The Potential for Incr

Production of Fishmeal a

from Food Fishery Byp

The Case of Alaska P

Gunnar Knapp

Professor of Econom

University of Alaska Anc

International Fishmeal and Fish O

2008 Annual Conferen

San Diego, California, 

October 28, 2008
What is the potential for increasing world productio

of fishmeal and fish oil from food fishery byproducts

My understanding is that:• No data exist on world production of feed products from fo

fisheries

• No studies have been done examining the potential for wo

production of feed products from food fisheries
My objectives in this presentation 

• To suggest a conceptual framework for thinking about fac

affecting production of feed products from food fisheries

• To illustrate this framework using the Alaska pollock fishe

• To speculate about the world potential for production of fe

products from food fisheries
Organization of Presentation

1. Basic economics of fishmeal and fish oil produc

food fishery byproducts

2. Fish meal and fish oil production in the Alaska p

fishery

3. An approach for estimating potential fishmeal an

production from food fish byproducts

4. Conclusions
1. Basic economics of fishmeal and fish oil prod

from food fishery byproducts

• Profit maximization for primary food products drives funda

economic choices for food fish processors:

– Species processed– Timing of production– Locations of facilities– Scale of facilities– Product mix– Product yields

• Optimal economic choices for food fish production are not 

necessarily optimal for byproduct utilization.
The scale needed for profitable fish meal and fish meal pro

likely to be higher than for food fish production.

• Larger scale production is needed because of:

– Higher relative capital costs– Lower relative unit values– Higher volume requirements of buyers– Much lower yield from harvest volume

• For food fish processors, fishmeal and fish production ma

unprofitable:

– If the scale of production is too low– If production is too seasonal 
Even if costs of production exceed prices, food fish processo

produce fish meal and fish oil:

• If losses from fish meal and fish oil production are less tha

of waste disposal

• If government mandates production• If government subsidizes production
Selected factors which affect the likelihood of fish meal an

production from a food fishery

Increasing energy and labor costs DIncreasing costs of fish waste disposal I

Factor 

Development of alternative byproduct uses DIncreasing food uses of fish byproducts DIncreasing yields in food fish processing DEven flow of product over the year IConsolidation of processing into fewer and larger plants IGovernment mandates for byproduct utilization IGovernment subsidies for byproduct utilization IIncreasing fishmeal and fish oil prices I
Mathematically, the volume of fishmeal and fish oil producti

food fishery is determined by the harvest volume and three u

yield percentages.

Food fish harvest volume

x Percent of food fish volume

for which byproducts are utilized 

= Food fishery volume for which 

byproducts are utilized

x Byproduct yield

= Byproduct volume

x Fishmeal & fish oil yield from 

byproducts

= Fishmeal & fish oil volume
Under reasonable assumptions, fishmeal and fish oil volum

relatively small share of total food fishery volume

0

102030405060708090

100

Total

food fishery

harvest

volume

Food fishery

volume for which

byproducts

are utilized

By-product

volume

% of total harvest volume

x Percent of food 

fishery volume for 

which byproducts 

are utilized

(70%)

x By-product

yield

(50%) 

x Fi

o

100%

35%

70%
2. Fishmeal and fish oil production

in the Alaska pollock fishery
Alaska pollock (Theragra chalcogramma, also known as Walley

ranks second in world marine capture fisheries producti

Source: FAO, World Review of Fisheries and Aquaculture, 2006, page 11.
“Alaska pollock” is the name of the species.

In recent years, Alaska has accounted for more than half of wo

In this presentation, I discuss only that part of the “Alaska p

industry which occurs in Alaska!

World Harvests of Alaska Pollock, by Country

0

1,000,0002,000,0003,000,0004,000,0005,000,0006,000,0007,000,0008,000,000

1970

1,972

1,974

1,976

1978

1,980

1982

1984

1986

1988

1990

1992

1994

1996

1998

2000

2002

2004

2006

Source: FAO Fishstat+ database

metric tons
Alaska pollock accounts for:

- about one third of total U.S. fish harvests

- more than twice the volume of US menhaden harv

United States Fish Harvests

0

500

100015002000250030003500400045005000

1990

1991

1992

1993

1994

1995

1996

1997

1998

1999

2000

2001

2002

2003

2004

2005

2006

2007

thousands of metric tons 
Alaska pollock accounts for about 3/5 of Alaska fish 

Volume of Alaska Groundfish Harvests

0

500

1,0001,5002,0002,5003,000

1990

1992

1994

1996

1998

2000

2002

2004

2006

Source: National Marine Fisheries Service

thousand metric tons O

SOPA
Since 1994, total Alaska pollock harvests have bee

between 1.0 and 1.6 million metric tons annually.

