Navigating Alaska’s stormy seas

Fishermen showing off his catch of salmon aboard the F/V Liberty. — ©2024 The New York Times Company

PETERSBURG, Alaska, is as picturesque a seaside town as any along the state’s maritime coast.

Its Scandinavian heritage is evident in its statuary and floral designs, while bald eagles soar above the strait separating it from a national forest.

Although it lacks space for the large cruise ships that flood Ketchikan and Juneau with tourists, it is perfectly situated for its sustaining industry: fishing.

Norwegian fishermen settled in Petersburg in the 1800s, drawn to its ideal location for pursuing salmon, crab and halibut.

Today, hundreds of vessels dock there, selling their catch to the town’s two major processors. These processors head and gut the fish before canning or freezing them for the journey to dinner tables across the world.

One of these plants, built over a century ago, is the town’s largest private employer.

Few know the industry better than Glorianne Wollen, a fisherman’s daughter who operates a large crab boat and serves as harbourmaster. From her small office, she has witnessed significant change over the years.

“In the good old days, the town was alive with discussion,” Wollen recalls. “Everybody had a stake, everybody knew what was going on, and things happened in real-time.”

That energy faded as boats grew larger and more efficient, requiring fewer crew members and leading to a more detached industry.

“It takes two guys to do what 20 used to,” she says. “There’s just fewer of us.”

Last year, however, the industry faced a crisis that even seasoned veterans struggled to recall.

Despite healthy fish stocks, no one wanted to buy them. Processors, having already halved the price paid to fishermen for salmon, began turning them away.

The reasons for this crisis are complex.

The US$6bil Alaskan wild seafood market has been hit by geopolitics, macroeconomic shifts, changing ocean temperatures and post-Covid-19 disruptions, all compounding existing vulnerabilities.

Inflation-weary consumers turned to cheaper proteins like chicken, while the strong US dollar and a weakened yen made it hard to sell to Japan, where fish consumption is in decline.

Meanwhile, Russia flooded the US market with salmon and pollock, further depressing prices.

For an inherently cyclical industry, the convergence of these challenges – leading to a US$1.8bil decline in industry revenues and a US$269mil drop in state and local tax collections – was unprecedented.

“We’ve never seen everything bottom out at the same time,” says Jeremy Woodrow, CEO of the Alaska Seafood Marketing Institute.

Prices have rebounded slightly, but the pressure remains on everyone in the industry.

In Petersburg, the crisis has even shifted the historically fraught relationship between independent fishermen and the larger corporations that set prices.

“It really sends shockwaves through the harvesting sector when processors go under,” says Nels Evans, director of the Petersburg Vessel Owners Association.

“There’s been a lot of coming into the middle – realising we all need to survive for the industry to survive.”

The storm’s origins

Alaska’s fishing industry has faced upheaval before.

At the turn of the 20th century, fish traps placed by processors at river mouths were overharvesting fish, depleting stocks and hurting the local population’s food supply and livelihoods.

When Alaska’s constitution was written in 1959, fish traps were banned, and a small-boat fleet took over, ensuring the wealth was spread among local skippers.

That system worked well for a time, but by the 2000s, the rise of farmed fish – raised year-round without the wild’s unpredictability – challenged Alaska’s fisheries.

Farmed fish provided a more consistent product, while Alaska’s fishermen faced high fixed costs and the uncertainty of wild fish stocks.

Silver Bay Seafoods, a company founded by fishermen in 2007, sought to counteract this challenge by building modern processing plants capable of producing high-quality frozen fillets.

This helped raise prices and even provided health insurance for the company’s shareholders. However, it also added processing capacity to an already strained market.

The pandemic initially boosted the fishing industry, as consumers stuck at home purchased more seafood.

But by 2022, inflation prompted shoppers to become more frugal, just as an enormous sockeye salmon run hit Bristol Bay. The result was a severe glut, which, combined with the influx of Russian fish, left the market in disarray.

Navigating an uncertain future

In response to the ongoing challenges, some processors are experimenting with new models.

Circle Seafoods, a project in the native community of Metlakatla, aims to deliver better-quality salmon at lower costs. By rapidly deep-freezing the whole fish, they prevent deterioration, reducing the need for labour-intensive processing and smoothing out production cycles.

The hope is that this model could provide year-round employment in remote locations and help sustain struggling towns. If successful, it could revitalise Metlakatla’s economy by buying local fish and ensuring profits stay within the community.

However, the model is still unproven.

Circle Seafoods isn’t the only company trying this approach.

Northline Seafoods launched a similar project in Bristol Bay, although an electrical fire temporarily halted operations.

As more fishermen returned to traditional buyers, it became clear that innovation in this industry comes with its own risks.

The road ahead

Petersburg has faced challenges before. In 1965, local fishermen saved their plant from closure by banding together to purchase it, creating Icicle Seafoods, which grew into a major player on the West Coast.

But the forces shaping the future of Alaska’s seafood industry now seem far beyond local control.

The sale of Petersburg’s plants to private equity firms has led to closures, delayed payments, and fewer workers spending money in town. The knock-on effect has been felt across the local economy, from the boatyard to the century-old grocery store.

Although fishing is unlikely to disappear entirely, Jim Floyd, president of the Petersburg Chamber of Commerce, believes the town must diversify its economy to avoid over-reliance on the industry.

“We can’t be so dependent on one thing,” he says. “It’s going to be a tough year.”

The future of Alaska’s fishing industry may be uncertain, but communities like Petersburg are determined to find a way forward, just as they always have. — ©2024 The New York Times Company