Callander McDowell
Callander McDowell
reLAKSation no 405
Forecasting prices: We have just come across an old IntraFish industry report entitled ‘Forecasting Salmon Prices – getting the facts right’ written by Dr Atle Guttormsen of the Agricultural University of Norway and published in March 2002. We have always been a little sceptical about the ability to forecast salmon prices because there are so many unpredictable factors to take into account which is why if anyone could truly forecast what will happen to prices, the salmon industry would be much better placed to plan ahead.
The main conclusion of the twelve page IntraFish report is that long term price trends are to a very large extent determined by production cost. We would disagree and recommend that the author now looks at what is happening to farmed cod to see that this is not true. Currently, price trends appear to be estimated through the relationship with the known biomass but even this method is flawed. The reality is that no-one really knows what will happen to prices.
Recent reports suggest that prices are both going up and going down but it is likely that these movements are due to variation in local harvesting rather than any longer term trend. The only thing we can be sure is that if prices go too high, subsequent demand for salmon will fall and so will prices.
This week we have seen the first price movements for salmon in the UK retail market for some time. These are restricted to the fresh fish counter so that chilled prepacks continue to remain the same. We cannot say whether these small movements upwards are sufficiently significant to have an effect on demand but if the increases spread, then they will undoubtedly will.
These price increases were inevitable as salmon prices continue to soar. The question is for how long the sector can resist passing the prices onto consumers. Whilst there are indications that consumers are now returning to their former pre-recession shopping habits, consumers are still price wary. The market share of the cheap discounters, such as Aldi and Lidl, is now flat as consumers desert these stores in favour of the big four supermarket groups. Sainsbury’s and Morrisons are now showing growth and according to the Scotsman, Tesco has reported a return of consumer confidence with increasing demand for its premium ranges. This does not mean that British consumers are willing to buy salmon at any price.
What is even more unclear is whether US consumers will react in the same way if prices continue to rise. Currently, the expectation of increased demand for European salmon from the US market is the main determining factors in keeping salmon prices high. The ongoing problems in Chile are expected to lead to a shortfall in US supply. The big question is whether US consumers will pay the resulting higher prices to keep salmon on their plates.
The last time we looked at the US market in mid May (reLAKSation 398), there seemed to be plenty of farmed salmon around, so much so that many supermarkets were still promoting the fish with widespread price discounts. At the time, we did wonder whether such promotions would continue or would rising salmon prices make it too expensive to include in promotional activities?
Back in May, we found 46 stores promoting farmed salmon with prices around $6-7/lb and a further 15 stores promoting various Pacific salmon, most of which was previously frozen.
This weekend we have engaged in another gruelling whistle-stop tour around US supermarkets and found 34 stores still promoting farmed salmon at prices similar to those in May but this time the number of stores promoting Pacific salmon had increased to 35 and most of the salmon was being sold as fresh. This was not totally unexpected since what has changed since May is that the runs of Alaskan salmon have now begun, making fresh salmon available in the US market. The prices for Alaskan salmon are now much lower than in May but this is in part as many of the stores are offering the much cheaper Chum or Keta salmon, which is being sold under the more attractive Silverbrite name. Typical prices are around $4.99/lb which is lower than for comparable farmed Atlantic salmon fillet.
