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Tuesday, December 21, 2021

Alaska North Pacific Fishery Management Council December 2021 Newsletter North Pacific Fishery Management Council - December 2021 December Departures At this meeting the Council bid farewell to longtime SSC member and recent co-Chair, Dr. Anne Hollowed. Dr. Hollowed has played a significant role in the Council’s science-based fishery management over the past 19 years she has been with the SSC, and has contributed to the development of many of the management programs the NPFMC has in place today. Thank you, Anne, and best wishes in retirement. Prime Time: Alaska native community proposes co-managed marine sanctuary National Fisherman by Jessica Hathaway - December 20, 2021 Citing observable and worrisome marine ecosystem changes, the Unangax̂ (Aleut) community of St. Paul Island has proposed co-management with the federal government and the community of St. George Island of a new marine sanctuary around the Pribilof Islands of Alaska, “encompassing 100 nm centroid boundaries around the two inhabited islands of St. Paul and St. George,” according to an official nomination proposal that was released Monday, Dec. 20. National REPORTER: 2021 Turns The Tables On National Seafood Month Urner Barry by Lorin Castiglione - December 21, 2021 This article was originally featured in the Winter 2022 Edition of Urner Barry's Reporter magazine. Usually, the line around the industry goes, “October is National Seafood Month for a reason.” Historically, seafood items trend lower as the weather cools and holiday season begins. But things are different in 2021. Many seafood products trended up in October, with some hitting all-time highs in the process. Nearly all items which experienced upward pricing pressure during the month felt the impacts of rising shipping costs, lack of container availability, and the litany of logistical headaches the seafood industry has been facing. Frozen Tuna The frozen tuna market has experienced upward price pressure since late Q2 2021, just as the foodservice sector made a remarkable return. With limited inventory in the pipeline, many market participants were left scrambling to fill the constant demand. Importers’ inability to secure product and build meaningful inventories has been an unending challenge. Market prices for frozen 6 oz. tuna steaks are trading 50.81% higher since the beginning of the year. The supply chain crisis has been disruptive, to say the least. Logistical hurdles such as container shortages, rising replacement and freight costs, port congestion and shipping delays remain firmly in place. And according to market participants, there appears to be no end in sight. These obstacles are only heightening the supply constraints. Imports of frozen tuna fillets have been steadily increasing year-over-year since 2014, in large part due to the steady demand requested from foodservice. Peak imports occurred in 2019, registering 90 million pounds, and falling to 73 million the following year due to the COVID pandemic. Year-todate (January-August) frozen tuna fillet imports from all countries registered 53.6 million pounds, an 8.4% increase yearover-year, yet lagging 12.9% compared to year-to-date 2019. The two largest supplying countries, Vietnam and Indonesia, have both struggled with rising COVID cases, which has impacted production and processing capabilities. While peak production in Vietnam has ended, market participants are looking to Indonesia for supply. Although raw material in Indonesia is currently not an issue, lingering COVID cases which impact labor, the shortage of containers in the host country, and the uncertainty of port destination, is unnerving the market. Importers have raised market prices in the hopes of slowing down demand, protecting in-house inventories and ensuring commitments are fulfilled. The rising cost of doing business, from freight to cold storage, to replacement costs, is price supportive. An October slow-down would be welcome if it offers a chance for importers to build inventories and replenish dry pipelines. Importers are looking down the line for the Lenten season. If demand remains unabated and logistical challenges continue, the market will remain unsettled. Snow Crab After several months of a steady market, in October the Canadian snow crab marketadjusted higher on 5-8s and 10s in reaction to the quota reduction out of Alaska for the 2021-2022 season. Alaska’s season technically starts in October, but much fishing does not typically take place until closer to the end of the year. This year, the quota has been reduced by almost 90%. After the official announcement was made on October 11, the market which was holding steady to full steady, started to adjust higher given the news. Market participants will now have to rely on sourcing Canadian snow crab inventories from the previous season and Russian product before the next major chunk of crab out of Canada is available, most likely in mid-to-late April, depending on the weather. The undertone heading into November remains full steady. Most years during the month of October the snow crab