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Shifting economic and political winds have the Alaska seafood industry sailing through uncharted waters toward 2009, hoping that markets improve, credit restrictions ease up, but uncertain how the Obama administration will act concerning fisheries issues.
Fishing industry is in uncharted waters 010709 BUSINESS 1 Morris News Service - Alaska Shifting economic and political winds have the Alaska seafood industry sailing through uncharted waters toward 2009, hoping that markets improve, credit restrictions ease up, but uncertain how the Obama administration will act concerning fisheries issues.
Wednesday, January 07, 2009

Story last updated at 1/7/2009 - 10:51 am

Fishing industry is in uncharted waters

Shifting economic and political winds have the Alaska seafood industry sailing through uncharted waters toward 2009, hoping that markets improve, credit restrictions ease up, but uncertain how the Obama administration will act concerning fisheries issues.

"There is little room for error in today's economy," said Robin Samuelsen, a veteran Bristol Bay salmon fisherman and executive director of the Bristol Bay Economic Development Corp. in Dillingham. "Hopefully these (federal) economic stimulus packages will turn things around," he said. "And hopefully the price of fuel will stay down to $40 a barrel."

Samuelsen said he also hopes the Obama administration will take a serious look at reinstating the moratorium on exploration and drilling for oil in Bristol Bay. "There is no more productive ecosystem in the world than the Bristol Bay basin; we've got everything here and tons of marine mammals," said Samuelsen, who said the nation needs, to the greatest extent possible, to wean itself off fossil fuels.

"The bottom line is that there is a lot of uncertainty about what the effects of the economic crisis may be," said Gunnar Knapp, an economics professor with the Institute of Social and Economic Research at the University of Alaska Anchorage. "It may affect the Alaska seafood industry in a variety of ways, and the effects could vary for different species and regions, depending in particular on their markets."

Then, too, any time you talk about fish, one has to start with the inherent uncertainty of the resource and the industry, he said. "Beyond that, we have a global economic recession and this recession varies in strength in different countries. A key factor of it is there is an extremely high level of uncertainty in how significant the problems may be, how deep they are and how long it will last.

"We are in unfamiliar territory," said Knapp, who said potential effects of the economic crisis on the salmon industry could include everything from reduced consumer demand for seafood to credit problems for buyers and sellers of seafood. "If seafood buyers such as wholesalers and food service and retail buyers have difficulty getting credit, this could reduce demand even if consumer demand weren't affected," he said. "How big a problem this may be will depend crucially on how quickly or not problems in credit markets get addressed -- which I just don't know."

On a global scale, many of Alaska's competitors may have the same or worse problems with credit and markets, he said. "To the extent they are unable to supply markets, this could benefit the Alaska industry."

Knapp said the silver lining of the economic crisis for fishermen (but not for the state of Alaska's oil revenues) is that it has led to a dramatic decline in oil prices. "I would expect this to lead to a significant decline in fuel prices for fishermen over the next few months, just as it has led to a significant decline in gasoline prices for automobile drivers."

The university economist also said he expects that recession will result in a significant cut-back in demand for higher-end seafood products that go to white tablecloth restaurants, which could translate into downward pressure on prices for halibut, crab and higher priced salmon.

Still Chris McDowell, a seafood analyst in Juneau, notes that the Alaska seafood industry's average earnings of $1.4 billion from 2003 through 2007 were almost evenly split between the high value and high volume fisheries. The high value harvests include halibut, sablefish and crab, while high volume fish include pollock, Pacific cod and pink and chum salmon.

"We've got a definite decline in the harvest volume of pollock, but the question is, in 2009, will the global supply and global economic situation result in concurrent decline in price of traditional

high volume species," he said. Alaska fishermen's capacity to maintain historically high prices for high value species is an unknown, he said.

Dave Harsilla, president of the Alaska Independent Fishermen's Marketing Association said that the economic downturn aside, the Bristol Bay sockeyes are still an excellent value. "They are not overpriced by any means, and will continue to be in the market in the U.S., Europe, and Japan," he said. Harsilla, also a Bristol Bay fisherman, said strategies are being discussed for legislation to bring back the federal moratorium on exploration for oil and gas in the bay.

Another piece of federal legislation being closely eyed is the crab rationalization program now under a three year review by the North Pacific Fishery Management Council. The council spent hours at its December meeting in Anchorage hearing testimony for and opposed to the present conditions of the legislation, which privatized the fishery, allocating harvesting and processor shares, but giving little to those who have crewed in this fishery for years.

Linda Kozak, a Kodiak fisheries consultant, cited other unknowns that concern her clients, crab and longline fishermen.

"Our concerns are that we may have a more focused (federal government) effort on closing Alaska waters under the National Marine Sanctuaries Act," she said.

That legislation authorizes the Secretary of Commerce to designate and protect areas of the marine environment with special national significance due to their conservation, recreational, ecological, historical, scientific, cultural, archeological, educational or esthetic qualities as national marine sanctuaries.

Kozak also voiced concern over declining federal and state dollars for fisheries research and management, which she said could result in managers having to be extremely conservative when setting harvest limits. "I think things are going to be quite busy this next year with regard to what's going on in Washington D.C., educating the new administration on the good management we have and trying to maintain our research and management dollars," she said.

Mark Vinsel, executive director of United Fishermen of Alaska, in Juneau, said a major issue for UFA, which represents thousands of Alaska fishermen, is getting health insurance for fishermen.

Vinsel said the organization also plans to work with the Alaska congressional delegation on getting fishermen access to the farm operating loan program. That federal program would provide long term financing for fishermen, allowing them to adapt to new technologies to save energy, and allow the next generation of fishermen to finance their way into boat ownership.

Margaret Bauman can be reached at margie.bauman@alaskajournal.com.


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