Legislature(2019 - 2020)GRUENBERG 120
01/28/2020 10:00 AM House FISHERIES
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| Audio | Topic |
|---|---|
| Start | |
| Presentation: the Value of Alaska's Seafood by the Alaska Seafood Marketing Institute | |
| Presentation: Division of Commercial Fisheries Return on Investment by Adf&g | |
| Adjourn |
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+ teleconferenced
= bill was previously heard/scheduled
ALASKA STATE LEGISLATURE
HOUSE SPECIAL COMMITTEE ON FISHERIES
January 28, 2020
10:02 a.m.
MEMBERS PRESENT
Representative Louise Stutes, Chair
Representative Bryce Edgmon
Representative Chuck Kopp
Representative Jonathan Kreiss-Tomkins
Representative Geran Tarr
Representative Sarah Vance
Representative Mark Neuman
MEMBERS ABSENT
All members present
OTHER LEGISLATORS PRESENT
Representative Daniel Ortiz
COMMITTEE CALENDAR
PRESENTATION: THE VALUE OF ALASKA'S SEAFOOD BY THE ALASKA
SEAFOOD MARKETING INSTITUTE
- HEARD
PRESENTATION: DIVISION OF COMMERCIAL FISHERIES RETURN ON
INVESTMENT BY ADF&G
- HEARD
PREVIOUS COMMITTEE ACTION
No previous action to record
WITNESS REGISTER
JEREMY WOODROW, Executive Director
Alaska Seafood Marketing Institute (ASMI)
Department of Commerce, Community, and Economic Development
Juneau, Alaska
POSITION STATEMENT: Offered a Presentation on The Value of
Alaska's Seafood.
SAM RABUNG, Director
Division of Commercial Fisheries
Alaska Department of Fish & Game (ADF&G)
Juneau, Alaska
POSITION STATEMENT: Offered a presentation on The Division of
Commercial Fisheries Return on Investment.
ACTION NARRATIVE
10:02:07 AM
CHAIR LOUISE STUTES called the House Special Committee on
Fisheries meeting to order at 10:02 a.m. Representatives
Stutes, Edgmon, Vance, and Neuman were present at the call to
order. Representatives Kopp, Kreiss-Tomkins, and Tarr arrived
as the meeting was in progress. Also in attendance was
Representative Ortiz.
^PRESENTATION: The Value of Alaska's Seafood by the Alaska
Seafood Marketing Institute
PRESENTATION: The Value of Alaska's Seafood by the Alaska
Seafood Marketing Institute
10:02:54 AM
CHAIR STUTES announced that the first order of business would be
a presentation on The Value of Alaska's Seafood by the Alaska
Seafood Marketing Institute.
10:03:26 AM
CHAIR STUTES stated she had invited Representative Ortiz, the
Chair of the House Fish & Game (DFG) finance subcommittee to the
meeting, as the presentations being heard were designed to set
the stage for the budget discussion in the following
subcommittee meeting. Chair Stutes explained that Alaska sees
an amazing financial return on every dollar it invests in
commercial fisheries. She expressed that, when making funding
and budget decisions, it is crucial to consider that commercial
fisheries more than pay for themselves and other industries.
She explained that some of the return on investment seen from
fisheries could be best explained by the Alaska Department of
Fish & Game (ADF&G) Division of Commercial Fisheries "division,"
while other indirect benefits could be better explained by the
Alaska Seafood Marketing Institute (ASMI).
10:04:26 AM
JEREMY WOODROW, Executive Director, Alaska Seafood Marketing
Institute (ASMI), Department of Commerce, Community, and
Economic Development, offered a PowerPoint presentation on The
Value of Alaska's Seafood. He explained that the presentation
would be covered in two parts: the first part would be the
economic impact of Alaska seafood; the second part would be what
impacts that value from a global perspective.
