July 25, 2005
Monday

ANCHORAGE, Alaska - Three years ago, Alaska's commercial salmon industry was barely clinging to life.

The total dockside value for the state's catch in 2002 was $163 million, a 73 percent plunge from the tally a decade earlier. Hundreds of fishermen were dropping out of the business. Packing plants were closing. A bedrock Alaska industry with more than a century of colorful history was wobbling under heavy debt and poor prospects for profit.

The industry faced two demons. First, foreign fish farmers had conquered markets Alaska's wild-caught salmon once owned. Second, the Alaska industry - with all its expensive boats, nets, canneries and intricate regulations - found it hard to compete.

Today, amid a new summer bounty of kings and sockeyes and pinks, many observers believe the commercial salmon industry has moved off life support and is beginning to breathe easier.

The turnaround appears due to a combination of government-subsidized marketing, bad press for farmed salmon and an increasing appetite for wild salmon. Maybe most important - and credit the farmers for this - more Americans than ever are thinking salmon for dinner, whether it's from the Copper River or a net pen in Chile.

"Three or four years ago, I was pretty concerned," said Jim Kallander, a Cordova commercial gillnetter and past chairman of the Alaska Seafood Marketing Institute. "But I'm not anymore."

Among the bright spots for the industry:

- Alaska's salmon harvest brought $236 million last year, up 45 percent from the low point in 2002. Prices to fishermen seem to be edging higher this year, and salmon runs are strong in most places, including the most important fishery at Bristol Bay.

- Publicity about purported contamination, pollution and other problems associated with salmon farming has stoked consumer demand for wild salmon. A telling sign was a recent New York Times article that said salmon sold as "wild" in six of eight New York City stores actually tested as farm-raised.

- People are paying bigger prices for the right to go commercial salmon fishing in several of Alaska's regional fisheries. At Bristol Bay, drift gillnet boat permits selling for less than $20,000 three years ago now go for more than $49,000. It's a far cry from the salmon heyday of the late 1980s, when the permits cost $250,000. But today's rising permit values are a strong indicator of optimism in the fisheries, said Gunnar Knapp, an economist at the University of Alaska Anchorage.

Improvement, however, remains spotty around the state, and Alaska fishing and political leaders have much work to do before the industry can proclaim its salmon salvation, Knapp said.

"Much or most of the industry has experienced only a modest rebound," he said.

The predominantly foreign salmon growers have gone from hardly any production in the early 1980s to more than 1.2 million metric tons annually, or three to four times the Alaska catch.

State lawmakers in 1990 banned fish farming in Alaska, and the politicians and commercial fishermen remain fervently committed to that policy. They've focused instead on trying to reform the fishing industry to survive in the new world salmon order.

In early 2003, the state launched a "revitalization strategy" using $50 million in federal money lined up by Sen. Ted Stevens, R-Alaska. The money has been used for everything from paying the food and heating bills of struggling fishermen to subsidizing the marketing efforts of top Seattle-based seafood companies that clean, freeze and can Alaska's salmon catch.

Other changes have included revamping the Alaska Seafood Marketing Institute, a state agency with representatives around the United States and in Asia and Europe. Federal regulators also have started requiring labels to help consumers differentiate between farmed and wild seafood.

More radical changes are under consideration to improve the industry's economics, including permit buyouts in fisheries with way more boats than necessary chasing the fish. Fewer boats mean better fishing and more dollars to go around for those remaining.

In addition to the Copper River salmon, the state offers at least eight other salmon "brands," including Aleutia sockeye from the western Alaska Peninsula, Castle Cape Reds from Chignik, Kenai Wild salmon from Cook Inlet, and RealSalmon and Rainforest Wild from Southeast. The goal is to win a following among high-end restaurant and grocery buyers.

Many players believe regional marketing is key to saving the Alaska industry, while also breaking its habit of producing too many bruised, broken and scarred fish during hectic summer harvests. The farmers can take their time, and have a reputation for producing not only cheap but eye-pleasing salmon.

"Quality comes first," said Bob Waldrop, a consultant who is helping fishermen build a Bristol Bay Wild brand. "You have to give the customer a reason to pay more. You can't just say it's good. It has to be good."

In Cordova, Copper River fishermen are attaching a stamp-sized plastic tag to each fish saying, in English and Japanese, "Genuine Wild Alaskan Copper River Salmon."

The idea is stop "imposter fish" like those in the New York Times article, said fisherman Kallander.

Marketing buzz notwithstanding, the Alaska commercial salmon industry remains in a depression. The annual value of the catch is far below the 1988 peak of $782 million - though some would argue that year was itself an anomaly.

Wild salmon from Alaska likely has gained a market boost from negative reports on farmed salmon. Newspapers around the country published stories about a January 2004 report in the journal Science citing higher levels of potentially cancer-causing PCBs and other toxic chemicals in farmed salmon. Little attention was paid to the report's conclusion that consumption of some types of Alaska salmon also should be limited.

Environmentalists and some writers have touted wild salmon as having better taste and texture, with no need for the artificial coloring given some farmed salmon.

"It's redder. It's richer. It's more expensive. It deserves respect," one North Carolina newspaper food writer wrote of wild salmon this month.

Overall, industry players are optimistic Alaska's commercial salmon business still has some jump, with prices heading up this season and new territory - including the coveted Lower 48 market - opening up for the state's main money fish, the sockeye. Traditionally, those salmon have gone either frozen to Japan or canned to England.

"Last year, we sold a lot more sockeye domestically than we ever had," said Mark Palmer, a manager with Seattle-based processor Ocean Beauty Seafoods Inc.

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