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Fates upon the waters.

Fates Upon The Waters

FOR THOSE WHO EARN THEIR livings in Alaska's fishing industry, 1989 was a surprising, record-setting year in more ways than one. It marked the year of the largest salmon catch of all time, according to the latest state Department of Fish and Game statistics. In 1989, fishermen landed 156.2 million salmon, weighing nearly 700 million pounds.

That catch was nearly 10 million more salmon than tallied in 1985, the previous record-smashing year. Nearly 30 million more fish than preseason predictions called for, the harvest also proved profitable for most Alaska fishermen.

According to still incomplete winter estimates, fishermen netted $505 million from last year's catch. Although $237 million less than fishermen received in 1988 - a year of historic high fish prices - the sum is the second highest take in state history. The payout does not include the millions of dollars paid by Exxon to compensate fishermen for not fishing as a result of the record-setting March 24, 1989, wreck of the tanker Exxon Valdez. The Good Friday grounding of the supertanker on Bligh Reef spread 10.8 million gallons of crude oil around the waters of Prince William Sound.

The oil spill cast a long shadow over the 1989 season, forcing commercial fishing closures in the Montague, Southwestern and Eshamy districts and parts of the Northern and Northwestern districts of Prince William Sound. It also caused the complete closure of the Central District drift gillnet fishery in Cook Inlet and the almost complete closure of fishing in waters around Kodiak.

The question, as the state prepares to mark the one-year anniversary of the spill and awaits late spring weather to see how well Mother Nature's crashing waves broke up oil over the winter, is what the spill's aftereffects will mean to the state's fishing industry this summer. Another key question is what the season will be like from the standpoint of fish availability, price and marketability, notwithstanding the residual effects of the spill.

The second question appears to be the easier of the two to answer. Fred Richards, senior vice president of National Bank of Alaska in Seattle and an expert on fish markets, says, "It looks like Southeast fishermen and processors could be especially hard hit this year, while it could be an average year for Kodiak, assuming the oil spill does no further damage. It is not going to be an easy year for the industry, that's for sure."

Adds Merry Tuten, former director of the state's Alaska Seafood Marketing Institute, "There are no more easy years on tap for the Alaska fishing industry. It has become unbelievably competitive in the marketplace, and the competition is only going to get worse, not better. With all the new players and all the new products in the marketplace, 1990, regardless of fish returns, is guaranteed to be a tough year for the Alaskan industry."

Geron Bruce, executive director of the United Southeast Alaska Gillnetters Association, based in Juneau, says, "No one is abnormally apprehensive about 1990. Still, everything appears to be shaping up to cause 1990 to be a challenging year. As a fisherman, you have to be concerned when the forecast is for reduced runs, when prices last season fell sharply and when inflation, notably price hikes for diesel fuel, appears guaranteed. It could be a very interesting year."

According to the state's preliminary catch projections, due to be finalized in April, Alaskans may see a harvest in 1990 of just two-thirds of 1989's record catch. According to the initial estimates by the Alaska Department of Fish and Game, salmon harvests this summer should hit about 106.4 million, a catch that would top 1988's harvest of 100.1 million but fall significantly below the levels recorded yearly from 1980 through 1986.

One way to forecast the 1990 season is to look back on why 1989 was such a bumper year for fish, if not necessarily for fish prices. Last year's catch was so high in large measure because of the unexpected return of pinks to southern Southeast waters. In 1989, more than 59.4 million pink salmon returned to the Panhandle, a catch that when final-adjusted fish tickets are logged could well top the all-time record of 60 million pinks that returned to the region in 1941. More importantly, the return was three times the number of pinks that returned to the region in 1988. Overall, Southeast fishermen caught 65.8 million salmon valued at about $128 million, a catch falling just shy of the 67.8 million record catch of 1941.

Similarly, in 1989 Bristol Bay had its fourth best run of sockeye salmon ever, resulting in its second largest harvest. In those southwest fishing grounds, 44 million red salmon returned to spawning streams, compared to the preseason forecast of just 28.9 million. All districts in the bay, except Togiak, experienced greater than expected sockeye runs, with fishermen harvesting 28.7 million fish. That catch trailed only the 1983 harvest of 37.4 million, allowing the refrain of "Happy Days Are Here Again" to resound from Naknek to Dillingham after 1988's relatively poor returns.

