On January 12, seafood processor Peter Pan announced that it will not operate its King Cove facility through the spring, bypassing the 2024 A fishing season, which begins January 20.
The plant is Peter Pan’s largest in Alaska, and processes some of the most lucrative and largest fisheries in the US including pollack and salmon.
In a press release, Peter Pan said that it, along with other processors, was contending with cost and cash flow problems, including inflation, rising interest rates, high fuel costs and financing problems. The company added that the decision was necessary for the future of their business.
It’s unclear whether the Peter Pan fleet in King Cove will have a buyer for their catch, and the move comes as the industry has seen prices plummet across the board.
Despite a strong salmon harvest season, the 2023 ex-vessel value for the fish was one of the lowest in nearly half a century when adjusted for inflation. Last month, one of the state’s largest seafood processors, Trident, announced it would sell four plants in Ketchikan, Kodiak, Petersburg and False Pass resulting in the loss of hundreds of jobs. Tridents also announced its intention to either sell or retire the historic Diamond NN Cannery in South Naknek, as well as the company’s support facilities in Chignik.
Processors and other fishing organizations have cited both international and domestic market challenges putting pressure on the industry.
In October, the Alaska Seafood Marketing Institute published a letter saying that the industry is experiencing an “economic squeeze not seen for decades or longer.” The letter said that two thirds of Alaska’s catch, by value, is exported, but foreign markets are flooded with Russian seafood. Exports to China, formerly a billion dollar market, have also fallen by half. The letter also stated that domestic markets are down, as consumers contend with high grocery prices.
Gary Hennigh, King Cove’s longtime city administrator said in a call to KDLG that the community was aware of the seafood industry’s cash flow problems, but didn’t expect something as drastic as the plant closure. Hennigh said the closure would impact approximately one third of the city’s general fund budget from fish tax revenues loss, and that while the city has savings, long term revenue loss is a concern.
Correction: This article originally said that Trident was selling a plant in St. Petersburg. It is selling a plant in Petersburg.
Get in touch with the author at christina@kdlg.org or 907-842-2200.
