An Overview of Alaska Pollock Markets

Transcription

1 An Overview of Alaska Pollock Markets Presented at Marine Science in Alaska 2006 Symposium Anchorage, Alaska January 24, 2006 by Gunnar Knapp Professor of Economics Institute of Social and Economic Research University of Alaska Anchorage

2 The University of Alaska Anchorage Institute of Social and Economic Research (ISER) has been studying markets for Alaska pollock. This research was initiated in 1999 with support from the Pollock Conservation Cooperative Research Center and has been continued with support from the North Pacific Fisheries Management Council

3 Goals of this research are to expand our basic understanding of Alaska pollock markets and our ability to analyze markets. Collect market data Learn what different data sources mean Track market conditions over time Disseminate market information to fishery managers, government and academic researchers, and industry Preliminary analysis of factors affecting production and prices The research stops short of formal econometric modeling of pollock markets but is intended to facilitate modeling efforts

4 This presentation provides a brief overview of trends in harvests, production, end-markets and prices for Alaska pollock.

5 Alaska pollock is a very large and important fishery. Alaska pollock accounts for more than one-third of total U.S. fisheries landings and about 7% of total U.S. ex-vessel value. 5,000,000 United States Landings of Pollock and Other Species 4,500,000 4,000,000 3,500,000 metric tons 3,000,000 2,500,000 2,000,000 1,500,000 All other species Alaska pollock 1,000, , Source: NMFS, Fisheries of the United States.

6 United States pollock harvests increased rapidly in the 1980s as pollock fishing in the US EEZ was Americanized. Northeast Pacific Harvests of Alaska Pollock, by Country 1,800,000 1,600,000 1,400,000 1,200,000 metric tons 1,000, , ,000 Other Countries United States 400, , Source: FAO "FAOSTAT+" database

7 Pollock harvests have been very strong for the past five years and are up significantly from the period. United States Alaska Pollock Harvests 1,600,000 1,400,000 1,200,000 1,000,000 metric tons 800, , , , Sources: ; NMFS Commercial Fisheries Landings data; 2004 & 2005: NMFS Alaska Region Catch Reports.

8 Harvests of pollock in Russian waters and total world pollock harvests--have declined drastically since The decline in totally supply has strengthened prices for U.S. pollock products even as U.S. harvests have been increasing a very favorable situation for U.S. producers! 8,000,000 World Harvests of Alaska Pollock, by Country 7,000,000 6,000,000 metric tons 5,000,000 4,000,000 3,000,000 2,000,000 Other countries Russia United States 1,000, ,972 1,974 1, , Source: FAO "FAOSTAT" database.

9 Share of Alaska Pollock Product Value, 2004 The most important products made from Alaska pollock are surimi, fillets, and roe. Minced fish 2% Other products 3% Fish meal 4% Surimi 26% In 2004, these three products accounted for 91% of product value. Fillets 34% Roe 31% Source: NMFS Economic Status Report, 2004, Table 25

10 Share of Alaska Pollock Product Volume, 2004 Pollock roe is a highpriced product which accounts for a high share of value, but only a small share of product volume. Minced fish, fish meal, and other low-priced products account for a relatively low share of value but a higher share of product volume. Fish meal 11% Minced fish 4% Other products 8% Surimi 39% Fillets 33% Roe 5% Source: NMFS Economic Status Report, 2004, Table 25

11 Production of all pollock products has increased since the late 1990s due to higher catches and higher yields since cooperative fishing began in 1999 and Fillet production has increased particularly rapidly as processors have increased the share of harvests going to fillet production.. 250,000 Annual Alaska Pollock Production, by Product (metric tons) Surimi 200,000 Fillets metric tons 150, ,000 50, Other products Roe Source: NMFS Pollock Products Data

12 The share of fillets in total Alaska pollock production has increased while the share of surimi has declined. The relative shares of different products vary for shore plants and catcher processors. 60.0% Share of Annual Alaska Pollock Production, by Product 50.0% 40.0% 30.0% Surimi Fillets 20.0% Other products 10.0% 0.0% Roe Source: NMFS Pollock Products Data

13 Pollock Fillet Markets Pollock fillet processing Photographs by Gunnar Knapp

14 Total Alaska pollock fillet production has more than doubled since the late 1990s, due to increased harvests, increased yields, and a shift from surimi to fillet production. Alaska Pollock Fillets Production 180, , , , ,000 80,000 Production 60,000 40,000 20,

15 Fillet production volume as a share of total harvest volume has more than doubled reflecting increased yields and a shift from surimi production to fillet production as fillet prices increased. Fillet Production Volume as a Share of Total Alaska Pollock Harvests 12.0% 10.0% 8.0% $/lb 6.0% 4.0% 2.0% 0.0% Sources: Harvests: ; NMFS Commercial Fisheries Landings data; 2004 & 2005: NMFS Alaska Region Catch Reports; Production: NMFS Economic Status Reports;