10:05:35 AM
MR. WOODROW explained that ASMI is the official marketing arm
for Alaska seafood. The ASMI is a public/private partnership
between the State of Alaska and the seafood industry. He
pointed out that the mission of ASMI is to maximize the economic
value of seafood resources. He explained that ASMI accomplishes
this mission in three different ways, by: protecting and
building the Alaska seafood brand worldwide, developing markets
for seafood products around the world, and working directly with
the seafood industry to ensure that their missions align.
10:06:12 AM
MR. WOODROW referenced The Economic Value of Alaska's Seafood
Industry report [handout included in the committee packet]. He
explained that Alaska seafood is the cornerstone of Alaska's
seafood economy. Referencing slide 4 of the PowerPoint
presentation, he pointed out that Alaska employs over 60,000
workers annually and contributes millions of dollars in federal,
state, and local taxes. He emphasized that the seafood industry
is not only large for Alaska, it is also a driving force in the
overall U.S. economy. He added that the Alaska seafood industry
employs workers from every U.S. state annually.
10:07:23 AM
REPRESENTATIVE NEUMAN added that sport fisheries in Alaska have
a huge economic impact as well; it's not only commercial fishing
that makes an impact. He gave saltwater salmon fishing in
Matanuska-Susitna (Mat-Su) as an example of this. He asked Mr.
Woodrow whether he knew what the economic impact of the sport
fisheries might be.
10:08:02 AM
MR. WOODROW answered that sport fisheries have a well-noted
impact and are considered by ASMI when it comes to fisheries
management. He explained that the economic impact of sport
fisheries was not included in this presentation and he would be
speaking only about commercial fisheries.
10:08:24 AM
CHAIR STUTES noted that the committee could address this issue
at a following meeting if Representative Neuman would like.
10:08:28 AM
REPRESENTATIVE NEUMAN replied that he would be glad to work with
Chair Stutes and her staff to arrange that.
10:08:33 AM
MR. WOODROW, referencing slide 5, explained that the ADF&G would
touch on this topic in its presentation as well, but he was
going to refer to it more from an investor's standpoint. He
pointed out that the volume of fish harvested in Alaska
fisheries stays consistent "year-over-year." He said that
Alaska fisheries are "fully exploited," which means they are
mature, maximized, and stable. He explained that what will be
fished in Alaska each year can be expected, because the
fisheries are managed to be sustainable. He added that the
ADF&G could explain this more than he could. Referencing slide
5, he pointed out that the ex-vessel volume in Alaska has stayed
mostly consistent, while the ex-vessel value has continued to
climb. He said that the climbing ex-vessel value is a good
thing and is one of the reasons for organizations such as ASMI.
He explained that "ex-vessel" is the term used to describe the
first sale between fishermen and whoever purchases the fish from
them and processes it for supply chains.
MR. WOODROW, referencing a chart on slide 5, showed that the ex-
vessel volume in Alaska was dominated by a couple of major
species, primarily Alaska pollock. Alaska has a lot of high-
value, low-volume species, such as halibut, sablefish, and crab,
which represent only 2 percent of the total volume, but comprise
over 25 percent of the total value. He highlighted that Alaska
has an array of species that fit in well with markets around the
world.
10:10:14 AM
REPRESENTATIVE TARR asked Mr. Woodrow whether his presentation
would address any fishery closure announcements and concerns
regarding overall population health.
10:10:32 AM
MR. WOODROW responded that he would be touching on those topics;
however, he is not a sustainability or management expert and
wouldn't be able to explain those topics in depth.
10:10:43 AM
CHAIR STUTES added that Sam Rabung from the Alaska Department of
Fish & Game, Division of Commercial Fisheries "division", would
be offering a presentation after Mr. Woodrow and he might be
able to touch more in depth on those topics.
10:10:53 AM
REPRESENTATIVE TARR clarified that she was referring to a recent
announcement about a federal closure for pollock fisheries and
wanted to understand how that relates to Alaska fisheries.
10:11:10 AM
MR. WOODROW replied that he thinks Representative Tarr might be
referring to a federal closure for cod fisheries and added that
he would touch on that in a later slide in his presentation.
