The Alaskan seafood sector faced a difficult year in 2023, with economic pressures, plant closures, inventory glut, and low sales. A new report by McKinsey Research for the Alaska Seafood Marketing Institute (ASMI) highlights the challenges and their impact on the sector [013e23dc]. In 2022, the Alaska seafood industry harvested 5.8 billion pounds of seafood, valued at $2 billion. Processors turned that into 2.3 billion pounds of product worth $5.2 billion. The industry directly employed over 48,000 workers and accounted for 66% of the state's manufacturing employment. On a national level, Alaska seafood contributes $15.8 billion to the US economy and creates over 80,000 full-time equivalent jobs annually. The industry also makes up about 60% of the total US seafood harvest [013e23dc].
Economic concerns, a strong US dollar, and currency differentiation affected the industry heavily in 2023. ASMI is working to build demand for Alaska seafood [013e23dc].
Despite the challenges faced by the Alaskan seafood industry, Vietnamese pangasius exports to the United States brought back nearly US$31 million in value in March, a 0.03% increase year on year and a two-fold rise compared to the previous month. This is the highest export value in the US market since June 2023. Pangasius exports to China and Hong Kong in March increased by 56% compared to the previous month, but decreased by 44% year on year. Four-month pangasius exports to China and Hong Kong fell 22% year on year to nearly US$112 million. Pangasius exports to the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP) market in March dropped by 8% to roughly US$22 million, but saw an 8% rise to more than US$59 million from January to April. Canada has become the second largest consumer of Vietnamese pangasius in the CPTPP bloc, accounting for about 20% of total export turnover [233d25bb].
The seafood industry has also been influenced by persisting inflation and economic challenges, which have shaped seafood consumption and the outlook for 2024. The United States and the European Union (EU) faced predictions of a recession and high inflation, but the forecasts were not entirely accurate. The World Bank predicts that global economic output will slightly decrease in 2024, with slower growth in China and the US, and slight growth in Europe. The EU is expected to experience persistently high inflation, which will impact private consumption. In the US, inflation has driven consumers towards value-focused channels, and seafood inflation has dropped faster than other food categories. In the EU, household expenditures on seafood products have increased, but import volumes have decreased [3ca0971c].
Despite these challenges, the global aquaculture industry remains optimistic about the growth of major species such as shrimp, salmon, and tilapia. However, market prices and the recovery of seafood demand remain uncertain. The World Bank predicts stronger growth in Europe in 2025, excluding Russia and Ukraine [3ca0971c].
In May 2024, U.S. Senator Dan Sullivan convened a roundtable meeting with Alaska community and fisheries leaders, Commerce Secretary Gina Raimondo, and other senior federal officials to discuss the impact of the global seafood market crisis on Alaska businesses, coastal communities, and fishermen. The meeting focused on federal policy initiatives to improve the competitive position of U.S.-produced seafood in global markets and ensure the long-term viability of the U.S. seafood industry. Alaska's commercial fishing industry is facing the worst market conditions in decades due to high inventory, Russian dumping of seafood, and high production costs in the U.S. Specific actions were discussed to help the fishing industry withstand the global market collapse. The meeting included representatives from the United Fishermen of Alaska, Trident Seafoods, Silver Bay Seafoods, Aleutian Pribilof Island Community Development Association, Bristol Bay Economic Development Corporation, Aleutians East Borough, and Unalaska. The Alaska seafood industry employs approximately 48,000 workers and provides a tax base for over 142 communities. The meeting was attended by Commerce Secretary Gina Raimondo, as well as officials from the Commerce Department, NOAA Fisheries, the Department of Agriculture, the State Department, and the U.S. Trade Representative [aebfefba].
In terms of specific companies and developments, Phillips Foods plans to expand further into crab and lobster with its purchase of a new facility in Canada. Mowi and SalMar have experienced lower harvests and earnings in the first quarter of 2024 due to biological issues. On the other hand, Profand reported increased earnings in 2023 despite flat sales. Blumar has signed a USD 260 million loan with a focus on gender equity and sustainability [3ca0971c].
The seafood industry continues to face human rights challenges and is exploring sustainable and active packaging technologies [3ca0971c].
The value of Japanese seafood exports to China in fiscal 2023 fell to about 40% of the previous year’s level. Exports declined after the Chinese government suspended all imports of Japanese marine products to protest the discharge of treated water from the Fukushima No. 1 nuclear power plant. The value of Japanese marine product exports fell 17% from the previous fiscal year to ¥218.5 billion, marking the first decline in three years. Seafood exports to China declined by 57% from ¥74.6 billion in fiscal 2022 to ¥32 billion in fiscal 2023, the largest decline on record since fiscal 1988. Exports of crab, salmon, and bonito were down 90%, 88%, and 77%, respectively. The United States became Japan's largest seafood export destination in fiscal 2023 with a 22% share, surpassing China's 15% share. Japan's seafood exports to China are expected to be almost zero in fiscal 2024 if the ban is not lifted. Japan aims to expand exports of agricultural, forestry, and fishery products to ¥2 trillion in 2025 and ¥5 trillion in 2030. Japan needs to rebrand and expand exports to countries other than China [1a9fe23d].
Retail seafood volumes and dollar sales are down due to inflation. FMI's Power of Seafood report highlights opportunities for supermarkets to emphasize the nutritional, sustainability, and meal solution benefits of seafood. Home-cooked seafood now constitutes 59% of consumption, up from 53% last year, while restaurant-prepared seafood meals declined from 47% to 41%. Two-thirds of seafood consumers prioritize nutrition and health, with 74% valuing sustainability. Despite relatively flat prices for seafood in 2023, seafood unit sales are back to 2019 levels. Cost-effective deli prepared seafood products performed better than fresh and frozen seafood. Retailers should highlight seafood's health benefits and offer sustainable, quality products at competitive prices [17442d5d].
Overall, the persisting inflation and economic challenges in 2023 have significantly influenced seafood consumption and the outlook for 2024. The industry remains hopeful for growth in major species, but uncertainties surrounding market prices and seafood demand persist.