16 Most of the growth in fillet production has been skinless/boneless fillets. Annual Alaska Pollock Fillet Production, by Fillet Type 180, , , ,000 metric tons 100,000 80,000 60,000 40,000 Other fillets Skinless/boneless fillets Deep-skin fillets 20, Source: NMFS Pollock Products Data

17 Most of the increase in pollock production has gone to exports. The estimated volume going to the U.S. market has stayed about the same. 180,000 Alaska Pollock Fillet End-Markets 160, ,000 Exports metric tons 120, ,000 80,000 U.S. domestic market 60,000 40,000 20, U.S. domestic market estimated as total production minus exports Source: NMFS Fisheries Trade Data; NMFS Pollock Products Data

18 Most pollock fillet exports go to Europe. The most important export markets are Germany and the Netherlands. Alaska Pollock Fillet End-Markets 180, ,000 metric tons 140, , ,000 80,000 60,000 40,000 20,000 Exports to Other Countries Exports to Netherlands Exports to Germany U.S. domestic market Source: NMFS Fisheries Trade Data; NMFS Pollock Products Data

19 Alaska pollock producers face competition in the U.S. domestic market from imported twice-frozen pollock fillets and fillet blocks almost entirely Russian pollock processed in China. Estimated U.S. Consumption of Pollock Fillets, by Source 180, , ,000 Imports, frozen fillets 120,000 metric tons 100,000 80,000 Imports, frozen fillet blocks 60,000 40,000 20, Estimated U.S. production for domestic market Source: NMFS Fisheries Trade Data; NMFS Pollock Products Data

20 United States pollock fillets face competition in European markets from Russian pollock, much of which is processed in China. European Union Pollock Fillet Imports thousand metric tons Other countries USA Russia China Source: FAO Globefish, Groundfish Commodity Report, 2005.

21 With federal funding from the Alaska Fisheries Marketing Board, Alaska pollock producers have begun a Genuine Alaska Pollock Producers marketing campaign to promote Alaskaharvested Alaska pollock as sustainably managed and superior to twice-frozen Russian pollock. Source:

22 Alaska pollock also competes in world fillet markets with numerous other groundfish species. World Groundfish Production 12,000 thousand metric tons 10,000 8,000 6,000 4,000 Other species Argentine hake Saithe Atlantic cod Blue whiting Alaska pollock 2, Source: FAO Globefish, Groundfish Commodity Report 2005

23 After peaking in 1999 and crashing in 2000, fillet prices have been relatively stable in recent years. Average First Wholesale Prices of Alaska Pollock Fillets $1.80 $1.60 $1.40 At-Sea Deep-Skin Fillets $1.20 $1.00 At-Sea Other Fillets $/lb $0.80 $0.60 $0.40 $0.20 $ Shore Plant Other Fillets Average export price, frozen fillets Source: NMFS Economic Status Reports, 2000, 2003 & 2004.

24 In late 2005, market conditions for Alaska pollock fillets were relatively strong. Average U.S. Monthly Export Prices: Frozen Fillets $1.20 $1.00 $0.80 $/lb $0.60 $0.40 $0.20 $0.00 Jan-02 Jan-03 Jan-04 Jan-05 Jan-06 Solurce: NMFS Fisheries Trade Data

25 Factors affecting pollock fillet markets Supply of pollock from harvests in Russian waters Supply of other wild whitefish Supply of farmed whitefish (tilapia and cod) Changing demand for whitefish fillet products Declining demand for fish sticks Increasing consumer health consciousness Marketing Certification of Alaska pollock by Marine Stewardship Council Genuine Alaska Pollock Products marketing campaign Shift in processing to China and other low-labor cost countries

26 Pollock Surimi Markets Pollock Surimi Processing

27 Alaska pollock surimi production has risen only slightly since the late 1990s. Rising harvests and yields have been offset by a shift from surimi to fillet production. Alaska Pollock Surimi Production 250, , , ,000 Production 50,

28 U.S. surimi exports have increased since the late 1990s. Most U.S. pollock surimi production is exported. 250,000 Alaska Pollock Surimi End-Markets Exports 200,000 metric tons 150, ,000 Estimated U.S. domestic market 50, U.S. domestic market estimated as total production minus exports Source: NMFS Fisheries Trade Data; NMFS Pollock Products Data

29 Most pollock surimi exports go to Japan and South Korea. Exports to South Korea are increasing. Alaska Pollock Surimi End-Markets metric tons 250, , , ,000 Exports to Other Countries Exports to South Korea Exports to Japan 50,000 Estimated U.S. domestic market Source: NMFS Fisheries Trade Data; NMFS Pollock Products Data

30 Pollock surimi competes in world markets with surimi made from other species. In the Japanese markets, threadfin bream surimi from Thailand and India accounts for an increasing share of supply. Japanese Surimi Imports 250, ,000 Cod surimi metric tons 150, ,000 Threadfin bream surimi 50, Pollock surimi Source: BANR Japanese Imports Data; NMFS Japanese imports data

31 Surimi wholesale prices declined between 1999 and 2001, but have since been relatively stable. Average First Wholesale Prices of Alaska Pollock Surimi $1.40 $1.20 $1.00 Wholesale price, at-sea production $/lb $0.80 $0.60 $0.40 $0.20 Wholesale price, shore plant production $ Average export price Source: NMFS Economic Status Reports; NMFS Fisheries Trade Data

