Preliminary Canned Salmon Production and Inventory Estimates
Pack estimates in this issue of the bulletin are preliminary, as statewide harvest figures are not yet finalized. Pack estimates (and resulting inventory figures) are replaced with actual production figures published in the Annual Alaska Salmon Production Report, typically released by Alaska Department of Revenue in early March.
Carryover figures entering the 2008 sales season are considered final, as they are calculated using finalized ASPR data for previous years��� production and wholesale volume.
Inventory estimates follow the ���sales season,��� which begins in September of the harvest year and ends in August of the following year. This is consistent with the production season for canned salmon and with reporting periods for the Alaska Salmon Price Report. The 2008 sales season began September 1, 2008 and will end August 31, 2009.
For ease of discussion, all can sizes are converted to a single measure: 48-tall case equivalent. The 48-tall case equivalent captures production and sales volume of all four standard can sizes for canned pink and canned sockeye.
Canned sockeye production from the 2008 season is estimated at 1.05 million 48-tall case equivalent. September 1 inventory is estimated at 1.31 million 48-tall case equivalent.
September canned sockeye inventory has been relatively steady, at approximately 1.3 million cases in three of the last four years. Although 2007 canned sockeye production was unremarkable at 1.2 million cases, the growing carryover figure pushed September 2007 inventory to 1.46 million.
While the 2008 sales season opens with a significant carryover from the previous year, production is estimated at 1.05 million, down nearly 200,000 cases from the five-year average on account of the modest decrease in 2008 sockeye harvest. This brings September 2008 inventory in line with the five-year average.
The 2009 season projection for the Bristol Bay sockeye fishery calls for a harvest of 24 million reds, down from the four-year average harvest of 28 million. This represents a decrease in raw material supply for canned sockeye production in 2009, but the long period of stable inventory and sales volume suggests that a substantial change in the balance of supply and demand is unlikely in the short term.
Canned pink salmon production for the 2007 season is estimated at 1.5 million 48-tall case equivalent and September 1 inventory is estimated at 2.4 million 48-tall equivalent.
While canned pink production was relatively strong at approximately 2.8 million cases in 2007, that volume was largely the result of a near-record harvest of 144 million pink salmon. The product-form composition in 2007 was nearly 50/50 canned and frozen. Five years ago, with product-form composition closer to 75 percent canned, a pink harvest of 144-million fish would have produced a canned pack of nearly 4 million cases.
In 2008, the harvest was a modest 84 million pinks and the effect of the product-form shift between canned and frozen pink salmon was fully realized; the canned pink production estimate of 1.5 million cases is the lowest in 20 years.
The five-year average of canned pink sales volume for the sales season (September ��� August) is 2.8 million 48-tall case equivalent. With canned pink inventory estimated at 2.4 million, it is reasonable to expect continued firming of canned pink wholesale values. This is supported by recent activity. The May-August average case price of $58.95 is a 15-year high point, while sales volume for the period is slightly above the 5-year average.
However, the canned pink market has proven to be price sensitive in the recent past. With a strong pink harvest anticipated in 2009, it is also reasonable to expect that some buyers may adopt a ���wait and see��� strategy, anticipating a large canned pack in 2009. While the product-form shift to frozen pinks seems an obvious flaw in that strategy, the recent decline in frozen pink exports does lend some merit to that approach.
In either case, it is clear that the current estimated inventory of 2.4 million cases is below the 5-year average sales volume, which creates upward pressure on wholesale prices.