market will primarily be flat. But due to the news out of Alaska this year, there is upward pricing pressure on the market. Tilapia Tilapia frozen fillets from China have been experiencing strong upwards pricing pressure due to a myriad of factors. Contributing to the recent bullish tone of the market includes the steep rise in freight costs, little to no container availability or vessel transport, mounting shipping delays, port congestion, elevated feed costs, and labor issues throughout the supply chain, to name a few. All these circumstances attribute to the steep rise in replacement costs for the species overseas. Additionally, added supply constraints on larger sized fillets have emerged. This is because farmers had to harvest earlier than planned due to a drought in the producing country during the last harvest, which resulted in less raw material supply for 7-9 ounce sized fillets and larger. Because of this, larger sized fillets are running thin, with some industry players completely out of inventory. This is placing added pressure on the smaller 5-7 ounce and 3-5-ounce sized fillets. Demand remains active from the retail sector, as well as on the foodservice side, supporting the premiums. Lobster Like many other seafood items, all lobster product forms have been trading at or near their 52- week highs during October. The acceleration in demand in Q1 of 2021 amid a constrained supply and empty pipeline has been the catalyst for these unprecedented price levels. New England hard shell halves are trading at an average price of $13.50; 31.45% higher than their 3-year average price of $10.08 for this time of year. Competition for raw material this past spring, from both processors and the live market, set the stage for aggressive acquisition pricing. Depending on the region, the shore price for the Canadian spring season opened between CAD$10.00-$12.00, fluctuated lower to CAD$8.50, and closed the season at CAD$11.00. Last year, as a comparison, the shore price was in the CAD$4.50-5.50 range. Year-to-date (January-August) live lobster imports from Canada registered 35.3 million pounds, up a slight 1.1% year-over-year. However, they are trailing their 5-year average by 15%. Year-to-date (January-August) lobster meat imports from Canada registered 15.18 million pounds, a 47.72% increase over their 5-year average of 10.3 million pounds. The combination of empty freezers and the insatiable demand for lobster meat carried well into the summer months and beyond. Processors dictated and remained active throughout the Maine fishing season, securing product at a record pace. It was challenging as they struggled to keep up with day-to-day sales and building meaningful inventory. Vying for supply has kept Maine boat prices firm, while restricting live lobster selling margins. Maine new shell halve prices are trading at an average price of US$9.50, 41% higher than its 5-year average of US$6.74 for this time of year. At these elevated prices, little opportunity presented itself for retail specials. Currently, the live market is entering a seasonally slow time. Typically, hard shell market prices retreat as more fishing zones open. The Canadian LFA 35 zone opened for fishing on October 15. Traditionally a small producing zone—roughly 3.5 to 4 million pounds for the fall season—many are hoping that any added supply will help alleviate elevated pricing pressure. However, the pent-up demand for product saw the opening day shore price hit CAD$11.00, where it remains. With little live interest to motivate the market, will prices retreat or will processors continue their pursuit to build inventory? Will the seemingly unabated demand for frozen tails and meat continue? Until we see substantial landings, most likely from the Canadian LFA 33-34 which opens at the end of November, the market will remain firm. Scallops With the 2020 and 2021 Atlantic sea scallop seasons producing a smaller size mix of landings typically seen in previous years, wholesale prices have sharply increased from seasonal norms, hitting new record highs week after week. For the most constrained size, all-natural U/10s are demanding upwards of almost $17.00 per pound higher than just one year ago. Pricing across all sizes and moisture contents continue to strengthen amid diminishing landings brought in at the auction, resulting in higher boat prices. With the highest premiums and lowest supply surrounding U10s, the focus has turned to securing 10/20 counts. Partners of the Scallop Research SetAside Program and Northeast Fisheries Science Center recently conducted extensive scallop surveys this year on the Georges Bank and in the Mid-Atlantic. They reported diminishing biomass to the New England Fishery Management Council. According to the October 1 NEFMC press release, no evidence of a strong incoming year class was found. The conversation is now focused on possibly establishing two new scallop closure areas in Framework 34 to protect concentrations of smaller developing scallops in the New York Bight and Nantucket Lightship West areas. An estimate of projected landings for the 2022 fishing year, beginning on April 1, 