Another bright spot in 1989 was Cook Inlet sockeye returns: The inlet produced 5 million reds, the fourth highest harvest on record. Given the oil-spill-induced problems, the red harvest accounted for 95 percent of the fishing income taken home by fishermen in the inlet.

Oil Tainted. Elsewhere, however, 1989 was a disappointing year, thanks in large part to the wreck of the Exxon Valdez. While hatchery harvests were great - for example, yielding one-third of the fish produced in Prince William Sound - the 1989 harvest was only 24.4 million fish - just half of the preseason forecast.

The oil spill took its biggest toll at Kodiak, where only three geographically isolated fishing districts were open to fishing. Just 7.8 million fish were landed - half of the preseason forecast and a decrease of 60 percent from 1988.

For Kodiak fishermen, however, one bright spot might be fishing in 1991, as an estimated 20 million pinks escaped upstream to spawn, compared to the normal escapement of about 4 million. That means that, barring a severe cold snap this spring, returns of pinks that take two years to mature could be plentiful the summer after this one.

For Kodiak, the state's 1990 forecast is somewhat promising, if not spectacular. Kodiak fishermen are expected to catch 11.8 million pinks, part of the nearly 15 million fish likely to be available for netting this summer in the island region.

Jeff Stephans, executive director of the United Fishermen's Marketing Association of Kodiak, says, "Overall it looks like a good, stable year. I don't see any big booms. No one will get rich. But we have a very diversified fishery, dependent not just on salmon, but on crab, halibut and blackcod, so I think most fishermen think 1990 will be OK. It's the future they are worried about."

Oil spill dangers aside, Kodiak's preseason forecast is good news. Other areas, however, have far less to look forward to.

Returns and Rewards. In Southeast, pink runs stemming from exceptionally poor returns in 1988, are expected to be dismal. According to the preseason forecast, just 9.1 million pinks may be available for harvest in the region, a drop of nearly 50 million fish. While the chum salmon forecast is slightly up - largely due to expected hatchery returns - the region should net just 15.8 million fish, less than a quarter of the fish that so overworked fishermen and fish processors this past year.

Meanwhile, sockeye forecasts are back to normal. Just 28.5 million reds are expected to be landed statewide - 14.7 million in Bristol Bay and 4.3 million in Upper Cook Inlet. That will give processors in both the United States and Japan, especially, time to work off excess inventories caused by last summer's 44.5 million red harvest - the largest catch of reds since 1983.

One of the few bright spots in the state's forecast in Cordova, a town hard hit last summer by the oil spill, at least as far as pure fishing revenue is concerned. This year, the Cordova area is expected to have an available harvest of 26.2 million pinks - the lion's share of the 29.3 million salmon harvest predicted for the Prince William Sound area this summer.

The forecast, however, takes into account only biological issues. It doesn't handicap the season's key question - how much of the remains of the Exxon oil spill will refloat from beach gravels during this spring's high tides to form mousse patties that foul gear, potentially contaminate fish and, thus, close seasons. As of late winter, there is no clear consensus on how remaining oil will affect fish returns this summer.

One big concern of fishermen is what they will be paid for their fish. Even though fish harvest volume was way down in 1988, fishermen sighed all the way to the bank; the weak American dollar (compared to the Japanese yen), strong consumption and small inventories left from 1987 caused the Japanese to bid up the price of Alaska seafood to historic levels. As a result, fishermen realized nearly $750 million in ex-vessel revenue. This past summer, however, the price boomlet burst as prices were cut by between one-third and one-half.

According to United Southeast Alaska Gillnetters Association's Bruce, sockeye that sold for $3.50 a pound in 1988 brought $1.75 a pound last summer. Per-pound pink prices that ranged from 75 cents to $1 in 1988 averaged 38 cents last summer, while chum prices fell to an average of 65 cents a pound from a record $1.20 a pound in 1988. Many fishermen in numerous areas compensated by landing higher volumes.

According to Herman Savviko, statewide catch statistician for the Alaska Department of Fish and Game, prices fell because of high fish inventories left from the previous year and because of the strengthening U.S. dollar. Although the dollar fell 40 percent in 1988, it gained back 20 percent of its value in 1989.

