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Wednesday, August 11, 2021

Alaska COVID-19 threatened Alaska’s fishermen. Here's how they persevered. In the Bristol Bay fishing region, efforts developed in response to COVID-19 seem to have paid off. National Geographic by Ash Adams - August 10, 2021 Bristol Bay, AlaskaCommunities in this rural fishing region, site of the world’s largest sockeye salmon run that draws thousands of workers each year, are defined, in part, by their isolation. Everything is a plane ride or more away, including medical care, food, and supplies. The largest hospital in the region has little more than a dozen beds to serve a combined population of about 7,000. * Requires subscription West Coast Coast Guard Cutter Alert completes successful fisheries patrol off WA, OR coasts News Release U.S. Coast Guard sent this bulletin at 08/09/2021 ASTORIA, Ore. — The Coast Guard Cutter Alert and its crew returned to homeport in Astoria Saturday after completing a 60-day law enforcement patrol, during which the crew enforced federal law and safety regulations aboard commercial fishing vessels operating within the United States Exclusive Economic Zone off the coasts of Washington and Oregon. National US anti-IUU bill would expand SIMP to cover all imported seafood Seafood Source by Chris Chase - August 9, 2021 A recent committee meeting started the discussions on a bill introduced by U.S. Rep. Jared Huffman (D-California) to combat illegal, unreported, and unregulated (IUU) fishing and slave labor in the seafood supply chain. Federal Register Fisheries Off West Coast States; Modification of the West Coast Commercial Salmon Fisheries; Inseason Actions #22, #23, and #24 A Rule by the National Oceanic and Atmospheric Administration on 08/11/2021 NMFS announces three inseason actions in the 2021 ocean salmon fisheries. These inseason actions modified the commercial and recreational salmon fisheries in the area from the U.S./Canada border to the Oregon/California border. Opinion The Winding Glass: Seafood Inflation May Be Less Than Meets the Eye by John Sackton, Founder, SeafoodNews - August 10, 2021 [The Winding Glass is the opinion and commentary column by John Sackton, Founder of SeafoodNews] In the past couple of weeks, several news stories have highlighted the difficulty some restaurants are having coping with higher seafood prices. “Very few products are not going up in price,” Santa Monica Seafood President and CEO Roger O’Brien told SeafoodSource last month. The price inflation in the distributor, processor and foodservice operator’s sales to foodservice customers alone was a “whopping 29 percent” in June, O’Brien said. This surge was a result of a perfect storm hitting the industry all at once. First, seafood demand has continued to be strong at retail, so retailers have continued with expanded seafood programs. Secondly, restaurants have been inundated with more customers than staff can handle as it appeared in the early part of the summer that the pandemic might be behind us. This has led to a surge in restaurant orders as operators geared up for robust reopening sales. Third, logistics and labor problems resulting from the pandemic have not abated. There are not enough truck drivers. Port congestion is still adding time and costs for every imported seafood container. In the current environment, many front-line workers have become pickier about what jobs they will take and at what pay. This is forcing business owners to pay higher costs or cut back on sales or both. At the same time, the trucking industry has relied on independent drivers who get paid by the mile; if congestion and port problems double the time required for a job, drivers’ pay is effectively cut in half. As a result, drivers quit for other work, and there is a real shortage. These logistical problems are not just in seafood. In Nantucket, where I am this summer, the airport ran out of jet fuel last weekend because the fuel companies on the mainland could not get drivers. The fuel trucks must meet a ferry schedule, and drivers were not available. Fourth, as COVID has re-emerged in Asia, new work restrictions and requirements that factory workers remain permanently on-site have cut capacity. For example, over 100 seafood factories are closed in Vietnam due to a lockdown imposed by the government. Factories can continue to operate only if workers eat, sleep and work on site, and only 82 seafood factories can meet this requirement. VASEP (Vietnam Association of Seafood Exporters) reports that even those that can do this can only operate at 30% to 50% capacity. Fifth, and finally, demand for some seafood items has increased well over what can be supplied under normal circumstances from wild-caught fisheries, especially high-value marquee species like lobster, king crab, and snow crab. This perfect storm of price inflation has forced some restaurants to cut items from their menus. Bloomberg reported on a