Halibut and Sablefish Season Update
Sablefish and halibut make up less than 2 percent of Alaska’s total commercial harvest tonnage but typically account for 18 – 20 percent of total statewide ex-vessel value. The IFQ longline fisheries for halibut and sablefish opened March 8 and are proceeding at a fairly normal pace.
Halibut Landings
Through April 14, landings of Alaska IFQ halibut totaled 5.5 million pounds, 11 percent of the Total Allowable Catch (TAC) for the season, slightly below the typical landed percentage in recent years. Normal landings through April 14 are 12-13 percent of the TAC, although earlier season start dates in 2004 and 2005 inflate the figure somewhat.
While the percentage of TAC landed is fairly normal in the early weeks of the 2008 season, the declining halibut TAC has a more significant effect on the poundage landed. During 2004 – 2006, average landings through April 14 were 7.4 million pounds, but in 2007 and 2008 landed poundage averages only 5.3 million.
Most Alaska halibut landings (70 percent) are in the 5-month period from May through September. There is no distinct spike within that period, although June is normally the strongest production month.
Halibut Supply
The Total Allowable Catch for Alaska’s IFQ halibut fishery continued its modest, but steady decline in 2008. The IFQ TAC for all Alaska areas is 48 million pounds, down from 50 million in 2007. The statewide IFQ TAC was steady at 59 million pounds from 2001 to 2004, but has since declined by 2 – 4 million pounds per year. The 2008 halibut TAC is a 12-year low.
The most significant quota decrease for 2008 is in area 2C, Southeast Alaska. The 2C quota was cut from 10.6 million pounds in 2006 to 8.5 million in 2007 and again to 6.2 million in 2008. While there was some adjustment between other halibut management areas within Alaska, the net result was negligible. Excluding area 2C, the combined halibut TAC in the remainder of Alaska is stable, fluctuating between 42.6 and 41.8 million pounds between 2006 and 2008.
Market Impacts
The ex-vessel price of halibut has been steadily increasing for several seasons, but early-season prices for 2008 appear to have ended that trend.
Ex-vessel prices in March of this year were reportedly in the low $4 range, off by $1 per pound from March prices of 2007. Early season prices in recent years have been a reasonable indicator of relative market performance when landings pick up in the summer months.
As with any seafood product, it is difficult to attribute price changes to any single factor. There are several potential factors that may be contributing to the lower ex-vessel price for halibut this Spring, among them;
• Halibut is regarded as a luxury item, consumed mostly in high-end U.S. restaurants. The economic slowdown in the U.S. may curb demand to some extent, or at least reduce price tolerance for fish purchased at record prices.
• The Alaska halibut supply has steadily decreased for five years, from 59 million pounds in 2004 to 48 million in 2008 (-19 percent). This 11-million-pound decline in supply likely buoyed prices in recent years, while reducing the dampening effect of buyers dropping out of the market over price concerns.
• It was widely reported that processors entered March with a significant volume of frozen halibut in inventory, produced from fish purchased last Fall at peak prices. While it is difficult to confirm that story, it is reasonable to assume that sellers would be compelled to move carryover frozen inventory into the market, offsetting the product scarcity that would otherwise accompany the 2008 landings volume of only 5.5 million pounds by mid-April.
The halibut market has for several years responded to the steady decrease of supply with steadily increasing prices. March normally represents a small share of Alaska halibut landings (3-4 percent) but this March also represents the first time in recent years that the halibut TAC and price have simultaneously declined. It is too early to tell whether this represents a significant change in the halibut market or if it simply a temporary situation related to artificially inflated supply from market entry of 2007-season frozen product.
While early-season halibut prices of 2008 are below the record levels of the 2007 season they remain, by historical standards, very high. Mid-April ex-vessel prices are reportedly in the mid $4 range, even with weekly landings now reaching one million pounds.
