Dear SPC members,
For the next couple months, I will try and spend time on specific market areas and products in each addition. If something is timely, I will of course address those subjects as well. If you have any specific question or have a topic you want addressed, please let me know and I’ll try and answer you specifically or include my response in a future market report. This report will focus on albacore tuna and black cod.
The albacore harvest the past two years has been below average. The 2018 fishery started off ok but dwindled toward the end with sporadic fishing and small “peanut” size fish harvested. Most of the fleet was off the water by end of September. Members did deliver more product to the Co-op this year than 2017. We received enough stock to cover all our major customers as well as some extra product to explore new markets. Dock prices were down from 2017 and they didn’t change much from the beginning to the end of the season. The good side of this year’s dock prices is it broadened the market with more people purchasing our products.
SPC’s albacore sales consist of whole frozen 15#/up albacore, frozen vacuum-packed loins, and canned albacore. Our members do a great job bringing in quality product. We get many complements from customers who buy SPC albacore loins and canned albacore. We are in the process of shipping up some canned product to the Sitka plant. We hope to send up some loins in a few weeks.
As a reminder to our albacore boats or anyone thinking of going albacore fishing in 2019, SPC only takes bled, blast-frozen albacore. Our unloading locations include Newport, OR, Ilwaco, WA; Westport, WA: for orders.
The black cod market this year was positive for SPC. Yet, at the same time has been one of the strangest markets I have ever seen. The black cod market can be divided into two size groups. Those fish under 5lb. and those over 5 lb. The market for under 5lb black cod is Japan and China with some minor markets in the US and Europe. Markets for over 5 lb. consist of Hong Kong, Singapore, US, UK, Europe and Dubai. As we have reported all year Japan had real problems in 2018. The first part of the year they did not buy anything as they were trying to sell expensive 2017 inventories. They finally sold most of those inventories by August but lost a tremendous amount of money in doing so. When they were ready to buy, their purchase prices were very low, and those prices have stayed that way to the present time.
Below I have included a graph from Seafood News Japan. It is a graph that shows the monthly wholesale price movement of 4-5# size in kg from 2015 to 2018. The 2018 movement is colored in red. This says that the 2018 price is less than 600 Yen/kg less than 2017 prices. The 2018 price is still the lowest in last 4 years.
Going into next year is a puzzle. If their markets have hit “bottom” then we will see their prices come up. If not, the Japanese prices will remain down. I personally don’t see the Japanese market very bullish again next year at least until they run out of inventory. The Chinese market provided SPC a better option in 2018. We were able to market a sizeable amount of our under 5lb fish and get better prices. Despite the political and tariff issues between the US and China, we have maintained a good relationship with our customers and continue to make sales into that market. We want to pursue the Chinese market next year but with caution given the political/tariff issues. Our Chinese customers say they want to increase purchases in 2019. That is good for SPC but at the same time, we will want to reestablish our market relationships in Japan and try and move more product to them in 2019.
The dock prices for under 5 lb. fish did not change much from the beginning of the season to the end. The over 5 lb. sized black cod prices did move up during the season. They began at levels below where they ended in 2017. However, by the end of the 2018 season they were back to levels close to 2017 numbers. The larger fish percent started off the season well below our average. The average of under 5 lb. fish was much higher at the beginning of the season. By the end of the season our size percentages were very close to normal as we saw a good percent of larger fish harvested at the end of the season. Sales of the larger sized fish have gone well through about November. After that, most customers had purchased what they needed to get through the Holiday season. The size that is selling more slowly now is the 5/7 fish. The price between 7/up and 5/7 is not that great, so customers would rather pay a little more and get the 7/up sizes. Those actions have left some of the processors with larger than expected 5/7 inventories. Some of those processors have started to drop their prices on those sizes to move them out. At this time, SPC has a few pounds of inventory but not expecting a problem to move them out.
I would like to wish all our SPC owners a very Merry Holiday Season and a great and healthy New Year. Thank you for all your support.