Alaska's seafood industry posted US$1.8 billion losses in 2022–2023
NOAA Fisheries has released a new economic snapshot focused on the Alaska seafood industry. Economists estimate that the Alaska seafood industry suffered a US$1.8 billion loss during the period 2022-2023, and that the Alaska fishing industry saw a 50 per cent decline in profitability in 2021-2023.
NOAA Fisheries said this has resulted in more than 38,000 job losses nationwide and a US$4.3 billion loss in total US output (the total dollar value of all goods and services produced). The most affected states (including Alaska, Washington, Oregon, and California) saw a combined loss of US$191 million in state and local tax revenues.
The 2023 downturn led concerned seafood industry members to request that NOAA Fisheries undertake an independent analysis. They wanted to see the data behind the pinch that fishermen, seafood workers, and communities were feeling.
NOAA Fisheries social scientists and economists compiled data from fishing boats, processors, and international trade databases for both state and federal fisheries in Alaska. They interviewed participants in the industry, fishing associations, members of dependent businesses, and Alaska community members.
They also consulted trade articles, news stories, and recent reports about Alaska and the global seafood industry. The effort, which focused on the commercial, for-profit seafood industry in Alaska, culminated in the Alaska Seafood Snapshot for 2023.
Key findings
Economists found that, starting in 2022, the industry experienced:
Higher costs associated with increased wages
Higher energy prices
Higher interest rates
Revenue decreased in 2023 due to declining prices for every major species group.
They also found that, in the post-pandemic years, retail operational strategies and consumer seafood purchases have changed. For example, retailers have changed how they handle the seasonal influx of seafood products.
Change in retail and consumer behaviour
Historically, retailers would lower prices to clear inventory. However, strong retail demand for seafood during the pandemic as individuals ate at home was followed by a dramatic decline in that demand as restaurants and schools opened up. This meant that retailers were saddled with high-priced inventory and lower demand.
Retailers transitioned to keeping supply lower by slowly moving inventory out of cold storage. This practice lowered the seafood supply in the market and kept prices higher, allowing retailers to stay afloat. But it also meant seafood producers, processors, and wholesalers in Alaska demanded a lower quantity of seafood. Retail seafood prices have softened somewhat in 2024, but not by enough to entice consumers to purchase the volumes they bought in 2020–2021.
International competition
An additional challenge for Alaska fishermen is increased competition abroad. Several Russian fisheries have earned Marine Stewardship Council certification and use the trade name “Alaska pollock” in marketing. This results in sustainable domestic fisheries having less of an edge in the global marketplace. Lower labour and operating costs in production and processing abroad, as a result of lower environmental and labor standards, also hurt our competitive standing.
Other factors that affect competitive edge include:
International trade barriers
Strengthening US dollar
Inflation, which affects consumer demand for higher priced seafood products
Declines in seafood processing jobs and plant closures in the United States
Lack of revenue insurance for harvesters and processors such as farmers have under the US Department of Agriculture
All of this contributed to a 32 per cent decline in vessel revenues from 2022 to 2023, totaling US$617 million. Also, first wholesale values dropped US$1.2 billion, or 26 per cent. This total direct loss equaled US$1.8 billion.
The Gulf of Alaska has experienced a decade of ecological and economic challenges. These have led to declining participation and undermined the economic status and social well-being of fishing communities. The Bering Sea has experienced different but similarly scaled ecological changes over the last decade.
For instance, the total number of active commercial fishing vessels declined by 29 per cent in the Bering Sea and Aleutian Islands from 2003–2023. The number of active seafood processors declined by 32 per cent. In the Gulf of Alaska, these numbers declined by 20 per cent and seven per cent, respectively.