10:11:26 AM
REPRESENTATIVE VANCE asked Mr. Woodrow to give an update on
Alaska seafood being marketed in the school lunch program.
MR. WOODROW responded that he would be touching on the school
lunch program in a later slide in the presentation. Referencing
slide 6, he stated that "first wholesale" is the term used to
describe the next step of the seafood sale process in which the
fish is processed and then sold to the next person in the supply
chain. He added that Alaska seafood touches many hands before
it reaches customers worldwide. Comparing slides 5 and 6, he
pointed out that there is a lot of opportunity in the excess
amount of fish between ex-vessel volume and first wholesale
volume. He explained that it is a difference of 3 billion
pounds of fish that could go to fish meal, pet food,
pharmaceuticals, and nutraceuticals. He expressed that these
are all ways to increase the value of a mature fishery.
10:13:12 AM
MR. WOODROW, referencing slide 7, showed that the total harvest
volume in Alaska fisheries has stayed consistently between 5 and
6 billion pounds over the past 20 years. The ex-vessel value is
continuing to climb due to steady values and continuing demands
for Alaska seafood in world markets. He pointed out that 2009
had a low salmon and pollock harvest which brought down volume
and prices. When those volumes recovered, the value recovered
as well.
10:13:58 AM
MR. WOODROW, referencing slide 8, talked about different seafood
products that Alaska exports. He explained that the largest
portion of exports are headed and gutted (H&G) or whole fish,
approximately 41 percent. Fillets are a growing portion of
exports, considered to be value-added products, that enter the
market as a final product. He said that surimi, which is a
paste protein created from pollock used in a lot of seafood
products, is a growing portion of exports. He explained that
surimi is popular in Japan and is used in many ways, giving the
example that children sprinkle surimi flakes shaped like Hello
Kitty and Mickey Mouse on their rice. He stated that 66 percent
of Alaska seafood value is exported and 33 percent stays in
Alaska domestically. What that means is that the U.S. is
overall the most important customer for Alaska seafood products;
most of the high-value, low-volume species exported from Alaska
enter the U.S. Most of the low-value, high-volume species, such
as pollock, pink salmon, and flatfish species are exported to
foreign markets.
10:15:41 AM
MR. WOODROW, referencing slide 9, gave a quick update on the key
species of Alaska fish. He said that pollock continues to climb
in value, represents a large portion of volume, and presents a
lot of opportunity to grow value. He said that the Pacific cod
supply is currently at a 20-year low; as Representative Tarr had
alluded to previously, there was a federal closure of the
fishery in the Gulf of Alaska. He added that if there was any
caveat to the closure, it is that 96 percent of cod harvested in
Alaska comes from outside of the Gulf of Alaska. He said that
Alaska does still have a significant supply of Pacific cod;
however, Alaska is a small contributor to the overall world
supply of cod and does not have a driving influence on the
overall market. He said that the sablefish harvest volume is
recovering, but the biomass consists primarily of small fish.
Small fish command a much lower value than large fish;
therefore, the biomass is not currently as valuable as it has
been in years past. He added that if these fish continue to
grow, then the fishery will rebound its value and become more
valuable in subsequent years.
MR. WOODROW stated that halibut harvests are down to 20 percent
of what they were in the early 2000s. He explained that, after
halibut prices peaked, consumers reacted, and the prices have
come down in recent years.
10:17:32 AM
REPRESENTATIVE KREISS-TOMKINS asked Mr. Woodrow whether he could
speak to ASMI's assessment on the market risks of
experimentations around farmed halibut and farmed sablefish in
relation to wild Alaska supplies.
10:17:54 AM
MR. WOODROW answered that farmed species are growing but are not
yet a large portion of the market. He said that he foresees the
challenge for Alaska seafood will come from the distance it has
to markets and the time it takes for its supply to reach
consumers. He explained that farmed species are primarily being
grown in Norway and other parts of Europe, and they have the
availability to deliver fresh product to market, which commands
a higher price. He said that consumers have a mindset that they
prefer fresh fish and it is easier to market for that. He
pointed out that competition can already be seen with the
Atlantic halibut supply. He stated that there has been a
rebound in Atlantic halibut stocks, which he feels is a great
sustainability story, but with that comes more competition for
Alaska halibut.
