Monday, May 6, 2013

'From boat to throat'

The Alaska Seafood Marketing Institute has an interesting analysis on its website looking at the "salmon value chain."

That is, who receives what share of the ultimate (retail) value of a fish.

One example is a typical 6.5-pound Bristol Bay sockeye delivered chilled to a processor for fillet production.

For the 2011 season, it broke down this way:

• Fisherman, $8.45 or 29 percent of retail value
• Processor, $10.53 or 36 percent of retail value
• Distributor, $2.42 or 8 percent of retail value
• Retailer, $7.94 or 27 percent of retail value

The analysis offers similar breakdowns for troll-caught Chinook salmon and seine-caught canned pink salmon.

An ASMI contractor, the McDowell Group, did the analysis as part of the April edition of the Seafood Market Bulletin.


Anonymous said...

Am I to believe that salmon roe is given away in the marketplace?

Omega 3 extracted oils are also given away?

Milt given away?

Trident will probably give away all the processed byproducts from their new reduction facilities also.


"Pay no attention to the man behind the curtain." (Wizard of Oz)

Another McDowell report courtesy of your local "love you" processor.

Anonymous said...

A broad analysis? I'd say so. No egg money and, has anyone checked on what happens to the carcass. Are the salmon carcasses turned into feed for ,dare we say it, farmed fish? Mc Dowell, be a little more complete when you are shoveling it out. Your "paperwork has more holes in it than Obama's healthcare plan.

Anonymous said...

and how about if the fish buyer "sells" H&G product to his own subsidiary overseas
for reprocessing, and reports whatever he likes to the state? is this propaganda paid for with taxes collected from fishermen? do the buyers lobby the tax collectors? Thanks for passing this along wes, but the fleet needs a more comprehensive analysis.

Anonymous said...

How many ounces in a kilogram, from the Wizard?

Sockeye said...

Don't feed into the typical naive-to-markets fishermen narrative. The McDowell report places the roe contribution, carcass etc etc as part of the processor share.

Anonymous said...

I understand the comments about roe value. However the value chain analysis was looking at the value per segment for a single product - not everything that gets made from that fish. That was not the point of the exercise, as the intention was to track a single product. We understand including the roe would increase the total revenue retained by the processor, probably by about $2-$3 per fish.

Farther down in the bulletin there is an analysis that shows the percentage of wholesale value retained by the fishermen. This includes ALL salmon products (except salmon oil, which is negligible compared to the total wholesale value).

We addressed the issue fairly and objectively. I encourage anybody who is interested to read the salmon bulletins, in their entirety, for yourselves.

Andy Wink
McDowell Group

Deckboss said...

A good and useful comment, Andy. Thanks!

Anonymous said...

Why not just include the roe, and call it a day. The COAR is so terribly flawed that unless you can use just the ASPR the exercise is not going to be completely accurate. Maybe these armchair economist experts here that NEVER do anything but throw rocks while firmly believing in all thing as a conspiracy will chime in with whay they got for their pinks, dogs, and reds.....including their "loyaly" or "production" bonuses or "stock dividends". I guarantee that these total numbers for pinks will be far higher than the COAR or other F&G data reports

Anonymous said...

How much does it sell for in Tokyo, Singapore, Beijing, etc...?

Anonymous said...

Just looking at these figures, The processor makes more than the fisherman does. Ok, I don't like it, but I get it. They have to get it off of the deck, clean and package it, transport it to market, etc.
But why???? does the retailer need to make dang near as much as the guy risking his life to catch it???
I would dearly like to see how our product stacks up Vs. other products in the retailer's stores. How much of a percentage is the retailer making off of a lb. of beef? corn? chocolate chip cookie?
My guess is were paying a lot higher percentage, simply because we aren't as uniformly unionized.
Anybody at McDowell want to provide this comparison?
Bottom line is,,,when are product is selling for triple, or quadruple what we were paid for it on Pike St., means were getting dry sticked.

Anonymous said...

So the ASSMI report states that a pair of sockeye weighing roughly 12 pounds yields 2.3% roe, in other words, a little over 4oz. of roe per female sockeye. B.S.! Try doubling that. Two skeins of red roe are a hell of a lot more than some MickeyD's quarter pounder patty.

Ever wonder why everyone has to let the Japanese "oversee" the egg line? Smoke and mirrors, skimming and scamming.