Stores selling farmed salmon
A&P, W New York NJ, Fresh Atlantic salmon portions Members save $1
Associated Supermarkets, Queens NY, Fresh farm raised Atlantic salmon fillet or steaks $7.99/lb
Balduccis, Washington DC, Fresh Signature Scottish salmon steaks $7.99/lb save $1/lb
Biggs, Cincinnati OH, Scottish organic salmon fillet $9.99/lb save $5/lb
Big Y, Worcester MA, Fresh Atlantic salmon fillet or steaks $6.98/lb
Breaux Mart, Gretna LA, Fresh Atlantic salmon fillets $6.99/lb
Brookshire Bros, Lufkin TX, Imported farm raised Atlantic salmon fillets $5.98/lb
Butera Market, Algonquin IL, Norwegian salmon fillet (may have been prev frozen) Family pack $5.49/lb smaller weights $5.99/lb
Cub Foods, St Paul MN, Ocean raised Atlantic salmon fillets $6.49/lb
C Town, Brooklyn NY, Farm raised fresh Atlantic salmon fillet or steak $7.99/lb
Dierbergs, St Louis MO, Atlantic salmon fillet $5.99/lb
Farm Fresh, Wilson NC, Fresh salmon fillet portions 4oz 2 for $4**
Giant, Silver Springs MD, Fresh Atlantic salmon steaks $5.99/lb
Grand Union, Nantucket MA, Fresh farm raised salmon steaks $6.99/lb
Harveys Supermarket, Montezuma GA, Farm raised salmon fillet $7/lb save $1.99/lb
Heinens Fine Food, Cleveland OH, Fresh farm raised Norwegian salmon fillets $9.99/lb save $2/lb
Jay C Food Store, Seymour IN, Atlantic salmon fillet $4.99/lb save $3/lb
Jewel Osco, Moline IL, Farm raised fresh salmon fillet. 6oz 2 for $7
Karns Food Stores, Boiling Springs PA, Scottish salmon fillet 6oz $3.99
Kings, Bernardsville NJ, Black Pearl Scottish salmon fillet $9.99/lb steak $7.99/lb
Lucky Stores, Napa CA, Whole Atlantic salmon Prev frozen $2.99/lb
Magruders, Vienna VA, Fresh salmon fillet $5.99/lb**
Mars, Baltimore MD, Fresh cut salmon fillets $4.99/lb**
Marsh, Fishers IN, Norwegian salmon fillets $6.99/lb save $2/lb
Pathmark, Staten Island NY, Fresh Atlantic salmon portions 5oz Members save $1
Price Chopper, Ploughkeepsie NY, Whole farm raised Atlantic salmon (frozen) $1.99/lb
Reasor’s, Tahlequah OK, Canadian fresh Atlantic salmon fillet $7.98/lb
Redners Markets, Dover DE, Fresh farm raised Atlantic salmon fillet $6.98/lb
Shaws, Darien CT, Fresh Atlantic salmon steaks $5.99/lb
Shoppers Food & Pharmacy, Centreville VA, Farm raised Atlantic salmon steaks $7.99/lb
Shoprite, Brooklwn NJ, Fresh farmed Atlantic salmon fillet $6.99/lb save $1/lb
Stop n Shop, Greenwich CT, Fresh Atlantic salmon fillets or stakes $5.99/lb
Ukrops, Stony Point VA, Farmed raised fresh salmon side $6.98/lb
** Not specified as farm raised or wild
Stores selling wild Salmon
Acme Markets, Fallston MD, Copper River wild Alaskan salmon fillets $12.99/lb
A&P, W New York NJ, Fresh Alaskan salmon fillet $5.99/lb
Alberstsons, Boise ID, Fresh wild Yukon RiverKeta salmon fillet $4.99/lb
Balduccis, Washington DC, Fresh Sockeye salmon fillets $16.99/lb save $3/lb
Bakers Supermarkets, Omaha NE, Pacific salmon fillet Prev frozen $3.49/lb 50% off
Bashas, Phoenix AZ, Fresh wild Keta salmon $2.99/lb (weather permitting)
BiLo, Soddy Daisy TN, Fresh wild Alaskan salmon fillet $6.99/lb
Broulims, Soda Springs ID, Fresh wild Alaskan Sockeye salmon fillets $9.99/lb
Brookshires, Sulphur Springs TX, Copper River Wild Sockeye salmon fillets $14.99/lb
Bruno’s Spanish Fort AL, Wild caught salmon fillets Prev frozen $2.99/lb
Busch’s, Tecumseh MI, Fresh wild Sockeye salmon fillets $14.99/lb
City Markets, Grand Junction CO, Fresh Alaskan Silverbrite salmon $3.99/lb
Dillons, Hutchinson KS, Pacific salmon fillet Prev frozen $3.49/lb half price
Felpausch, Vicksburg MI, Fresh wild Silverbrite Alaskan salmon fillets $4.99/lb save $2/lb