10:19:05 AM
REPRESENTATIVE KREISS-TOMKINS asked whether there is a belief
that farmed halibut and farmed sablefish could become as robust
an industry as the farmed salmon industry has become.
10:19:17 AM
MR. WOODROW replied that he has not seen a lot of good
information regarding that topic yet. He pointed out that
farmed salmon currently represents approximately 80 to 85
percent of the world salmon market, so he can see potential for
that to happen with the halibut and sablefish fisheries as well.
10:19:42 AM
REPRESENTATIVE ORTIZ asked Mr. Woodrow whether he could speak to
the reasons why halibut harvest levels are 20 percent of what
they were in the early 2000s.
10:19:57 AM
MR. WOODROW answered that he is not an expert on why those
fisheries are fluctuating, and that question would be better
suited for a fisheries manager.
10:20:12 AM
REPRESENTATIVE NEUMAN asked Mr. Woodrow whether he has noticed a
decline in targeted species compared to non-targeted species in
the biomass, a decline in the total biomass, or a decline in ex-
vessel volume over the last 20 years.
10:20:41 AM
MR. WOODROW replied that ex-vessel volume has been consistent
over the past 20 years with a slight increase. Some fisheries,
such as pollock, have continued to have high volume harvests.
He said that Alaska's fisheries are very well managed and are
considered the gold standard in sustainability. He explained
that there have been some swings from year-to-year, but overall
the volume has been consistent.
REPRESENTATIVE NEUMAN pointed out that he finds it interesting
the ex-vessel volume has stayed consistent over the past 20
years, yet the total biomass has declined. He expressed that he
thinks this is a result of important research and science that
is funded by the state.
10:21:49 AM
CHAIR STUTES asked Mr. Woodrow to explain briefly why
mariculture is not addressed in this presentation.
10:22:13 AM
MR. WOODROW explained that mariculture is not currently under
ASMI's purview, although he believes there is an interest in
changing the statute to have ASMI market it. He added that it
is not considered to be part of ASMI's commercial portfolio yet
and guessed that if added, mariculture would be a very small
percentage of overall volume. He clarified that the term
mariculture means to use kelp or bivalve to grow oysters, clams,
and geoducks.
CHAIR STUTES asked whether it is ASMI's wish to have mariculture
added under its purview.
MR. WOODROW answered that at the most recent board meeting in
November, ASMI's board passed a motion to support legislation
that would amend the ASMI statutes to include mariculture under
its purview.
10:23:33 AM
REPRESENTATIVE VANCE asked Mr. Woodrow whether 80 percent of
Alaska salmon is farmed.
MR. WOODROW confirmed that that is correct.
REPRESENTATIVE VANCE expressed that 80 percent is an astounding
percentage. She observed that she thinks Alaskans prefer wild
caught Alaska fish over farmed fish, even though farmed fish is
marketed as fresher. She explained that Alaskans aren't as
concerned with freshness saying, "It's just as good in our
freezer." She asked Mr. Woodrow to explain what the market feel
is towards this, given such an opposite perspective in markets
other than Alaska.
MR. WOODROW responded that Alaska salmon is a niche product in
the overall market now. He stated that wild salmon represents
only "about half of that." He explained that Alaska salmon
dominates the U.S. market in terms of wild salmon, representing
approximately 95 percent of the U.S. wild salmon catch. He said
there are consumers with whom the characteristics of wild salmon
resonate, and those are the consumers ASMI targets. These
consumers see the value in purchasing a product from a wild and
pristine place such as Alaska; they recognize that the frozen
product from Alaska is as good or better than the fresh product
they might get from a farmed fishery in Norway or elsewhere.
