Shoreside, floating processors boost BSAI economy

A study of the economic impact of shoreside and floating processors to communities within the Aleutians East Borough and Aleutians West census area measures the impact in millions of dollars and several thousand jobs.

The Bering Sea/Aleutian island inshore processing sector directly accounted for $1.1 billion in output in 2016, the latest year for which complete data was available, as measured by total production value, the McDowell Group said in its report: Economic Impact of Inshore Seafood Processing in the Bering Sea/Aleutian Island Region.  The report, released in May, was prepared for Icicle Seafoods, Peter Pan Seafoods, Trident Seafoods, Unisea, Westward Seafoods and Alyeska Seafoods.

“Overall, approximately $1.56 billion in economic output in Alaska can be attributed to BSAI inshore processing and related commercial fishing activity, 30 percent of the seafood industry’s total impact in Alaska,” the report said.

In terms of value and volume, the BSAI inshore sector accounted for about 28 percent of the state’s total first wholesale volume of about 2.7 billion pounds and 26 percent of the total Alaska first wholesale value of nearly $4.2 billion.

Inshore processing accounted for a monthly average of 3,750 jobs in the BSAI region in 2016, with total annual wages of $194 million. The workers included 1,400 Alaskans who earned $48 million in wages and directly accounted for more than 40 percent of all local resident employment in the region. When including multiplier effects, BSAI inshore processing accounted for 2,627 Alaska resident jobs and $112 million in Alaska resident wages.

Inshore processors spent $220 million, including shipping, fuel, construction, air transport and utilities in 2016.

From 2015 through 2017, these processors also made capital improvements totaling $175 million, including expanded capacity to process and add value to Pacific cod, increased capacity for surimi production, dock improvements, increased freezer capacity, land purchases and other projects.

Meanwhile the BSAI inshore sector paid over $32.7 million to the state and local communities in fisheries taxes, comprising 56 percent of all fish taxes paid within the state. Those local fish taxes represented 25 percent to 70 percent of operating revenue for these communities. Property and sales tax revenues are also important to the same communities.

In 2016 the inshore sector produced over 745 million pounds of processed seafood from various species, with Pollock produced accounting for 78 percent of volume. Pacific cod products and opilio/tanner crab products made up 12 percent and 5 percent of the total respectively. Another 4 percent were salmon and 1 percent was king crab. Miscellaneous other species made up the rest.

Seafood processing jobs are a critical source of employment in this region. In addition to direct processor employment, jobs for local residents are supported by tax payments to local government or local purchases of goods and services, or employment supported by harvesting activity.

The report also notes that local BSAI residents employed in processing earn 65 percent more than non-local workers om an annualized basis.

The breakdown of where inshore processors spent money on goods and services for 2016 alone includes $100 million on shipping, $34 million on fuel and other petroleum products, $32 million on construction, $17 million on air transportation services, $6 million on public services including electric power, water and wastewater, and $31 million on a broad array of other goods and services.

These processors paid more than $32.7 million in local and state taxes in 2016, including Fisheries Business Tax and taxes levied by local government.

Those payments amounted to 56 percent of all fish taxes paid in Alaska, a total of $58.8 million.

Those tax revenues, coupled with the processing industry’s in-state spending on goods and services, also support additional jobs and wages in the region and elsewhere in Alaska beyond direct employment, the report notes. Many of the region’s 743 local government jobs and $31 million in annual wages are dependent on the region’s seafood processing industry.

On the state level, the multiplier effects are larger. In total, the inshore BSAI processing sector supports 2,627 Alaska resident jobs with $112 million in annual wages statewide, including direct employment and multiplier effects.

Other benefits of the inshore sector include providing markets for local and other Alaska fish harvesters. Without inshore BSAI processors, local fishermen would be challenged to find buyers for their seafood, the report said.

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Margaret Bauman is a veteran Alaska journalist focused on covering fisheries and environmental issues. Bauman has been writing for The Cordova Times since 2010. You can reach her at mbauman@thecordovatimes.com.