Total Alaska Pollock Harvests

0

200400600800

1,0001,2001,4001,6001,800

1994

1995

1996

1997

1998

1999

2000

2001

2002

2003

2004

2005

thousands of metric tons
Most 

Alaska 

harves

in the 

S

Total Alaska Pollock Harvests

0

200,000400,000600,000800,000

1,000,0001,200,0001,400,0001,600,0001,800,000

2004 2005 2006 2007

metric tons Gulf of Alaska Bering Sea
Bering Sea pollock harvests are allocated between three 

onshore plants, catcher-processors, and mothership

Bering Sea Pollock Harvests, by Sector

0

200,000400,000600,000800,000

1,000,0001,200,0001,400,0001,600,000

2004 2005 2006 2007

metric tons

MothCatcOnsProc
Onshore pollock processing is heavily concentrated in thr

processing plants at Dutch Harbor (Unalaska) and one at Ak

of Alaska’s numerous other processing plants process muc

volumes of salmon and other species, and many operat

seasonally. 

Map source: Alaska Division of Community Advocacy web site: http://www.dced.state.ak.us/cbd/seafood/seafoodprocessors.htm

Dutch Harbor

& Akutan
Onshore Processing Plant at Dutch Harbor
Trawler of the type delivering pollock to Dutch Harbor p
Catcher-Processor (factory trawler)
Fillets

Roe

The most important food products made from Alaska pollock are surimi, 

fillets, and roe
In 2004, surimi, fillets, and roe accounted for 77% of produc

and 91% of first wholesale value.

Fillets

34%

Minced fish

2%

Other products

3%

Fish meal

4%

Share of Alaska P

Product Value, 2

Source: NMFS Economic Status Report, 2004, Table 25

Roe

5%

Fillets

33%

Minced fish

4%

Fish meal

11%

Other products

8%

Surimi

39%

Share of Alaska Pollock

Product Volume, 2004
There are only about ten onshore fishmeal processing plants 

The largest are operated by the onshore pollock proces

Most of the others process primarily salmon byproducts in mu

volumes. A few catcher-processors have fishmeal plants o

The y

sh

loca

app

scale 

p
Fish meal plant at Dutch Harbor
Diagram of a fish meal plant at Dutch Harbor.
In recent years:

Alaska pollock fishmeal production has been about 4.5% of harve

(60-70 thousand metric tons)

Alaska pollock fish oil production has been about 1.2% of harve

(17-19 thousand metric tons)

Alaska Pollock Fishmeal and Fish Oil Production

0

10,00020,00030,00040,00050,00060,00070,00080,000

2004 2005 2006 2007

metric tons

Fishmeal volume Fish oil volume Fishmeal percent Fish oil perce
Until recently, Alaska pollock fishmeal prices were highe

international fishmeal prices.

Alaska Pollock Fishmeal Prices and International Fishmeal Price

$0

$200$400$600$800

$1000$1200$1400

1995

1996

1997

1998

1999

2000

2001

2002

2003

2004

2005

2006

2007

metric tons

Alaska a(NMFS dAlaska p(COAR dAlaska o(NMFS dInternatio(FAO da

International 

FAO, Globefis

Update, Fishm

Oil, July 200

64/65%, a

wholesale, C
Fish meal production is a much higher share of harvest v

onshore than offshore. 

Bering Sea Pollock Fishmeal Production:

Percentage of Harvest Volume

0.0%1.0%2.0%3.0%4.0%5.0%6.0%7.0%8.0%

2004 2005 2006 2007

% of harvest volumeFis

onFisoff

(Data for 2006 are not available)
Similarly, fish oil production is a much higher share of harve

onshore than offshore.

Bering Sea Pollock Fish Oil Production:

Percentage of Harvest Volume

0.0%0.5%1.0%1.5%2.0%2.5%3.0%

2004 2005 2006 2007

% of harvest volume

(Data for 2006 are not available)
Food product prices and volumes are higher than fish meal 

volumes—giving processors an incentive to optimize produc

products. 

Average Annual Prices of Products Produced from Alaska Pollo

$0.00$0.20$0.40$0.60$0.80$1.00$1.20$1.40$1.60$1.80

1996

1997

1998

1999

2000

2001

2002

2003

2004

2005

2006

$/lb

DOSMF

N

fop
Food fishery harvest volume is clearly a key variable aff

clearly a key variable affecting the potential for fishmeal & 

production. 

Total Alaska Pollock Harvests

0

200400600800

1,0001,2001,4001,6001,800

1994

1995

1996

1997

1998

1999

2000

2001

2002

2003

2004

2005

2006

harvest volume (000 mt)

Harvest volume Fishmeal volume Fish oil volume
There is wide seasonal variation in Alaska pollock harves

distinct winter and summer seasons driven by roe content a

factors. Fish oil yields are much lower in the winter (1-2%) t

summer (3-4%). Landings from other fisheries improve plan

in other seasons.

