Whitefish Update
Alaska’s pollock fishery has been riding a wave of record harvests since the early 2000s. Stocks are decreasing, however, and with them the size of the fishery’s total allowable catch. Following recommendations by the team of scientists involved in stock research and monitoring, the North Pacific Fishery Management Council recommended a 337,700-metric ton (744 million-pound) reduction in the Bering Sea/Aleutian Islands (BSAI) fishery. The BSAI accounts for more than 95 percent of the total Alaska harvest. The balance comes from Gulf of Alaska (GOA) waters.
At the same time, though, markets for pollock and other whitefish ingredient species are buoyant. Numerous factors are combining to support pollock prices and demand, chief among them are consumer demand for seafood products resulting from health and food safety concerns; the relative strength of the Euro over the dollar, which favors exports of U.S. products; increasingly successful substitution of pollock for troubled Atlantic cod stocks; and the continued development of new value-added products with various whitefish species as key ingredients.
Aquaculture producers are fast on the heels of the wild, or capture, fish producers. Production of farmed cod, pangasius, tilapia, and barramundi, among other species, is increasingly rapidly. The reduction in the availability of pollock from Alaska’s fishery creates additional opportunity for aquaculture producers to penetrate whitefish markets and provide substitute products.
The 2007 Alaska Pollock Fishery
The total TAC for pollock in Alaska in 2007 was approximately 1,408,000 metric tons (3.1 billion pounds), including quota in the Bering Sea/Aleutian Islands fishery as well as the Gulf of Alaska.
In 2007, surimi made up nearly a third of the production in total product volume. Another 19 percent of production was in skinless/boneless fillets. With the addition of deep-skin fillets (which remove the darker colored meat near the skin of the fish, allowing for a whiter product; 13 percent of production), these product forms provide the basis for the numerous value-added applications in which pollock is used.
Overall, product form trends that have been in evidence in recent years continued. Production of surimi as a percentage of the total product decreased, fillet products increased overall (with a slight decrease in skinless/boneless fillets offset by a larger uptick in deep skin fillet. H&G (head & gut) production also is increasing, likely due in part to trends toward overseas reprocessing.
The 2008 Alaska Pollock Fishery: Status
The 2008 pollock fishery is off and running, with the A-season wrapped up and the B-season, with a March 20 opener (March 10 in the Gulf of Alaska), now underway. As of April 12, approximately 390,000 MT of pollock (860 million pounds) has been caught by the Bering Sea/Aleutian Islands fleet. Approximately 25,800 MT of pollock has been taken in GOA fisheries.
Market Reponses to Reduced Supply
As can be expected, reductions in the pollock quota for 2008 are resulting in a squeeze on products made from pollock. Surimi products are among those that face supply source issues. Surimi is the basic raw input for countless value-added food products. Recent reporting in the Japanese trade press suggests that the surimi reprocessing industry in Japan is experiencing some hardships as a result of the lower supply. As supply is decreasing, prices are also increasing (by perhaps as much as 40 percent). The resulting increase in the cost of finished product will be challenging for the industry, which may bump up against consumers’ price tolerance.
Pollock roe prices are also up this year, reportedly in response to the decreased supply.
Import and Export Trends
The National Marine Fisheries Service reports on exports of seafood from the United States. Trade data through the end of December 2007 reveal a number of interesting trends, when compared to similar data from the previous three years.
Exports of frozen Alaska pollock fillet from the U.S. totaled 229.1 million pounds from January through October. Approximately 70 percent of this product went to just two countries—Germany and the Netherlands—both of which serve as major transshipment points for seafood that is reprocessed in Europe, and particularly in Eastern Europe. The total volumes to both of these countries were up slightly from the same period in 2006. China was the third most significant destination for frozen fillet, but received only 10 percent of the total export volume. Still, this was a total of 22.2 million pounds, and a 411% increase in volume over the preceding year.
Frozen pollock roe, on the other hand, moves almost exclusively to the Japanese market, where it is a customary food item. Total exports of roe totaled 65.7 million pounds. In 2007, 61 percent of total roe exports went directly to Japan, and 38 percent to South Korea. Nearly all of the roe sent to South Korea can be reasonably assumed to have been re-exported to Japan.
A total of 277.2 million pounds of Alaska pollock surimi was exported from the U.S. in 2007. As with roe, Japan and South Korea were the major destinations for the Alaska pollock surimi, with a total of 87 percent of the product moving to those two countries. Three European countries—Lithuania, France, and Germany—rounded out the top five export destinations, though each of them received 3 percent or less of the total production. While France and Germany are both consumer markets for surimi food products, Lithuania is home to Europe’s largest surimi re-processor.
Key Issues of Interest
• Pangasius production growing, but some control being sought. Pangasius farming is growing at a remarkable rate. Globefish reported that Vietnamese custom statistics showed exports of 272,700 metric tons during the first nine months of 2007 (or 601 million pounds). However, some media reports have predicted global production at 1 million metric tons by 2010. (the approximate size of the 2008 Alaska pollock TAC.) Intrafish Media reports that one Norwegian research and consulting firm specializing in seafood is predicting that pangasius will be a major market competitor for whitefish from Norway. However, the Vietnamese government is attempting to reign in the growth of the industry in order to address some of the environmental implications of the growth.
• Mixed atmosphere around cod farming. Cod farming has come a long way since the spring of 2006, when some of the world’s first farmed cod were presented to interested buyers at the Boston Seafood Show. In 2007, seafood firms made sizable investments in growing cod aquaculture operations, primarily in Northern Europe. Investment in the industry has been substantial, with relatively new companies attracting tens of millions of dollars in investment from seasoned seafood firms, and other, more established companies branching out from salmon farming to include cod and other species. Marine Harvest, the world’s largest aquaculture company, has expanding production to include cod, while other, younger companies, are already achieving significant successes in the marketplace.
Estimates of production volume and growth potential are mixed. According to Intrafish Media, the Netherlands-based bank Rabobank is forecasting farmed cod production at approximately 50,000 metric tons in 2008 (110 million pounds), up from 15,000 MT in 2007. (By comparison, Alaska’s Bering Sea cod fishery quota is about 171,000 metric tons in 2008.)
One producer has been garnering a good deal of media attention—the Shetland Islands, Scotland No Catch brand— recently entered into bankruptcy protection. Other producers have expressed concern about the need for more research, including development of vaccines for particular diseases and other issues. In all, the growth potential for the industry is very strong, but the next few years of development may be cautious ones.