number of restaurants that have pulled signature items off the menu, including crabmeat, and crab legs. Having an item dropped from the menu is a supplier’s worst fear, as it permanently cuts off a customer for that product, and there is no guarantee that the item will get back on the menu. In today’s environment, some distributors short on inventory may welcome the reduction in customers, but long term it has traditionally been a flashing yellow light for the industry when major buyers give up on a category. Menu development takes time, and once an item is gone, there is no guarantee it will return. The pandemic was already forcing menu consolidation. Now labor, price and supply issues are pushing menu consolidation even further. Previous prices spikes that caused wholesale discontinuations of a menu item have had years’ long impacts. For example, in the 1986 McDonald’s decided to introduce a limited coldwater shrimp sandwich item, similar to the popular shrimp sandwiches in the UK. At the same time, there was a slight reduction in supply. The resulting price squeeze pushed up coldwater shrimp prices 50% or so, McDonald’s dropped the promotion, distributors began convincing their customers that warm water salad shrimp was a good substitute, and it at ten years or more before coldwater shrimp price rose to that level again. Another example is Darden’s use of snow crabmeat. Twenty years ago, Darden purchased millions of pounds of snow crab meat from Newfoundland every year, supporting a large factory workforce involved in picking crabmeat. But as the price of sections rose, crabmeat prices went over $10.00 (seen as very expensive at the time). Darden revamped its entire Red Lobster menu in response. From over 20 items with snow crabmeat, the new menu cut that down to 2, and no longer promised snow crab meat. The meat-picking industry in Newfoundland collapsed. Today, the volume of snow crab meat is miniscule compared to what it used to be, and companies that need it now for specialty orders will have it packed in China and reshipped to the US. The point is that menu adjustments can sometimes lead to permanent changes. However, this bout of seafood price inflation may be overblown. If it is the result of a perfect storm of individual factors, once some of those factors recede, so should sense that seafood can be sold at almost any price. Right now we are likely at the half-time of the pandemic, not the final quarter as many of us assumed. So we have no visibility as to which special factors, from transportation, to labor, to consumer buying patterns, will become permanent, and which will be temporary. In researching this column I did a comparison among the major seafood items to see if there was a bifurcation and whether only certain items were driving the headline price increases. This very much proved to be the case. Chart showing percentage change in price since 1/1/2019 of various seafood items (Source Urner Barry's Comtell). Snow crab, lobster meat, and tilapia all have increased in price at phenomenal rates compared to 2019. For tilapia, this is largely due to the pandemic supply and shipping disruption. For crab and lobster, it is due to excessive demand spurred by strong retail and foodservice sales. But other seafood items are behaving more normally, even if they are up in price. Farmed salmon, for example, is very expensive right now, but has historically been volatile, and when production comes back, prices will return to their historic averages. Shrimp, meanwhile, is trading below its price in 2019, according to the UB white shrimp index. Again, production disruptions could change this, but after years of record shrimp imports, the US market is well supplied to meet retail and foodservice needs. Pollock has also increased in price, based on a lower supplies from China. For example, the European Union only could buy 67% of the pollock fillets it usually gets from China in the first half of 2021. So prices continue to go up. However, once the pandemic disruptions are accounted for, the permanent price increases are likely to come in at a much lower level. The wildcard for any seafood price outlook is not what happens in the US, but the strength of demand for the same products in China and Europe. China’s demand for lobster year to date (through June) is double that of 2020 and is one-third higher than 2019. This has contributed to the overall demand for lobster. In summary, this bout of price increases is very much a pandemic phenomenon, which means things may look different to seafood sellers in twelve to eighteen months. Nevertheless, the real-world effects of price increases, in terms of menu adjustments, consumer change in tastes, and total volume sold through foodservice all can have lasting impacts. It's just not possible to predict the strength of those impacts at this time. 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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