The International Pacific Halibut Commission released its catch limit recommendations January 23. The 2006 catch limit for Alaska is 55 million pounds, down from 59 million pounds in 2005 and 61 million pounds in 2004.
The halibut catch limits in area 2A (Washington, Oregon) and area 2B (BC Canada) total 14.6 million pounds, essentially unchanged from 2005. The halibut season will open March 5 and close November 15.
2006 marks the first significant reduction in Alaska halibut supply in six years. After four consecutive years with the Alaska catch limit at 61 million pounds (2001 – 2004) the quota dropped to 59 million pounds in 2005, a modest decline of 3 percent. The 2006 Alaska catch limit of 55 million pounds represents a more significant decline, down 10 percent from the 61-million-pound point.
The reduction in supply may prove to be a test of users’ price tolerance for halibut. Ex-vessel prices for Alaska halibut are at or near record-high levels. Most Alaska halibut sold at ex-vessel prices well over $3 per pound in 2005, with prices for a small volume of fish reaching as high as $4 per pound at the close of the season.
Peak prices of March and November represent a relatively small volume of halibut, slightly under 9 percent of Alaska landings in 2005. May through September are the peak landing months, when about 70 percent of halibut is delivered. Prices during those months tend to reflect the broader market, including the frozen market.
Logically, reduced supply would increase prices in an atmosphere of strong demand. Demand for halibut appears quite strong, indicated by five years of stable supply (59 – 61 million pounds annually from 2001 to 2005) and a rising price trend throughout the period. However, there are anecdotal reports that users are at or near their price tolerance for halibut and that further price increases may send some users looking for alternate products. Naturally, those reports will be put to the test when substantial landings volume begins to cross the docks in April and May. If users are indeed at their price tolerance, the modest reduction in quota may not translate to further increases in ex-vessel prices during mid-season, when most halibut is landed.
The Alaska catch limit is reduced 4 million pounds, but distribution of the catch limit reduction (by area) suggests the decrease will not fall entirely on fresh or entirely on frozen supplies. 2.9 million pounds of the catch limit reduction is in areas 2C, 3A and 3B, where landing ports generally have good transportation access to fresh markets and the majority of product goes to market fresh. The remaining 1.1 million pounds of catch limit reduction is within area 4, where transportation options are much more limited and halibut is more likely to be frozen.