25 YEARS AGO an egg tech told me that sockeye was selling for around $35 lb. on the street, and a pallet of roe was worth $250k.

ASPR 1st wholesale? That's the fox telling the farmer the health of the henhouse.

And, "...NEVER do anything but throw rocks..." Really? We work where you would die. The old whalers had a name for people like you, Landcrabs.

Anonymous said...

There is always something mighty fishy in the fishing industry.

Anonymous said...

Oh! Come on!....Even the salmon oil is being sold to dog food/snack manufacturers....Icicle? Trident? ...Negligible? Sure it is Andy!....smoke and mirrors as always....never trust the banker with your money....

Anonymous said...

We appreciate the spirited feedback.

We are often asked about the issues addressed in the bulletin. Who gets what, and what are the trends? We used what data was available to do the analysis.

Many of you raise very valid concerns. We'll take this opportunity to address them.

We chose to use COAR because it is the most inclusive data set available regarding 1st wholesale. It DOES include salmon oil and all other by-products. ASPR data does not include these by-products, and is not collected from sellers who sell less than 1 million pounds. Also, the data set does not always contain totals for each category, so you can't get actual total figures for each year. We found the difference between COAR and ASPR to be roughly $100 million in 2011. A lot of money to be sure, but fairly close given the total 1st wholesale value of salmon according to COAR was $1.417 billion. In other words, small to mid-size processors, direct marketers, and by-products make up roughly 7 percent of the total COAR value assuming both data sets use similar prices/volumes for other products.

To the fox/henhouse issue... We also track export figures for ASMI, these data are the result of a transaction between opposing parties; similar to fish tickets. They show a similar rising trend in value/lb, with fishermen receiving a growing share. However, narrowing exports down by species is difficult because salmon roe is lumped together. At any rate, overall, the export data support our findings.

As to the "street value" of sockeye roe. It's likely the $35 quote was per kilogram, or perhaps that was retail. In any case, I can tell you that the wholesale value for no. 1 grade sockeye sujiko at the Toyko Central Market is 4,000 yen/kg. That works out to roughly $18.30/lb, wholesale. That would be the very upper end of the range. There is a very efficient wholesale/retail market for salmon roe in Japan. Also, the roe recovery rate for sockeye is 4% (per 100 fish, given a 50/50 mix of males and females).

As to why the retailer gets so much. I agree, a retail job certainly doesn't have the same degree of danger, or romance, compared to fishermen. But consider the amount of canned salmon sold by a retailer in a given month. Let's say a store sells 5 cans per day, or 150 cans per month. That's only about $150 of net revenue (revenue less COGS) for an entire month. There are still many other expenses to consider. The US grocery market is very competitive, profit margins are very slim... on the order of 1 to 2 percent. So whatever the retailer takes is "fair" almost by definition because the market is so efficient. Sales volume, cost of labor/rent/taxes, and demand all play big roles in deciding retail markups.

Finally, the ex-vessel prices we used included post season bonuses and adjustments. This is why the analysis is done using 2011 data, final data is not yet available for 2012.

The notion that fishermen are getting a bigger share should not be surprising or provocative. Wholesale prices and demand for Alaska salmon is up in recent years, and as result processors have more revenue with which to compete for supply. When they have more money to compete, ex-vessel prices go up. If prices go down, fishermen may get a smaller percentage. The takeaway is that the data suggests benefits in the wholesale and retail market do flow through to the fishermen in the long run.

Andy Wink
McDowell Group

Anonymous said...


while talking to the egg tech, we converted kilos to lbs. , yen to $'s, $35 lb. for sockeye flesh NOT roe! No mistakes, just smoke and mirrors, or as you put it..." a very efficient wholesale/retail market for salmon roe in Japan."

Efficient, as in organized, almost sounds criminal.

What is the value of an egg in a Japanese sushi shop?

Anonymous said...

Chum roe for sale, producer/direct pricing, $60 lb.

Anonymous said...

What would be an even more interesting evaluation would be to also include the average cost break down.....a comparison of the cost of catching the fish vs. the cost to process it. Hmm. A salmon fishermen has to have a boat, insurance, permit, expensive gear, fuel and pay what, about 50% to a crew? All while the processor pays their workers minimum wage (only to the legals, I'm sure it's less to the illegals.) Yes they also have to pay for insurance and the plant operations. I would just love to see a true comparison report done....including roe prices etc. Otherwise this looks like a report coming from the Obama Administration!