Fred Meyer, Portland OR, Fresh whole sockeye $5.99/lb
Genuardis, Norristown PA, Fresh Alaskan Sockeye salmon fillet $9.99/lb
Giant, Silver Springs MD, Fresh Alaskan Sockeye salmon fillets $11.99/lb
Giant Eagle, Toledo OH, Fresh wild Sockeye salmon fillet $12.99/kg
Glen’s Markets, Kalkaska MI, Fresh wild Alaskan Silverbrite salmon fillets $4.99/lb save $2/lb
Hannafords, Manchester NH, Sockeye salmon fillet Prev frozen $6.99/lb save $1/lb
Harris Teeter, Rock Hill SC, Wild caught Sockeye salmon fillets $12.99/lb save $7/lb
King Kullen, Hicksville NY, Alaskan Silverbrite salmon fillets or steaks $4.99/lb, Whole Silverbrite salmon $3.99/lb
King Soopers, Denver CO, Fresh Alaskan Silverbrite salmon fillet $3.99/lb
Macey’s Markets, Logan UT, Fresh wild Alaskan Sockeye salmon fillets $9.99/lb
Martins, Nappanee IN, Whole fresh Alaskan salmon $2.99/lb save $1/lb, fillets and steaks $3.99/lb save $2/lb
Pathmark, Staten Island NY, Fresh Alaskan salmon fillet $4.99/lb
QFC, Bellvue WA, King salmon fillet Prev frozen $14.99/lb
Rouses, Houma LA, Jet fresh wild Alaskan Sockeye salmon fillets $9.98/lb
Shoprite, Brooklwn NJ, Fresh Alaskan Silverbrite salmon fillet $4.99/lb save $1/lb
Superfresh, Milford DE, Fresh Alaskan salmon fillet $5.99/lb
Sweetbay Supermarkets, Tampa FL, Fresh Alaskan Silverbrite salmon fillet $5.99/lb save $2/lb
The Food Emporium New York Fulton Fresh Premium Canadian salmon fillet $9.99/lb
The Markets, Mount Vernon WA, Fresh Whole wild Sockeye salmon $7.98/lb
Waldbaums, Commack NY, Fresh Alaskan salmon fillet $5.99/lb
Yoke’s Fresh Markets, Mead WA, Fresh wild Keta salmon fillets $4.99/lb
Whether lower prices will encourage consumers to abandon farmed Atlantic salmon in favour of cheaper Chum salmon remains to be seen. However, it is not just Chum salmon that may encourage consumers to buy local Pacific species. IntraFish recently reported that fishermen were now only receiving half the amount they got at the beginning of the season for Copper River Sockeyes. Prices have fallen from $3.55 to just $1.75/lb and as a result, stores in Seattle were selling fillets at just $10.99/lb as compared with up to $30/lb at the start of the season.This week, we found more than one store selling Sockeye fillets for less than $10/lb. This is just about cheaper than imported Scottish and Norwegian salmon that is also on promotion.
The fall in Sockeye prices was blamed on the recession and the unwillingness of consumers to pay exorbitant prices in the current economy. Retailers have been discounting in the hope of selling fish. Clearly if this is true for Sockeye, it is equally so for farmed Atlantics. As we have repeatedly suggested, we don’t think that US consumers will remain loyal to farmed salmon if the retailers have to put up prices. Instead, they will look for cheaper alternatives and there are plenty available. For example, farmed tilapia is currently on price promotion in many US supermarkets.
However, the most interesting promotion we found this week was at Carr’s Supermarket, part of the Safeway Group, in Anchorage, Alaska. We expected that the widespread availability of locally caught salmon of various species would mean that Alaskans would have a good range of freshly caught salmon to choose from. Instead, the leading promotion at the Carr’s store in Northern Lights Boulevard in Anchorage is a family pack of farm raised Basa fillets at $4.99/lb. Don’t the Alaskan’s like their own salmon? And given their opposition to farming in Alaskan waters, isn’t it just a little hypocritical to give counter space to a farmed species and then encourage local consumers to buy it?