With nearly 100,000 metric tons of Alaska salmon in Tokyo freezers at the start of the season, inventories were a key to the price drops. Other depressing trends for 1989 were the increase in Japanese hatchery production of chum salmon and the rise in sales of internationally farm-raised salmon. Last year Norway sold about 150 metric tons of pen-reared salmon in markets that historically had purchased Alaska frozen fish.

Dave Kelley, executive director of the Alaska Trollers Association, says, "There is no question that fish farming internationally hurt us last year. We had competition from Norway in Japan and from Chile's pen-reared fish everywhere else. It hurt us on the fresh market, especially in the price for cohos."

Bruce is hopeful that prices in 1990 will rebound from 1989, when he believes prices fell too far to counter the sharp rises of 1988. But National Bank of Alaska's Richards is far less hopeful. "I just don't anticipate any price increases to fishermen this year," he says.

"Canned and frozen inventories, while the fish are moving, are still high. Processors have fixed costs to operate plants, but especially in Southeast, they are going to have extremely low fish volumes to spread those costs over this summer. It is just not the kind of year where fishermen can count on big price increases to help them."

Worse for fishermen is news that besides salmon, stocks of halibut likely also will be down - reducing one usually profitable way for fishermen to offset downturns in salmon-produced revenues.

The International Pacific Halibut Commission was to meet last month to set halibut quotas for the 1990 season, and predictions were that the quotas for harvest of the tasty flatfish would fall by a least 3 million pounds, making for slight drops in the quotas in all districts of Alaska waters. Last summer the quota coastwide for halibut was 64 million pounds. That was expected to drop to 61 million pounds for this summer, after surveys last year found more undersized halibut and fewer large fish than expected. Bottomfish harvests also were expected to fall, although crab stocks may rebound ever so slightly.

Wave Watching. Taken together, the supply picture, harvest forecast and competitive situation all point to 1990 being a stormy year for the 35,000 men and women whose livelihood come from the sea in Alaska. And with Exxon having yet to agree to resume large-scale cleanup efforts of the remaining oiled beaches in Prince William Sound, there may well be fewer opportunities for fishermen to make money from chartering their boats for spill cleanup work. On top of those issues, fishermen this winter are concerned about a myriad of regulatory-management issues.

Fishermen at False Pass are concerned about proposed new regulations to safeguard fish bound for Bristol Bay. Seiners and gillnetters in the Juneau area are worried about possible state Board of Fisheries regulations to guarantee more fish make it back to a new Juneau hatchery.

Trollers are concerned about ongoing negotiations to revamp the U.S.-Canada salmon treaty, because they want a bigger slice of rebounding chinook salmon stocks. For years, trollers have been frozen into catching just 263,000 king salmon statewide to help stocks rebuild in British Columbia, Washington and Oregon. And trollers this winter are chafing at restrictions that kept them on the beach for an additional 10 days the past two summers, not allowing the troll king season to open until July 1. That compressed the season to just 13 days last year before the quota was hooked.

"Given that short of a season, if you aren't right on the fish at the start, you end up having a bad year financially," says Alaska Trollers Association's Kelley.

At Kodiak, fishermen are scared again over talk of the imposition of a limited-entry permit program to preserve halibut and blackcod stocks. United Fishermen's Marketing Association's Stephans says talk of limited entry on the fisheries terrifies fishermen because they need to fish in a host of different fisheries to make a living. Opposition from Kodiak fishermen was largely responsible for killing plans for imposition of limited entry for halibut six years ago.

Still, fishermen appear unusually optimistic heading into the year. "We have learned that we can no longer trust the state's preseason harvest forecasts. In 1988, they overestimated the runs (by about 40 million fish), while last summer they underestimated the runs by 30 million fish - totally missing the mark on pink returns to Southeast. Given that our escapement is now measured largely by aerial surveys, the forecasts have no reliability," says Bruce.

Echoing the thoughts of fishermen from the Yukon to Ketchikan, he adds, "We'll just have to see how the season goes and hope for the best."

PHOTO : Fishermen transfer a load of crab for delivery to a processor.
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Title Annotation:Alaska's 1990 fishing forecast
Author:Kleeschulte, Chuck
Publication:Alaska Business Monthly
Date:Mar 1, 1990
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