32 Market conditions for pollock surimi were relatively strong in Average U.S. Monthly Export Prices: Pollock Surimi $1.20 $1.00 $0.80 $/lb $0.60 $0.40 $0.20 $0.00 Jan-02 Jan-03 Jan-04 Jan-05 Jan-06 Solurce: NMFS Fisheries Trade Data

33 Factors affecting pollock surimi prices Supply of surimi from other sources Russian pollock Other whitefish Threadfin bream Changing Japanese demand for traditional surimi-based products Changing demand for surimi-based products in other markets Exchange rates

34 POLLOCK ROE MARKETS Pollock roe before processing Photograph by Gunnar Knapp

35 Alaska pollock roe production has increased by about 60% since the late 1990s. Alaska Pollock Roe Production 30,000 25,000 20,000 15,000 Production 10,000 5,

36 Almost all United States pollock roe production is exported. United States Pollock Roe Reported Production and Exports 30,000 25,000 20,000 metric tons 15,000 10,000 Production Exports 5, Sources: NMFS Pacific Cod and Pollock Production data; NMFS trade data. Note: 2005 data are through September (trade data) and early November (production data).

37 Most pollock roe exports go to Japan and South Korea. Exports to South Korea have increased dramatically in recent years. United States Pollock Roe Exports by Country 30,000 25,000 20,000 metric tons 15,000 10,000 Other South Korea Japan 5, Source: NMFS trade data data are for January-September.

38 A large share of United States pollock roe production is sold at auctions held each year in Seattle. There are numerous different grades of pollock roe, which command widely varying prices. Auction prices for Westward Seafoods pollock Roe at a March 2004 auction, as reported by a Japanese Seafood Industry Newspaper Source: Bill Atkinson s News Report, Issue 1091, March 23, 2005

39 U.S. pollock roe competes in Asian markets with Russian pollock roe. Although U.S. production has increased, total pollock roe supply has decreased because of declining Russian harvests. Japanese Pollock Roe Imports (metric tons) 60,000 50,000 Low supply in 2000 caused a price spike. 40,000 metric tons 30,000 20,000 10, Other countries Russia United States

40 Prices for pollock roe can vary widely from year to year reflecting variation in production and inventories. $10.00 Annual Average Prices for Frozen Pollock Roe $9.00 $8.00 $7.00 Average Japanese import price $/lb $6.00 $5.00 $4.00 $3.00 Average first wholesale price, at-sea production $2.00 $1.00 $ Low supply in 2000 caused a price spike Average first wholesale price, onshore production Sources: NMFS Economic Status Reports; NMFS Japanese Fisheries Imports data

41 Historically, Japanese wholesale prices for pollock roe have been inversely related to total supply. Estimated Total Japanese Pollock Roe Supply and Average Import Price of Frozen Pollock Roe 100,000 2,500 Estimated total supply (metric tons) 90,000 80,000 70,000 60,000 50,000 40,000 30,000 20,000 Supply Price 2,000 1,500 1, Average annual import price (yen/kilo) 10, Source: BANR Japanese Fisheries Imports Annual Summaries; Supply estimates reported in BANR Issue 1117 (10/12/05).

42 Market conditions for pollock roe in 2005 were similar to 2004 and Average U.S. Monthly Export Prices: Pollock Roe $7.00 $6.00 $5.00 $/lb $4.00 $3.00 $2.00 Note: Figure excludes prices for months with total exports of less than 100 metric tons $1.00 $0.00 Jan-02 Jan-03 Jan-04 Jan-05 Jan-06 Solurce: NMFS Fisheries Trade Data

43 Factors affecting future pollock roe markets Supply of pollock roe from Russian harvests Yen-dollar exchange rate Japanese and Korean consumer tastes for traditional and new pollock roe products

44 CONCLUSIONS... World pollock markets are complex. Many different products are sold in many different markets affected by many different factors.. U.S. pollock harvests Russian and other countries pollock harvests (mostly from Russian waters) Japan pollock roe market South Korean pollock roe market Japan surimi market U.S. surimi market Global harvests of other whitefish Global harvests of other species used for surimi production Chinese reprocessors Other surimi markets U.S. fillet and block market European fillet and block markets

45 CONCLUSIONS: Overall, the pollock industry is doing well. Strong catches and prices combined for a record wholesale value of $1.1 billion in Annual Alaska Pollock First Wholesale Value millions of dollars Other products Fish meal Minced fish Roe Fillets Surimi Source: NMFS Pollock Products Data

46 CONCLUSIONS... Pollock markets are diversified Having a variety of products helps to stabilize total value Processors can shift production to products for which prices are more favorable Prices for different pollock products can vary widely over time Important factors affecting prices include: Alaska pollock harvests and production Russian pollock harvests and production Other whitefish harvests and production Potential for growing farmed whitefish supply Non-pollock surimi supply Changing demand conditions Marketing Exchange rates