Frozen Sockeye Market

First wholesale value of the Alaska salmon industry was $1.05 billion in 2008. Frozen H&G sockeye remains the most valuable single-species salmon product produced in Alaska, with first wholesale value of $180 million in 2008.

 

The frozen sockeye market remains a subject of keen interest for stakeholders; sockeye will likely continue as the top-value Alaska salmon product in the foreseeable future

 

Market Background: Changing Export Patterns through 2007

The export and sales patterns of 2004-2007 are the most relevant for illustrating recent market changes for Alaska frozen sockeye. Harvest volume was strong in all four years (42-47 million sockeye per year) and production of frozen H&G sockeye was stable, ranging from 82-96 million pounds. Market conditions throughout the period reflect the modern era, with a long-established and plentiful supply of farmed salmon and generally positive regard for wild salmon.

 

Traditionally, the bulk of Alaska frozen sockeye production was exported directly to Japan, immediately after the season. This pattern remained in place through 2004 and 2005, when well over two-thirds of Alaska���s frozen sockeye production was exported directly to Japan by the end of September. This changed in 2006 when frozen sockeye exports to Japan fell sharply to just 34 percent of production and declined further in 2007, to 28 percent of production.

 

The initial conclusion from these export figures is that sockeye consumption in Japan fell dramatically. But the decline was probably far less dramatic than the export figures suggest. Consistent with global food industry trends, some labor-intensive seafood processing migrated from Japan to cheaper labor markets. Through September 2007, U.S. exports of sockeye to Japan totaled 25 million pounds, but sockeye exports to China were a close second at 21.5 million pounds. It is reasonable to assume that a significant volume of Alaska sockeye enters Japan via secondary processing in China.

 

Current Situation: 2008 and 2009 Sockeye Exports

U.S. frozen sockeye exports to Japan rebounded in 2008. Despite an 18 percent harvest decline for Alaska sockeye, Japan received 36 million pounds of U.S. frozen sockeye exports in 2008, up from 28 million pounds in 2007.

 

Estimated frozen H&G sockeye production from the 2009 season is 85 million pounds. Through September, 37 million pounds had been exported to Japan.

 

 

 

Pace of Sales

The Alaska Salmon Price Report tallies sales when product passes outside the processor���s affiliate network. This distinguishes actual sales from exports to bonded cold storage overseas, and enables a rough estimate of the pace of frozen sockeye sales.

 

In 2004, when the traditional sales pattern still revolved around selling most of the frozen sockeye pack to Japan immediately after the season, frozen H&G sockeye sales through August amounted to 66 percent of the year���s production. As that traditional pattern changed, pace of sales slowed, apparent in the declining percentage of frozen H&G production sold by the end of August: 53 percent in 2005, 45 percent in 2006 and 36 percent in 2007. Pace of sales began to rebound in 2008, when 45 percent of the H&G frozen pack was sold during May-August.

 

The pace of frozen sales continues to improve for the 2009 sales season. The H&G frozen pack is estimated at 85 million pounds and through August, 54 percent of the pack (46 million pounds) has already been sold. This represents a five-year high pace of sales.

 

U.S. sockeye exports to Japan in the remaining months of CY 2009 will be of particular interest. The strong pace of sockeye sales through August, coupled with the 10-year-high average wholesale price, strongly suggest the sockeye market is firming. U.S. sockeye exports to Japan during October ��� December are typically very modest, but with continued production problems in Chile, the market supply of farmed coho remains low. There is potential that Japanese buyers may need to purchase additional sockeye.