Seafood processing plants put up for sale by companies trying to stay financially afloat amidst challenging global markets are expected to have an impact on seafood processing jobs in the upcoming fishing season — but just what to expect is still a waiting game.
With the number of processing facilities to be closed or sold, temporarily or permanently representing about 15% of the state’s nearly 20,000 jobs during peak processing, and paying over $600 million in annual wages, the potential impact on the economy is no small issue, say state labor economists writing about the situation in the April issue of Alaska Economic Trends.
Even before Trident Seafoods became the first of the major processors back in January to announce it was seeking buyers for its processing and related assets in Kodiak, Ketchikan, Peterburg, False Pass, South Naknek, and Chignik, and scaling back winter operations in Kodiak this year the Alaska Seafood Marketing Institute was identifying market forces challenging the survival of harvesters and processors in Alaska.
These included large pink salmon harvests in Alaska and much larger harvests in Russia, combined with the low value of the Russian ruble, that were driving salmon prices down.
The continuing trade war with China has resulted in a large drop in U.S. reports to Chinese buyers as well, the overall result being a big increase in supply and a decrease in demand, noted state labor economists Dan Robinson and Sam Tappen.
Inflation has contributed to reduced demand for Alaska seafood in domestic markets, including stores and restaurants. Then too processors are finding it more difficult to secure financing that would allow them to hold on to more product in inventory until market prices rise, because of higher interest rates, Robinson and Tappen note.
The overall impact has been historically low prices paid to fishermen and processors for multiple species harvested in Alaska.
Recent changes in federal laws ban the import of seafood from Russia or caught by Russian fishermen beyond that country’s borders, but Russia has for several years been dumping its oversupply of salmon into world markets.
The Trends article noted that the seafood processing industry showed relative resilience during the COVID-19 pandemic years, when peak summer jobs fell to just under 16,000 in 2020, then rebounded to nearly 17,700 jobs in 2021, but by July’s peak processing days in 2023, there were almost 3,000 fewer jobs in processing than in 2015, the Trends report said.
When averaging job numbers to include processing of salmon, groundfish, halibut, herring and shellfish, Robinson and Tappen found processor employment reached a decade high of over 1,800 jobs in 2014, compared to 8,500 jobs by September of 2023.
This story was originally published in the April 5 issue of The Cordova Times.