Alaska Pollock Harvests, by Month, 2000-2002

0

50,000

100,000150,000200,000250,000300,000350,000

Jan-00

May-00

Sep-00

Jan-01

May-01

Sep-01

Jan-02

May-02

Sep-02

metric tons
Extensive research is occurring on u

of Alaska fish processing byproducts—n

meal and fish oil but also food products

supplements, and fuels. 

http://seagrant.uaf.edu/conferences/2009/byproducts/
Other factors affecting Alaska pollock fish meal and fish oil p

• Fishery management

– Onshore delivery allocations– Harvesting cooperatives

• Waste disposal regulations and fish utilization requiremen• Capital subsidies for byproduct utilization• Utilization of fish oil for energy• Reprocessing in China• Climate change

– Shifts northward and westward in pollock stocks
Fish meal production is a much higher percentage of harve

for Alaska pollock than for other Alaska species, due to lar

production and lower processing yields. 

Alaska Pollock Share of Alaska Fish Meal Production

 and Alaska Fish Harvests

0.0%

10.0%20.0%30.0%40.0%50.0%60.0%70.0%80.0%90.0%

100.0%

2000 2001 2002 2003 2004 2005 2006 20

% of Alaska total

Alaska fish meal production Alaska fish harvests
3. An approach for estimating potential fishmeal 

oil production from food fish byproducts

We may estimate potential world fishmeal and fish oil prodfrom food fish byproducts based on four assumptions:

– World food fish production – Share of food fish production for which byproducts wil

processed into fish meal and fish oil

– Byproduct yield from food fish– Fishmeal & fish oil yield from byproducts

We may use a range of assumptions to calculate

a range of potential fishmeal and fish oil production.
World food fish production

• Approximately 106 million metric tons in 2004

– FAO estimate; includes China (37 million metric tons)– Includes aquaculture

• Production from capture fisheries will likely remain stable • Production from aquaculture will likely continue to grow.

Assumption: World food fish production will be 106 

million metric tons.
Share of food fish production for which byproducts will be p

into fish meal and fish oil

HIGHER FOR FOOD FISH PRODUCTION WHICH IS:

• Finfish• Large-scale• Industrial• Geographically concentrated• Year-round• Not marketed fresh (about half of 

current world production)

LOWER FOR FOOD FPRODUCTION WHICH 

• Non-finfish• Small-scale• Artisinal• Geographically dispers• Seasonal• Marketed fresh (about 

world production)

Assumption: Byproducts from 30-60% of food fish 

production will be utilized for fishmeal and fish oil 

production.
Byproduct yield from food fish

• The higher the food product yield, the lower the byproduct • Processors’ have an economic incentive

– to increase food product yields– to lower byproduct yields

Assumption: Byproduct yield from food fisheries will 

be 30-50%.
Fishmeal & fish oil yield from byproducts

Assumption: The fishmeal & fish oil yield from 

byproducts will be 10-25%.
Under these assumptions, fishmeal and fish oil production 

fisheries would be between 1 and 9 million metric to

= Fishmeal & fish oil volume 1-9 m

10%

x Fishmeal & fish oil yield from byproducts

= Byproduct volume 13-38 m

x Byproduct yield 40%

32-64 m

= Food fishery volume for which byproducts are utilized

30%

x Percent of food fishery volume for which byproducts are utilized 

Total food fishery harvest volume 106 m

A formal analysis would require a review of these assumpt

fishery-by-fishery basis—a significant undertaking
4. Conclusions

• Profit maximization for primary food products drives funda

economic choices for food fish processors.

• The scale needed for profitable fish meal and fish meal pr

likely to be higher than for food fish production.

• Fish meal and fish meal production may be uneconomic if 

of production is too low or too seasonal.

• Even if production is unprofitable, food fish processors ma

produce fish meal and fish oil

– if losses are less than the cost of waste disposal– if government subsidizes or mandates byproduct utiliz

• Rapid or dramatic increases in fish meal and fish oil produ

byproducts seems unlikely

• The potential scale of world fishmeal and fish oil productio

byproducts ranges from well below to slightly higher than 

from feed fisheries.
Selected factors which could affect world fishmeal and f

production from food fish

Factor 

Development of alternative byproduct uses DIncreasing energy prices DIncreasing food uses of fish byproducts DIncreasing yields in food fish processing DIncreased processing of food fish (lower % sold fresh) IIncreasing costs of fish waste disposal IGovernment mandates for byproduct utilization IIncreasing aquaculture production IIncreasing fishmeal and fish oil prices I