A prominent fisheries journalist is calling into question the transparency of how much Alaskan salmon fishermen get paid for their catch.
John Fiorillo is the executive editor of Intrafish, a global news bureau covering seafood, commercial fisheries and aquaculture industries worldwide. He argues that the secretive nature of price setting in Alaska salmon fisheries strains the relationship between fishermen and processors, and puts everyone on precarious financial footing.
Fiorillo joined KDLG’s Corinne Smith to talk about why seafood companies don’t usually set a base prices, and why he thinks it’s time for a change.
Listen:
John Fiorillo: Yeah, it’s more cultural and tradition, then there’s a great reason for it, I guess you would say it’s been the way it’s always been. It’s been that kind of situation. And it’s been hard to change, because the processors have the upper hand. In a lot of cases, the fishermen are independent, but they deliver to the processors, and subsequently, they have to get paid. And processors have been setting the price for years and years and years. And it’s just been the way it has been.
Corinne Smith: Some companies have set a price ahead of the season, like Peter Pan Seafoods for the past two years. And what was the impact of that? Like, what were the benefits? And were there any drawbacks for them disclosing a price?
John Fiorillo: Well, Peter Pan had just gone through a sale and new owners, they were trying to make a splash. They were trying to rebuild the fleet that delivered them, particularly in the bay. And so yes, they broke tradition, so to speak. I want to say it was a couple of weeks before the bay really opened, really got going, that they published the price. And everybody followed, which was remarkable, really, to see. It just doesn’t happen, it hasn’t happened, right? So there were no real repercussions. I think they got some good vibes and PR out of it, so to speak. And then again, they did it last year. And it appeared that we were on the road to some sort of preseason price discovery, with everything, but that hasn’t been happening. So we’ll see this year. We’re in the middle of June, if they’re going to do it, I would imagine they do it in the next week to ten days. But we have no knowledge about whether they’ll do it again.
Corinne Smith: So you’re saying it was a gesture of goodwill, and beneficial to the fleet, I know fishermen were pretty happy to hear it. So do you think there were drawbacks to that base price set ahead of the season?
John Fiorillo: Well, I guess the drawback is now we find ourselves in the situation we’re in. So instead of them being able to post, what most people considered a fair, good price the last two years. This year, they would have to go out and post a price ahead of everybody else that is a real slash, I mean, it may be as low as 50 cents a pound. It may be more than that, but it’s not going to be $1.15 like it was last year. So nobody wants to be that company that goes out and puts a price like that out ahead of everybody else. And that probably is the drawback that they could be facing.
Corinne Smith: And then this year, especially fishermen are very frustrated with the rumors of a potential dramatic price drop this year. Can you talk about how this price secrecy affects fishermen and what that uncertainty does to the industry?
John Fiorillo: Yeah, I mean, they’re out there doing what they love. They love to fish, but they don’t know how much they’re going to get paid for their fish. It’s just a very weird dynamic. So over time, it builds anxiety and builds resentment, it builds suspicion. And in a time like we are now, the price is under a major correction, that gets amplified. Now, to be fair to the processors. They too are under a lot of duress this year, they that was a massive, as you know, is a massive haul in Bristol Bay last year, 60 million fish record. All that fish came into the market. Fishermen were largely not put on limits last year, which, you know, with the processors took all the fish and other words, and all that fish head to the market, just as inflation was peaking. Consumers were closing their wallets and being very careful about their spending. And the processors were stuck with all this fish in inventory that they had to carry at a high cost, and they couldn’t get rid of. So the market itself, whether it’s the US market or the market in Europe, which is another strong market for Alaska salmon. There’s no demand, and there still isn’t. Demand has not bounced back. So although many of the processors say they sold their pack, probably at a massive discount. It’s still an inventory challenge for them. And a demand challenge on the consumer side, which, nobody can fix that at this point.
Corinne Smith: And you argue that more transparency from processors or discussing those market conditions with the fleet would also be beneficial for processors.
John Fiorillo: Oh, absolutely. And for fishermen, they really will do themselves a service if they follow what’s going on in the salmon markets around the world. And keep in mind their big competitor is farmed salmon. And the salmon farmers around the world produce a lot more salmon than Alaska does. So their fish is entering a market with you know, the market has farmed salmon and it has wild salmon. And so there’s a lot of dynamics in that market that have to be understood and tracked. And I think fishermen would really help themselves if they paid attention to that, and I think the processors should help them. I think the processors should be more transparent. If they had told them earlier about all these inventory challenges, and the slack demand and all that, maybe it wouldn’t be such a shock. But I think both sides need to just talk to each other a lot more.”
Corinne Smith: And how would those discussions happen, do you imagine? Would it be more communications to the fleet directly from processors? Or perhaps talking more to the media, we would always love to hear more from processors as well. But yeah, what are some channels of communication that could be created and developed between processors and the fleet’s?
John Fiorillo: Yeah, and I think you’re right, I think the two need to speak to each other now, how that happens. I mean, there are models all around the country, all around the world where there are price boards that meet and there’s a kind of discovery of the price together. Some of these are government boards, some are just industry boards. I don’t know if that would be the solution in Alaska, and I don’t know that they’re, I don’t really have the solution, obviously. But to your point, there just needs to be some two way channel of communication throughout the year leading up to the seasons. So I think everybody is better prepared for times like these where it looks like the price is going to be really, really shaved.
Corinne Smith: And we do hear quite often, how fishermen wonder why Bristol Bay processors all set the same base price…
John Fiorillo: Yeah, well, they’re all selling into the same markets, whether it be the US market, Japan or Europe. So they don’t want to pay any more than the guy next to them. For the fish that are going to go to the same markets. I mean, it makes sense…that’s the essence of it, unfortunately.
Corinne Smith: What do you think it would take to sort of break tradition here with price secrecy, and move towards a more transparent model? more collaborative, maybe more communication? What do you think it would take to make this change?
John Fiorillo: That’s the million dollar question. I don’t know. Like I said earlier, I thought Peter Pan (Seafoods) was setting a new course. But what I did calculate, last year, the year before, was, well, what happens when the price drops like it’s doing now? So, I don’t know. I mean, the short answer is I don’t know. But I do know that both sides need to talk a lot more to reduce the hard feelings that are probably going to develop this year, over this price situation.
