Pacific cod is an important component of Alaska’s groundfish production. Roughly 30 percent of non-pollock groundfish harvests in Alaska are Pacific cod. Like salmon a decade ago, the wild cod industry faces a near-term challenge from the aquaculture sector. Significant volumes of cultured cod are presently being raised in at least four countries. Several experienced seafood aquaculture firms are involved in farmed cod development. Investment and development is occurring to support a tremendous expansion in cod production in the next two decades.

Because the development of farmed cod is occurring largely in the private sector, comprehensive third-party data on projected farmed cod production does not exist. However, this report draws upon regional data, media reports, conference proceedings, and research by the United Nations Food and Agriculture Organization and its affiliated research arms, to construct a picture of the likely scale of industry expansion and projected cod volumes in coming years. While the data presented here may not be comprehensive, it presents a valuable picture of the growth prospects for a product that is going to be a major competitor for Alaskan production in the near future.

Current Global Cod Production

Global production of wild cod has been steadily declining for more than four decades. Capture production fell from a high of 4.1 million metric tons (9 billion pounds) in 1968 to a total production of less than 1.3 million metric tons in 2004. That production is anticipated to continue its decline, given the continued decline of Atlantic cod fisheries in Europe and Canada. (On June 6, for example, the International Council for Exploration of the Seas, an intergovernmental research body representing Atlantic nations, recommended that Barents Sea cod quotas be cut by one-third, or 162,000 metric tons.)

Pacific cod production, on the other hand, has remained relatively stable. The harvest fluctuates annually with natural stock variations. The United States (Alaska) harvests the largest portion of the global catch, though Russia, Japan and South Korea also take significant volumes of Pacific cod. Average global production from 1995 to 2004 was 387,000 metric tons (854 million pounds). As Atlantic stocks have declined, Pacific cod has become a much more important component of global cod production.

In 2004, Alaska supplied about 21 percent of world cod production.

Alaska Cod Production

Alaska’s annual cod production also fluctuates; roughly between 200,000 and 350,000 metric tons of Pacific cod (about 440 million and 770 million pounds). The average harvest from 1995 to 2004 was 269,000 metric tons. The fishery is prosecuted by numerous gear sectors, including trawl (both shore-based and catcher-processor), longline (shore-based and catcher-processor), pot, and jig. Cod is a target fishery, but is also harvested as a non-directed (bycatch) specie in a number of other fisheries.

 

Farmed Cod Production

The concept of cod farming is not a new one. Norway made some of the first attempts at farming cod in 1975. The production relied upon fingerlings raised from naturally spawned eggs, and proved to be financially unfeasible.

However, continued development of aquaculture techniques, combined with decreasing cod supply and favorable market conditions have made cod a more reasonable investment in recent years. Worldwide aquaculture production increased 2400% from 2000 to 2004 alone, according to the United Nations Food and Agriculture Organization—from 169 mt to 3,884 mt. All reports indicate that volumes increased substantially in 2005 (likely by about 100%), and again in 2006.

Harvest of farmed, market-size Atlantic cod in 2005 amounted to about 3% of Alaska Pacific cod production.

System Inputs: Wild cod and broodstock

Broodstock programs have been developed in multiple countries including Norway (Cod Culture Norway), Canada (Atlantic Cod Genomic and Broodstock Development), and Iceland (IceCod). While cod farming had been reliant upon the capture of juvenile cod for raising in the farm environment, a number of major producers have made the break into broodstock-based production. The Norwegian company MarineBreed Ltd. has been working on developing genetically modified Atlantic cod stock.

Some capture-based farming does still occur, however. For example, some Icelandic producers raise wild juvenile salmon in farm systems. Since 2002, the Icelandic Ministry of Fisheries has allocated 500 tons of the annual cod quota to provide stock for farming.

Production Forecasts

These forecasts draw on diverse sources, and should be considered estimates. Data on exact production prospects is unavailable.

Reports on forecasted cod production include production by country as well as by company. However, some of the companies involved in farmed cod production (particularly Nutreco, a Netherlands-based firm, and the giant in cod farming) have holdings in multiple countries.

Canada, Iceland, Norway, and the United Kingdom presently have significant activity in cod farming. The Shetland Islands, in Scotland (UK) are home to Johnson Seafarms, a salmon farming giant that has made the move into cod farming. Presently, Johnson is focusing on the production of an organic cod. Johnson hopes to supply 10 percent of demand in the UK (presently about 300,000 mt in total) by 2012. This would be approximately 30,000 mt of production, or 66 million pounds of fish.

Marine Harvest, a subsidiary of Nutreco (Stolt-Nielsen also holds 25 percent of the firm), is positioning for major growth. The company purchased Cod Culture Norway, a hatchery, to assure stock inputs for its farms. The company plans on producing as much as 700,000 mt annually (1.5 billion pounds) of cod within 12 years. This volume approaches today’s worldwide Atlantic cod capture production, and far outreaches worldwide production of Pacific cod.

In the near term, Norwegian production (of which Marine Harvest is the major component) is anticipated to reach 30,000 mt (66 million pounds) in 2008. The country anticipates production of 100,000 metric tons annually from 2010 to 2015. It is important to note the discrepancy between Nutreco/Marine Harvest production projections (700,00 mt) and the production projections for Norway in general, which are lower. The discrepancy may mean that Marine Harvest/Nutreco anticipate that some of their growth in cod farming will occur outside of Norway. (The company is already established in fish farming in numerous European and North American countries with suitable climates to cod farming, so this would be a reasonable assumption.) However, the discrepancy may also reflect some of the imperfection of the estimates.

Cooke Aquaculture, a New Brunswick fish farming company, has been producing farmed cod. It harvested its first fish prior to the Boston Seafood show in March 2006 for display at the event. The company has recently expressed interest in purchasing a closed seafood plant in Newfoundland, in part for use in cod processing. Media reports from this spring indicated that Cooke had 70,000 market-ready cod in its pens—about 175 metric tons of fish.

The United Nations reports that Canadian production estimates forecast growth of cod farming in that nation to 128,000 mt by 2020.

In the United States, cod farming has thus far been limited to experimental efforts by the University of New Hampshire. Cooke Aquaculture owns salmon farms in Maine; no information is available about the potential for cod farming at any of its U.S. locations.

It is possible that NMFS’ initiative to stimulate offshore aquaculture in the United States could lead to domestic cod farming. Still, no data was available on projected production in the United States.

Possible Setbacks

While cod farming appears to be looking at significant prospects for growth, some variables may temper those prospects. In February, the CEO of Nutreco noted that the strong market for salmon could slow growth in the cod sector. To the extent that businesses are profiting in their current salmon-based business models, they may be less willing to invest in new developments.

Likewise, as more farms are established and more fish are living in farmed environments, the industry may face additional challenges from disease. In February, Marine Harvest reported that a new disease had affected a portion of its cod stocks.

The Sum of it All

The variety of sources and the overlap between national and company estimates makes it difficult to provide an overall hard-data estimate on cod production in coming years. However, the available data does point toward a significant trend—substantial growth in farmed cod, and a likelihood that cod farming will surpass wild harvest of cod as the most significant source of cod in the next two decades.

Eurofish, a non-governmental seafood market and trade organization associated with the United Nations, reported in April 2003 that “some market researchers are… speculating openly about worldwide production volumes of between 1 and 2 million tonnes of farmed cod by the year 2015.” Given projections by several of the global firms, these estimates may prove quite reasonable.

With a total annual production of between 200,000 and 350,000 metric tons of Pacific cod, Alaska will certainly be impacted by this major development in the aquaculture industry.