Dirty little secret: At the beginning of June, Frank Pope, the Oceans correspondent for ‘The Times’ newspaper wrote an article commending the supermarkets for being unlikely environmental heroes in leading the change in the fight against over-fishing http://www.timesonline.co.uk/tol/comment/columnists/guest_contributors/article6451945.ece
Mr Pope suggests that threatened by a future with no fish to sell, they are doing something about it. This is a reversal because it is usually consumer pressure that forces change but as Waitrose found in their recent consumer survey over three quarters of the public make no attempt to buy sustainable fish because they are largely unaware of the problems. This is why Mr Pope says that the film ‘The End of the Line’ is important as it makes consumers more aware of the issues of over-fishing.
Yet, as Mr Pope highlights, challenges remain. He says that more than half the fish sold in supermarkets is salmon, almost all of which is farmed. However, Mr Pope says that whilst farming has brought salmon to the wider marketplace, fish farming has a dirty little secret. He says that no matter how well cared for and clean the farms (which he also says too often they are not), they consume five kilos of wild fish to create one kilo of fish to sell. We have discussed this issue in a previous issue of reLAKSation so will not return to it here. What is of more interest is that whilst Mr Pope says the aquaculture has a dirty little secret, we, at Callander McDowell, can reveal that so has Mr Pope. Whilst Mr Pope writes for a well regarded leading newspaper, his research is at best very sloppy. We know that from his use of the now well used conversion ratio of wild fish to farmed fish but he also has tried to highlight the difference between the cost of farmed and wild fish, which he has done unsuccessfully because he confuses fresh salmon with smoked.
Mr Pope asks readers is they remember when smoked salmon was a rare treat saying salmon is now available to everyone. He cites Tesco’s prepacked salmon which he says sells for £1.14/100g (£11.42/kg) compared with £3.99 for the wild caught Alaskan alternative. The problem is the packs of Alaskan salmon selling for £3.99 are smoked salmon with a pack size of 100g (£39.90/kg). Mr Pope adds that anyone who loves to eat fish will know that there is a world of difference between eating farmed and wild caught salmon. In this case, he is right, they are totally different species. They not only taste differently, they look and eat differently. They are as different as cod and coley.
Mr Pope goes on to say that even Tesco’s responsibly farmed option £1.97/100g is fed using wild caught feeds. It is also smoked, not fresh, although the packs of salmon he cites as costing £1.14/100g are also labelled ‘responsibly farmed’.
The reality is that Tesco is not the best store to use as an example of the difference between wild Alaskan Pacific salmon and farmed Atlantic salmon but currently their fish counter has farmed salmon portions at £14.23/kg and Alaskan salmon portions at £13.33/kg discounted to £9.99/kg for two. Mr Pope can make what he wants from that.
The real point of Mr Pope’s article is that the aquaculture industry doesn’t appear very effective at correcting the misleading stories that appear in the press. The Scottish industry launched its Aquaculture Information Bureau http://www.aquaculture.org.uk in 2007 to provide authoritative information about the aquaculture industry. Yet, although the website still exists, it has not been updated for over a year.
We, at Callander McDowell believe that the industry should be monitoring the press for all misleading news stories and then contacting the journalists to remedy the errors. Of course, the press being what it is, there is unlikely to be any corrections published, so instead, the industry should post all such stories on a website together with the necessary corrections. If journalists know that their errors are being publicised, then perhaps they will make an effort to check first. If all the international industries contribute their local stories too, then the real facts may become better known.
The Scottish Executive recently published the finalised renewed Strategic Framework for Scottish Aquaculture, something we have yet to discuss. One of the recommendations is that image of the aquaculture industry needs to be improved with better public awareness, acceptance and understanding of the industry. No matter how hard the industry works to achieve this aim, it will make little difference if the press continues to publish such clear inaccuracies.