Yikes, 2019! Where did that last year go? First, I would like to wish all of the SPC owner/members a Happy New Year.
In this edition, I want to focus on the halibut market. The last few years I have been mentioning the effect the east-coast Canadian halibut fishery and the farmed and wild European halibut fisheries have had on the Alaska halibut fishery and the markets. These “other” halibut fisheries have dramatically changed many of the Alaskan producers’ domestic markets. The main change is that these “other” halibut fisheries operate all year. That provides fresh halibut to customers all year. Meaning, our halibut competitors in Eastern Canada and Europe can offer fresh halibut to our customers November through March when our boats are off the water. Fresh halibut is the driver of the halibut market. If you are a halibut buyer who prefers fresh halibut, these all-year halibut producers offer a product that is tough to ignore. Even if you are a customer who prefers Alaskan halibut, it will be tough for these customers to ignore the all-year halibut producers. So, the result is we see our traditional, “loyal” Alaskan halibut customers make sure they spread their buying out between fresh Alaska halibut and the “other” halibut producers. This results in an overall decline of purchase volume of Alaskan halibut, fresh or frozen.
This has resulted in a shift for Alaskan producers and how they manage halibut sales during the year. In the past, creating a frozen inventory was not a problem because you could sell frozen during the months the Alaskan season was closed. Selling frozen halibut has become more of a challenge because of the pressure East-coast Canadian and European halibut create. Frozen markets still exist but they have dwindled. There is not the incentive for halibut customers to procur frozen halibut inventories for the off-season. Now, if they want, they just order fresh halibut. This market behavior has resulted in frozen halibut prices staying lower than what we have seen in the past during our non-producing months.
One of the changes this has caused is more pressure to move halibut out fresh as much as possible. SPC moved 70% of halibut out during the 2018 season. Several companies moved a greater percent. SPC will continue to expand our options in moving a larger percent of fresh product during the season. The addition of the new Alaskan Airline freighters has helped. We will continue to maximize this option in the future. In addition, we are trying to get Coastal Transport boats to pick-up in Sitka on a more regularly scheduled basis. Besides picking up frozen they can transport fresh halibut and off-load at Bellingham Cold Storage. This will require a more coordinated approach to specific delivery days to match up with this Coastal option. If we can get this option to work it is just as good as the over-the-road options some halibut plants are using who have road access.
Some additional options include fletching more of the halibut that comes in and put it into a form that the East-coast and European halibut generally don’t produce.
SPC does have some frozen halibut to move out but not as much as we have had in previous years. I think we can have most of it gone by the time the new season begins.
Please let me know if you have any questions.