Salmon industry's changing currents.

• Author: Barry, Doug
• Position: Industry forecasting - Industry Overview

For Alaska's salmon fishermen, processors and hatchery operators, 1991 was plagued by low prices, late returns and intra-industry quarreling. Here's a look at what the future holds.

In 1991 many Alaskan salmon fishermen tasted the death of their way of life. They weren't alone. Out-of-body experiences were reported by salmon producers and processors around the world. What they saw was a frightening spectacle of chaotic markets, strikes, plunging prices, a mountain of unsold product, bankruptcies, foreclosures, even burials at sea for truckloads of pink salmon.

Some fisheries analysts say dire straits should give way this year to slightly smoother sailing. Although predicting salmon prices makes tea-leaf reading seem like an exact science, fairly reliable signs indicate that prices may float upward. But the business of catching and selling salmon has probably changed for good.

Fishermen received 70 cents a pound for Bristol Bay sockeye (red) salmon in 1991, down from $2.25 a pound in the dreamy days of 1988, when a couple of reds were worth more than a barrel of North Slope crude. Alaska sockeye salmon had been the state's money fish, accounting in 1991 for 65 percent of the value of the entire salmon harvest and 36 percent of the weight.

World production of salmon in 1991 was 2.3 billion pounds, almost double the production of 10 years ago. Farmed salmon's market share has grown from 1 percent in 1980 to 30 percent. There's a tidal wave of fish out there.

Cheap, abundant salmon has created something of a paradox: Although low prices are causing suffering in the short-term, new consumer interest sparked by the bargains may bring stability to the Alaska salmon industry. Consumption is increasing, but not fast enough to use all the available salmon at anywhere near the prices sellers used to get. Japan, the world's largest salmon consumer, last year couldn't absorb the increased production at lofty 1988 prices.

Many Japanese importers lost lots of money as they slashed prices in early 1991 to sell expensive fish that they'd bought the year before. Burned by the expensive fish, and with cold storages still brimming with farmed coho salmon from Chile purchased during the winter, Japanese buyers last summer were looking for cheap sockeyes from North America.

Pink salmon fishermen fared worse. Although the fish returned in record numbers, fishermen received between 12 and 15 cents a pound, and many processors stopped buying as their canning lines clogged with late-arriving fish. Many fishermen claimed they were losing money. Some quit, tied up their boats, and sat out the rest of the dreary season. The value of limited entry permits in Prince William Sound plummeted.

Finger-pointing ensued. The Japanese were blamed for fixing prices, though credible evidence of illegal activity has not yet surfaced. Processors in Prince William Sound accused the aquaculture association of producing too many pink salmon, and the aquaculture managers and fishermen blamed the processors for not buying all their fish.

Fishermen and processors blamed the state for not allowing floating processors into the sound to take up the slack. The Alaska Department of Fish and Game was blamed for not opening the season earlier and farther out in the sound, which might have improved the quality of the pinks.

Much smaller in number, the wild pinks usually enter Prince William Sound first. But the runs were late, and wild pinks mingled with enormous numbers of returning hatchery fish, so Fish and Game delayed openings until escapement goals were reached for the wild pinks.

Nature was blamed for the late returns. Because the fish were more mature, deterioration was hastened, making them...