REPRESENTATIVE VANCE asked Mr. Woodrow whether Alaska is
remaining steady, or gaining ground, in the farmed versus wild
seafood markets.
MR. WOODROW answered that there are challenges for Alaska
seafood in those markets. He stated that ASMI is seeing an
increased investment from seafood competitors and outside
investments from other competing proteins. He explained that
current data shows Alaska seafood is holding strong; however, as
more investments are made by competitors there is a growing
concern of a risk to Alaska's seafood market share.
REPRESENTATIVE VANCE commented that she believes it might be
time to bring back the campaign, "Friends don't let friends eat
farmed fish." She expressed that she felt it was a very
effective campaign when she was growing up.
10:26:22 AM
CHAIR STUTES asked Mr. Woodrow whether ASMI exclusively promotes
wild products.
MR. WOODROW answered that the only products commercially fished
in Alaska are wild caught; therefore, wild, natural, and
sustainable is an inherent part of ASMI's marketing strategy.
10:26:46 AM
REPRESENTATIVE TARR asked Mr. Woodrow whether Alaska seafood and
Alaska salmon is still the most recognized brand(s) in the U.S.
MR. WOODROW answered that Alaska seafood is the most recognized
protein brand on U.S. menus. He gave the example of Angus beef
as another protein brand on U.S. menus.
REPRESENTATIVE TARR asked to clarify whether wild is part of the
Alaska seafood marketing campaign or if consumers understand the
implication that it's wild and not farmed.
MR. WOODROW replied that ASMI certainly hopes it is implied and
that consumers are responding to it.
10:27:35 AM
MR. WOODROW, referencing slide 10, spoke about the economic
value of Alaska seafood and the impact it has on jobs in Alaska
and the U.S. He said the Alaska seafood industry employs
approximately 60,000 Alaska residents and over 100,000 workers
nationally. Alaska fisheries employ workers from every U.S.
state, many of them involved directly with work on fishing
vessels; however, there are several shoreside workers as well.
He offered that the economic impact of Alaska seafood nationwide
is approximately $14 billion, which is a significant number
considering the size of Alaska and its fisheries.
10:28:22 AM
MR. WOODROW, referencing slide 11, explained that approximately
half of the workers employed in the Alaska seafood industry work
as commercial fishermen on fishing vessels. He expressed that
he thinks Alaska fisheries are inherently designed to be
inefficient, which he sees as a positive thing as it distributes
the wealth of the industry among more people. He stated that
many other fisheries in the world have several large fishing
vessels with few workers, catching a lot of fish; however, only
a few people benefit from that resource. He reiterated that
Alaska fisheries allow many people to benefit from fishing as a
public resource. He explained that the other half of the Alaska
seafood industry's workforce is employed in processing jobs or
the "management/hatcheries/other(s)" category. He said that his
job would be placed in the management category, much like an
ADF&G employee or a federal fisheries employee. The other(s)
category includes jobs like retail and welding.
MR. WOODROW pointed out how the Alaska seafood industry compares
to other employment sectors in Alaska. He said that seafood
currently ranks just behind the visitor industry in employment.
He added that the visitor industry has continuously grown in
recent years; it was slightly behind the seafood industry in the
last employment sectors study. The overall economic impact of
the seafood industry at $2.1 billion remains higher than the
visitor industry at $1.5 billion.
10:29:58 AM
CHAIR STUTES asked Mr. Woodrow if he knows how much state
funding ASMI receives.
MR. WOODROW responded that ASMI receives no funding from the
state. He expounded that the decision was made by a previous
administration to bring ASMI's state funding portion to zero
over the course of several years. As a result, ASMI is fully
funded by the seafood industry and federal grants.
CHAIR STUTES asked whether Mr. Woodrow knows how much state
funding the visitor industry receives.
MR. WOODROW replied that he does not currently have that
information regarding the visitor industry.
10:30:42 AM
MR. WOODROW, referencing slide 12, spoke about the seafood
industry's jobs distribution throughout Alaska. He explained
that jobs are evenly disbursed across the regions in the
southern part of Alaska where fish are harvested. There are a
fairly significant number of workers in the Yukon-Kuskokwim
region, relative to how small the fisheries in that region are.
