July 02, 2016
Saturday AM

(SitNews) - The United Kingdom’s recent exit from the European Union – dubbed Brexit - has turned seafood trading on its head.

For 43 years the UK has been a major part of the 28 country EU, and what the pull out means for longstanding business arrangements is anyone’s guess. Last year the UK imported over $90 million dollars of Alaska seafood.

“It’s still speculative, but anything that has a negative effect on currency values relative to the dollar hurts exports. I do expect we will continue to be strong trading partners with both with the UK and the EU, I guess separately now,” said Tyson Fick, Communications Director for the Alaska Seafood Marketing Institute.

Following the vote to leave the EU, the value of the Euro, British Pound and the Yen all dropped significantly against the US dollar, making our products more expensive for overseas customers.

The hit could be especially hard on canned salmon sales which make up nearly 70 percent of Alaska exports to the UK. Canned sales last year were valued at $23 million for sockeyes and nearly $9 million for canned pinks. Alaska also saw big increases in sales of frozen pinks to the UK last year. The pull out also affects other Alaska seafood besides salmon.

“Just the EU alone represents about 25 percent of our export market so that really all affects all species, notably pollock and cod, so it’s pretty concerning,” Fisk added.

Brexit has caused some of the biggest currency moves in decades and that can wreak havoc with credit.

“The same volatility that is causing buyers to be cautious because of uncertainty about currency costs also freezes liquidity for banks and financiers,” said market expert John Sackton. “They become more risk averse and in that climate, seafood businesses can fail to secure the financing they need for big deals.”

A retail analysis by the 90 year old International Grocers Alliance added that “new terms of trade will likely be a key factor in post-exit outcomes for businesses and consumers” and that “leaving the EU might mean reduced access to markets and exclusion from special arrangements.”

Still, customers’ seafood orders will still need to be filled.

“A big positive is that European countries and the UK have long been strong trading partners and very invested in Alaska, and we hope to continue that with all parties,” Fick said.

ASMI is active in 27 different countries and continues to expand markets for Alaska seafood, most recently in Brazil, Soviet satellite states and Southeast Asia. Fick added that the U.S. market continues to be a bright spot.

“We feel really good about the domestic outlook,” he said. “One of the bright spots of unfortunately having lower prices last year was that we were able to run specials at retail that have turned a lot of people on to Alaska salmon, and we hope to continue that momentum throughout this year.”

Fish bills

Fishermen are set to get some big breaks from two bills that are moving their way through Congress.

The first provides relief from new fishing vessel safety requirements set to be on the books next January and implemented by 2020. The new rules would apply to vessels that will be 25 years or older at that time, over 50 feet in length and operate beyond three miles from shore.

The bill, spearheaded by Senators Dan Sullivan (R-Alaska) and Maria Cantwell (D-WA), passed out of the Senate Commerce committee last week following a letter of concern signed by 33 Senators and sent to U.S. Coast Guard Vice Admiral Fred Midgette.

It stated, among other things, that the Coast Guard has released draft plans for the safety compliance program only for the Pacific region just eight months ahead of the 2017 deadline, and it was developed “behind closed doors” with little coordination from the fishing industry. The letter said the plan “is riddled with gaps,” lacks specifics for why some provisions were included and faults the USCG for not sharing methodologies, data and other information in developing the new safety standards.

“We heard about this loudly from so many stakeholders, especially when I visited Kodiak,” said Senator Sullivan in a phone interview. “The bill we passed essentially slides back the compliance deadline to three years after all the rules are promulgated, whenever that might be.

Sullivan said he will be meeting with Admiral Midgette this week to find out why the new safety program has had such difficulty moving forward.

“When the Coast Guard Reauthorization Act passed in 2010, my understanding is that this law did not have the support of the industry, and may not have had the support of the Coast Guard. It was kind of forced on them and it was not something they were pressing Congress to do,” Sullivan said.

Senator Sullivan said he believes the Coast Guard will be very supportive of the Commerce bill because “it gives them a little bit of breathing time, and they don’t want to put our fishermen in a jam.”

Another measure passed unanimously by the Commerce Committee will direct more marketing funds to the seafood industry. The money, mandated by the Saltonstall-Kennedy Act of 1954, comes from a fixed percent of tariffs paid to the U.S. Customs Service on imported seafood and ocean products. Congress set the figure at 60 percent of the transfer total, and decreed that the money be spent on improved technology, quality improvements, domestic and foreign market development and other seafood industry uses.

But according to the Congressional Research Service, only token dollars have gone towards the fishing industry and more than 90 percent has instead been diverted each year by Congress into NOAA’s operating budget.

Fishing industry members, led by advocate Bruce Schactler of Kodiak, have expressed outrage at the way Congress has ignored the mandate and diverted the tariff funds to NOAA. Senator Sullivan said the Commerce bill strives to make sure that no longer happens. “Essentially it takes it back to the original intent of the legislation that requires those involved in determining where the marketing grants go will be fully engaged members of the fishing industry. It puts the people who matter most back in the driver’s seat,” Sullivan said.

Another measure he is pushing would require the nation’s school lunch program to purchase seafood from American producers.

“Alaska is the super power of seafood, but there are loopholes that allow a lot of foreign caught, Chinese processed fish sticks in our kids lunches that are frozen multiple times and loaded with phosphates and other stuff,” Sullivan said. “It ruins the kids’ desire to eat fish for a generation because it’s not very good stuff.”

Scallop time

Alaska’s scallop fishery got underway on July 1 with a fleet of just three to four boats dropping dredges from Yakutat to the Bering Sea. Weathervanes are the largest scallops in the world with a shell diameter averaging ten inches. It can take up to five years for scallops to reach market size, and they can live up to 20 years.

Scallop boats drop big dredges that make tows along mostly sandy bottoms of strictly defined regions, and the fishery is closely monitored by onboard observers.
“It’s a heavy cost at around $350-$400 a day. But it is mandatory and we accept that in order to go into the areas and make sure our bycatch and impact are minimal,” said boat owner Jim Stone.

The scallopers catch, package and freeze the shucked meats aboard the boats which can remain at sea until Thanksgiving. Scallop meats are the adductor muscle that keeps the shells closed and the popular delicacy can pay fishermen up to $10 per pound.

Alaska’s catch this year has dropped from nearly 500,000 pounds of shucked meats to just over 286,000 pounds, the lowest harvest in nearly a decade.

It’s pricy scallops that each year nudges Dutch Harbor out of the top spot for the nation’s most valuable seafood port. New Bedford, Massachusetts has held the lead for value for 15 years running, due to East coast scallop catches that can top 50 million pounds of shucked meats.

This year marks the 25th year for this weekly column that focuses on Alaska’s seafood industry. It began in 1991 in the Anchorage Daily News, and now appears in over 20 newspapers and web sites. A daily spin off – Fish Radio – airs weekdays on 30 radio stations in Alaska. My goal is to make all people aware of the economic, social and cultural importance of Alaska’s fishing industry to our state, the nation and the world. 

Laine Welch ©2016

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