming up with an agreement wherein fishing crews receive a percentage of the profit, rather than wait for a base price.
Captain Fran Kaul of the Fishing Vessel Janet Elaine says processors could post a price earlier and pay over time.
“There are creative solutions and everyone’s going to have to dig deep to find them. One that we’ve been throwing around is - post a price. It’s risky. You don’t have to pay the fishermen 100% right away but pay them as that pack is sold so that they’re not holding high interest rates,” she said.
The Bristol Bay Regional Seafood and Development Association, or BBRDSA, is an organization that fleets pay into to market their fish. It’s circulating a petition calling for greater transparency for this year. It cites a 1970 statute that empowers the Department of Labor to mediate price disputes between fishing crews and processors. The association says that in 2022, which had a historically large run, processors' gross margin, that's the difference between first wholesale sales value and ex-vessel payments to fishers, rose 19% for sockeye salmon. Ex-vessel value rose 8%.
For the state to get involved, the statute says that ⅓ of registered commercial fishermen need to disagree with the price. The organization’s executive director Andy Wink says the petition gives fishing crews the opportunity to dispute this year’s 50 cents.
“Whether fishermen want to sign it or not is completely up to them,” he said. “But if they are looking for more answers and transparency in terms of explaining this year’s price and going through a mediation process to see where that might go, we wanted to make sure we made that option available.”
He says the state’s involvement could lead to a productive conversation between processors and fishermen going forward and could help ensure parties adhere to antitrust laws.
Major processors Trident Seafoods, OBI Seafoods, North Pacific Seafoods, Silver Bay Seafoods, and Peter Pan Seafoods have refused requests for comment on this year’s low price and have not responded to requests for comment on industry transparency.
Correction: Alaska salmon processors' gross margin rose 19%, not 22%. This information has been updated in the article, along with the definition of gross margin.
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