He pointed out that a healthy percentage of the workforce live
in coastal Alaska; however, many people who live in Interior
locations of Alaska, such as Fairbanks and Matanuska-Susitna
(Mat-Su) Valley, participate in these fisheries. He also
pointed out that Naknek has the second highest ex-vessel value
in Alaska, which had increased from third highest in the
previous study. He added, "That's not knocking Kodiak at all."
10:31:40 AM
CHAIR STUTES interjected that that is because, "Kodiak boys
choose to deliver in Naknek and Dutch Harbor, I'm sure."
MR. WOODROW explained that this increase in value speaks to the
volume of fish being caught in Bristol Bay recently; the past
few years have seen some of the highest volumes ever recorded.
The seafood industry in Bristol Bay has invested a lot of effort
into increasing the value of its product, specifically sockeye
salmon, through better refrigeration on fishing vessels and on
shore.
10:32:13 AM
REPRESENTATIVE EDGMON pointed out, referencing slide 12, that
there are no numbers from 2018 and asked Mr. Woodrow what the
reason is for a two-year lag.
MR. WOODROW answered that the numbers shown fluctuate between
2017 and 2018 combined. He said the numbers do lag on some
data, so ASMI tries to focus on the most recent complete data
sets. He referenced how he had talked about the ex-vessel value
of salmon in 2019 earlier in his presentation, even though the
2019 numbers for salmon have not been completed yet. This lag
in data is because a lot of processors pay bonuses in the
springtime for the previous year.
REPRESENTATIVE EDGMON asked to clarify whether a good portion of
that data comes from the Department of Revenue (DOR).
MR. WOODROW answered that the data is received from several
sources including: ADF&G, DOR, federal fisheries, and National
Oceanic and Atmospheric Administration (NOAA) fisheries.
Answering a follow-up question, he stated that there is not a
clearing house or a single source that compiles this data.
10:33:47 AM
MR. WOODROW, referencing slide 13, stated that one of the values
the seafood industry brings to Alaska is a lower cost of living.
He explained that approximately one billion pounds of seafood
are exported from Alaska per year in containers. The shipping
containers are sent to Alaska full of dry goods, furniture,
groceries, cars, and other various goods, and then leave the
state full of fish. He said that this is a benefit to the
Alaska seafood industry as well as Alaska residents. He added
that the economic impact of this extends beyond just coastal
communities; anywhere that has goods delivered in Alaska
benefits as well.
10:34:51 AM
MR. WOODROW, referencing slide 14, explained that the seafood
industry in Alaska contributes approximately $172 million to
taxes annually through state, municipal, federal, and salmon
hatchery management pockets. He stated that if the value of
every fishery in Alaska increased by just one cent, then the
$172 million dollars in taxes would increase by approximately
$1.8 million. If every specie's ex-vessel value increased by 10
cents it would equate to an $11 million increase to state,
municipal and federal taxes. He used this example to illustrate
how even a small change in a fisheries value can have a
significant economic impact to Alaska.
MR. WOODROW stated that the seafood industry in Alaska invests
approximately $100 million annually in capital improvements for
processors and shoreside plants. The fleet continues to
modernize; several of the vessels replaced in the past few years
have been in service since the early 1970s and 1980s. He
explained that the industry invests in replacing older vessels
with newer ones that are more efficient, to stay competitive in
the world market.
10:36:09 AM
MR. WOODROW, referencing slide 15, spoke about factors that
impact Alaska seafood's value. He said that supply plays a
major role in what Alaska can sell its fish for. He explained
supply and demand; more fish means a lower value. He stated
that inventory hold over can play a big role in value; if a
processor has a difficult time moving its inventory in a
particular season for reasons such as a large harvest or foreign
trade policies, then the value on the next season's fish is
likely to be lower. He stated that demand can increase the
value of Alaska seafood. Consumer preferences toward wild
fisheries and new markets and products can increase value as
well. He explained that the value of Alaska seafood is dictated
by prices in the global market; when the U.S. dollar is high,
foreign buyers have less purchasing power, which drives down the
value of Alaska species.