2022, has yet to be established. However, based on the survey findings, next year’s landings are anticipated to be lower than 2021. Less domestic supply into the market lays the groundwork for pricing to remain firm if the active demand on the market remains intact. Salmon For the farmed salmon complex, during the month of October the market was steady out of Chile for fresh fillets and rising out of Norway and Scotland. On the other hand, the Canadian market weakened on small to mid-sized fish consistently through the month. Eventually, this trend spread throughout the farmed salmon complex and the last week of the month saw Chilean fillets and Norwegian whole fish move lower with downward pricing pressure noted from the Canadian whole fish market. From a historical perspective, the Chilean fresh fillet market performed quite well this year during National Seafood Month. In looking at the 5-year average, we typically see a drop in price throughout the month. This year, however, the market for Chilean fresh fillets stayed extremely stable. Market participants credit much of this stability to the strength of the retail market. Even with retail promotions or buying opportunities down 13.7%, the overall average retail price is only up 4.2% over last year, and the average retail price for 2021 is lower than the average prices during both 2018 and 2019. International Global Seafood Alliance Study: Nearly 40% of Consumers Looking to Swap Meat for Seafood SeafoodNews - December 21, 2021 A recent study conducted by Changing Tastes and administered by the Global Seafood Alliance (GSA) found that 39% of consumers are looking to substitute meat with seafood. The research targeted 3,000 U.S. adult consumers and 400 decision-makers in foodservice. Nearly one-third of respondents said they are “substantially” interested in eating less meat including beef, pork and lamb. To replace those items, seafood topped the list with 39% with poultry falling right behind at 35%. For those looking at seafood more, the GSA noted that eco-labels that promote sustainability and responsible production were top of mind for consumers. According to the research, 46 percent of U.S. consumers have favorable views of retail channels that display the Best Aquaculture Practices (BAP) label, while 64 percent of consumers would choose products with the BAP label over other proteins. Among operators in foodservice, 56 percent of operators have favorable views of distributors that use the BAP label, per the GSA. “We see a large segment of American adults ready to eat more fish and seafood if only their concerns about ocean health issues like antibiotic use in aquaculture, the presence of microplastics and industrial chemicals and forced labor at sea are addressed. For younger adults, notably Millennials and Gen Z’ers, they see their health connecting the health of our oceans through eating fish and seafood, and this is a much broader understanding of ‘healthy eating’ than just nutritional benefits. The BAP logo and GSA’s broader set of offers are well positioned to help shift our protein choices toward the oceans,” said Arlin Wasserman, founder and managing director of Changing Tastes. Millennials were part of the trend towards increased seafood consumption. 58% of the largest generation by population eats seafood at least once a week and 27% eats at least once or twice a month. Millennials also have the highest recognition of the BAP label as well as the greatest trust of seafood eco-labels, the GSA noted. “Our research confirmed that consumers value the assurances that the BAP certification program delivers. We believe that education is key. This includes information about responsible sourcing and the BAP program as well as where to buy, how to prepare and what makes fish and seafood so good for me,” said Sherri Clerk, GSA’s brand strategist and a Registered Dietitian, who has done brand strategy for major food brands, including Hormel Health Labs, McCain Foods and High Liner Foods. Environment/Science Retraction: Study of marine protected areas deemed flawed with conflict of interest National Fisherman by Jessica Hathaway - December 16, 2021 Sometimes fishermen get lucky, and their complaints about flawed data get noticed by scientists. Such was the case with an article about Marine Protected Areas that’s been used to justify a new push for ocean zoning — including the recent 30x30 initiative to shutter up to 30 percent of the nation’s waters. Pacific Seafood Processors Association 1900 W Emerson Place Suite 205, Seattle, WA 98119 Phone: 206.281.1667 E-mail:; Website: Our office days/hours are Monday-Friday 8:00 A.M. - 5:00 P.M. In accordance with Title 17 U.S.C. Section 107, any copyrighted work in this message is distributed under fair use without profit or payment to those who have expressed a prior interest in receiving this information for non-profit research and educational purposes only. *Inclusion of a news article, report, or other document in this email does not imply PSPA support or endorsement of the information or opinion expressed in the document.


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