The International Pacific Halibut Commission, or the IPHC, will kick off its annual meeting in Portland Monday. The international regulatory body is expected to slash the total allowable catch of halibut on the West Coast by 24 percent due to declining stocks. With potentially less Pacific halibut on the market, prices are likely to increase, but a new direct competitor on the East Coast may hamper the market’s ability to compensate for lower halibut stocks in Alaska.
Historically, Pacific halibut hasn’t really had a direct competitor, and as stocks and quotas have steadily declined since the mid-2000s, prices have gone up.
It’s simple supply and demand, and prices have been high in recent years, hovering around $7 per pound at the docks in Homer.
“It’s the most valuable per pound species of any fish in Alaska, but there's good reason for that. A lot of affluent customers out there, that's what they want, and that's what they pay up for,” Andy Wink said, a fisheries analyst and owner of Wink Research and Consulting.
But ex-vessel prices came down a little bit in 2017, and Wink said wholesale prices decreased too. Wholesale prices dropped by about 6 percent in Canada, which the closest comparison to the U.S. market until 2017 data is released.
That could be because more Atlantic halibut is making its way onto the market.
According to the National Marine Fisheries Service, Atlantic halibut imports were up 9.5 percent last year, with the largest volume coming from Canada. Landings by U.S. fishermen have also been increasing on the East Coast.
That’s making things a bit more difficult for fish buyers in Alaska.
Bill Sullivan owns Kachemak Bay Seafoods, a small fish buyer and processor on the Homer Spit. In the past, Sullivan has sold a good portion of the halibut he buys to wholesalers in Boston and New York.
“Just less and less interest all the time from the East Coast because their stocks of halibut have been increasing quite a bit. So, there hasn't been very much opportunities as we have had in the past,” Sullivan explained.
Other fish buyers have also been feeling the pain. Mike McCune manages the Alaskan Fish Factory in Homer and he said high Pacific halibut prices, while good for fishermen, may be too high to compete with its new cheap competitor.
“Other white fish are also competitors, the cod fish, all the way down to the tilapia for that matter,” McCune added. “But for the most part, the East Coast halibut is kind of a new product, which is very favorable to our product.”
Atlantic halibut hasn’t really been a competitor until now because stocks were overfished in the 1800s and haven’t completely rebounded. Commercial fishing in U.S. waters for the prize ground fish is also heavily restricted, and East Coast fishermen are only allowed one fish per trip.
The new competition has led smaller buyers like Sullivan to focus on selling his product in state, and that is starting to affect fishermen as well.
“There was a lot less interest in buying loads when we came to town, and for the first time I had heard of competition from East Coast halibut,” Malcolm Milne said, a Homer-based commercial fishermen and president of the North Pacific Fisheries Association. “It was a little disconcerting there because all of a sudden we have something else to compete with, which is driving the price down.”
Milne said for the first time, fish buyers were turning away loads of halibut last year, but he adds this year’s declining quotas will have a more immediate impact on fishermen’s bottom line.
Milne expects to take a roughly 10-percent loss if the IPHC reduces quotas to the levels scientists are suggesting, a measure Milne said he supports.
But with more fish on the East Coast, the market may not compensate for this year’s potentially large cut to Pacific halibut quotas like it has in the past.
The largest cut in recent years came in 2011 when the IPHC reduced quotas across the board by 9 million pounds, and fishermen also saw a 8-million-pound reduction the following year.
Prices reacted to that market change, but with more competition potentially on the horizon, Wink said Alaska’s halibut industry will need to find a way to stay connected in the market.
“Hopefully we can keep finding and keep connected with those consumers. Because again, we're going to need as much value as possible to offset these lower (total allowable catches) TACs,” Wink said.
The IPHC will set Pacific halibut quotas next week, and Wink adds the market will likely provide some valuable feedback this year on the impact of more East Coast halibut.