Overview of Trends in Alaska Fisheries

Prices and Value

Gunnar Knapp

Professor of Economics

Institute of Social and Economic Research

University of Alaska Anchorage

Updated October 2009

Note: Fish prices and value can vary widely from ye

to year. Some of the trends shown in the graphs m

have changed since the graphs were prepared.
Fish prices are very volatile. Like other natural resource p

minerals, timber, etc.), they can go up fast and they can co

fast. 

That means that the value of fish harvests can change dra

even if the harvests don’t change. 

The purpose of this presentation is to show you how pric

harvest value for major Alaska fish species have changed 

years.
Why do prices change from year to year?

Examples of factors which ademand . . .

• SUPPLY

– Alaska production– Alaska’s competitors p

• Wild • Farmed

• DEMAND

– Consumer Incomes– Consumer tastes– Exchange rates– Prices of other fish and – Distribution costs– Trade barriers– Marketing– Market power of buyer

Demand Supply

Economists

Many different factors affect fish prices. These include both factors which affect SUPPLY and factors which affect DEMAND. We’ll discuss supply and demand and how they affect prices for fish later in this course. An old joke is that if you need an economist, just teach a parrot to say “supply and demand.”
We’ll start by defining and explaining three terms

frequently used by fisheries economists:

• Ex-vessel price• “Real prices” and “nominal prices”• Price indexes
Ex-vessel price is the price a fisherman gets paid.

• “Ex-vessel” means “from the vessel.” So it’s the price of t

when it leaves the boat--which is when fishermen usually 
“Nominal” vs. “Real” Prices 

• The “nominal” price of any product is whatever the actual dollar 

the time of the transaction.

• The “real” price is the “nominal” price adjusted for inflation.• The “real” price is always expressed in terms of the buying powe

as of some particular year.

• To calculate real prices, economists use the consumer price ind

which shows what average prices were in some particular year apercentage of what average prices were in some base period.

• For example, the Anchorage Consumer Price Index was 189 in 

means prices in 2008 were 189% of what they were in the base (which was 1982-84).

• The formula for the real price is:

Real pricet = Nominal pricet x (CPIr / CPIt )

• You don’t have to learn this formula for the moment. Just remem

– for years in the past, real prices are higher than nominal pric– compared with past years, nominal prices have risen more t

prices.
The nominal price of halibut rose from just $.67/lb in 1980 to $3.25

almost five times as high! But a dollar bought a lot more in 1980 t

The “real price” in 1980, expressed in terms of what it would hav

2008, was $1.49/lb. That means that the “real price” was only a lit

twice as high in 2008 as in 1980. 

Average Ex-Vessel Prices of Alaska Halibut, 1980-2008:

Real and Nominal

$0.00$0.50$1.00$1.50$2.00$2.50$3.00$3.50

1980

1985

1990

1995

2000

2005

$/lb
Price indexes are a way of showing prices as a percentage o

during some “base year” or “base period.”

• Suppose the average price was $.40/lb during the base ye

base period.

• Then the price index would have been:

– 100 when the price was $.40/lb (100% of $.40/lb)– 150 when the price was $.60/lb (150% of $.50/lb)– 200 when the price was $.80/lb (200% of $.40/lb)
These graphs show the same 

price information in two different 

ways.

The price index graph on the 

bottom is useful because it 

shows you the real price in any 

given year as a percentage of 

the average price for the whole 

period.

Average Real Ex-Vessel Price of Alaska Halibut, 198

$0.00$0.50$1.00$1.50$2.00$2.50$3.00$3.50

1980

1985

1990

1995

2000

2005

$/lb

Average Real Ex-Vessel Price Index for Alaska Hal

0

20406080

100120140160180200

1980

1985

1990

1995

2000

2005

price index (base period = 1980-2008) 
This graph shows real (inflation-adjusted) ex-vessel prices for Ala

salmon species, expressed in $2008 dollars. Note that the prices 

higher for sockeye, coho and especially chinook salmon than they a

and chum salmon. Note that prices fell dramatically between 19

highest price years ever) and 2002, and have increased since then

for chinook salmon, real prices remain well below the levels of th

Real Alaska Salmon Ex-Vessel Prices, 1980-2008

$0.00$0.50$1.00$1.50$2.00$2.50$3.00$3.50$4.00$4.50$5.00

1980

1982

1984

1986

1988

1990

1992

1994

1996

1998

2000

2002

2004

2006

2008

Source: ADFG. 

$/lb (2008 $)
This graph shows the same information as the previous graph, ex

the prices are expressed as price indexes. That allows you to se

changes in prices more easily. You can see that while the price

species increased since 2002, the price of sockeye increased muc

than the prices of the other species.

Indexes of Real Alaska Salmon Ex-Vessel Prices, 1980-2008

0%

20%40%60%80%

100%120%140%160%180%200%

1980

1982

1984

1986

1988

1990

1992

1994

1996

1998

2000

2002

2004

2006

2008

Source: ADFG. Note: 1988 price indexes peaked well above 200% 

for most species.

Real price as % of 1980-2008 average 
The most important cause of the decline in salmon prices between 1989 and 2002 was co

markets from farmed salmon. Because of the dramatic growth in world farmed salmon

world salmon supply has more than doubled since 1990. Between 1980 and 2007, Alask

salmon supply well from 42% to 15%. This is an example of how competitors’ supply can 

World Salmon Supply: Wild and Farmed

0

500

1,0001,5002,0002,5003,000

1980

1982

1984

1986

1988

1990

1992

1994

1996

1998

2000

2002

2004

2006

thousand metric tons

Sources: Alaska data from 

Alaska Commercial Fisheries 

Entry Commission and Alaska 

Department of Fish and Game; 

other data from National Marine 

Fisheries Service and FAO 

Fishstat+ database. Farmed 

trout includes rainbow trout 

farmed in saltwater.
Farmed salmon is not the only factor affecting salmon p

Numerous other factors also have contributed to the dec

salmon prices. Some of these include:

• Large Alaska salmon harvests• Large packs of canned salmon• Declining demand for traditional products such as canned • Stagnant Japanese economy• Increasing quality standards in world markets• Consolidation in retail food and food service industries

The relative effects that these factors have had on salmo

differ for different salmon species.
Real Ex-Vessel Price Indexes for Pacific Herring

(100 = average real price for the period 1980-2008)

0

50

100150200250

1980

1985

1990

1995

2000

2005

real price index

Alaska herring prices have fallen dramatically since the 198

because of the stagnant Japanese economy and declining d

luxury herring products.
Prices of Alaska pollock fell from the mid 1980s to the early 2000s for sev

including declining Japanese demand for pollock surimi and competition f

pollock products processed in China and Korea. Pollock prices strengthen

due to strong world demand for pollock fillets, and declining competition f

pollock as Russian harvests declined. Russian harvests are beginning to rise 

could would normally push pollock prices lower, except that Alaska harvests 

Real Ex-Vessel Price Indexes for Alaska pollock

(100 = average real price for the period 1980-2008)

0

50

100150200250

1980

1985

1990

1995

2000

2005

real price index
In recent years, prices for crab, halibut and sablefish have general

These are considered high-value fish species. Halibut and sablefis

benefited from the adoption of an “IFQ” fisheries management syste

spread fishing out over much longer seasons. 

Real Ex-Vessel Price Indexes for Selected Species

(100 = average real price for the period 1980-2008)

0

50

100150200250

1980

1985

1990

1995

2000

2005

real price index 
The combined effect of changes in harvests and prices have resulted in different trends 

harvests and prices for different Alaska species, expressed in “real” (inflation-adjus

SALMON value fell dramatically from 1988 to 2002—but has started to rebo

GROUNDFISH value fell during the 1990s but has risen since 2002.

HALIBUT value has risen steadily since the 1990s.

SHELLFISH value is stable but much lower than during earlier boom perio

HERRING value has fallen to a relatively insignificant level.

Real Ex-Vessel Value of Alaska Seafood Harvests

0

200400600800

1,0001,2001,4001,600

1960

1965

1970

1975

1980

1985

1990

1995

2000

2005

Source: National Marine Fisheries Service

millions of 2008 dollars 
The total real ex-vessel value of Alaska fish harvests declined by more than $

more than half—during the early 1990s. The fall was mainly due to the decline i

harvests. However, between 2002 and 2008, the value of harvests increased for 

except herring—and total value grew by more than $600 million. In general, the 

of Alaska’s seafood industry improved significantly from 2002 to 2

Real Ex-Vessel Value of Alaska Seafood Harvests

0

500

1,0001,5002,0002,500

1960

1965

1970

1975

1980

1985

1990

1995

2000

2005

Source: National Marine Fisheries Service

millions of 2008 dollars