10:38:10 AM
MR. WOODROW, referencing slide 16, pointed out there is a 1:1
ratio of competition between every Alaska species caught, and a
comparative species caught in other world markets. He gave an
example of a recent dining experience he had at a white table
restaurant in the Lower 48, where black cod and seabass were
both on the same menu; these two fish species are considered
comparable species. He explained that consumers are faced with
a choice between comparable species like this a lot of the time,
which is part of the competition in the seafood industry. He
stated that Alaska salmon continues to face an uphill battle in
world markets and Pacific cod is not a driver in the world
market.
10:39:09 AM
MR. WOODROW, referencing slide 17, showed that Alaska makes up
two percent of the global production volume of seafood in the
world. If Alaska were its own country it would rank number
eight in the world for wild seafood production. This means that
98 percent of the world market is direct competition for Alaska
seafood. He explained that there is not enough protein to meet
the demand in the world, which means that the value of all the
fish in the world market will continue to increase.
10:39:59 AM
MR. WOODROW, referencing slide 18, explained that Alaska seafood
is exported primarily to China, where it is then processed and
re-exported to European and other Asian markets. A small
percentage of the processed fish from China comes back into the
United States; however, most of the product entering the U.S.
market is higher-value, lower-volume species directly from
Alaska. He said that 90 percent of Alaska pollock enters the
Chinese market.
10:41:05 AM
MR. WOODROW, referencing slide 19, spoke about some of the trade
barriers in key world markets. He stated that tariffs on Alaska
seafood into China are high at 37 to 42 percent, meaning that
fish previously sold for $1 a pound is being sold for $1.42 a
pound. This has essentially turned the Chinese domestic market
off from many of Alaska's seafood products. He expressed that
this has created an inventory hold-over that is burdening
Alaska. He stated that the European Union (EU) has near free-
market access to bringing seafood products into the U.S. Alaska
does not have this same advantage in entering EU markets. He
noted that ASMI is waiting to see what happens with Brexit.
Initial reports indicate that Brexit might be beneficial to the
seafood industry, but it is too soon to know at this point. He
explained that Brexit is important because the United Kingdom
(UK) is a large buyer of Alaska salmon and pollock.
MR. WOODROW stated that Japan is the largest domestic customer
for Alaska seafood outside of the U.S. He referenced that there
have been recent "Phase One" free trade agreements between Japan
and the United States; however, seafood has not been included in
these agreements. He added that the U.S. Trade Representative
(USTR) told ASMI that seafood will be a part of "Phase Two"
negotiations, but there is no known timeline for these
negotiations. He stated that there has been a trade embargo
between Russia and the U.S. since 2014, which closes Russian
markets to Alaska seafood while still allowing Russian seafood
products into the U.S. He added that Alaska competes with
Russia on many fish species, including: pollock, salmon,
flatfish, and crab. Russia has many favorable agreements in
markets in which Alaska seafood is sold, which is a detriment to
the Alaska seafood industry.
10:43:28 AM
MR. WOODROW, referencing slide 20, spoke about threats and
opportunities in the Alaska seafood industry. He stated that
consumer confusion, on issues such as farmed versus wild and the
health of the oceans, turns consumers off seafood. He said that
increased investments in fisheries in Russia and Norway creates
increased competition in world markets, adding that Russia is
investing millions of dollars to build a new fleet and improve
processing. He stated that alternative proteins, such as the
Burger King Impossible burger, the Beyond Meat burger, Toona,
and other plant-based products, represent a small portion of the
protein market currently; however, there is a lot of investment
in these products and the competition they present to Alaska
seafood might increase over time. Consumers are paying
attention to these plant-based products and ASMI is watching to
gauge consumer reactions to better understand how to position
Alaska seafood in those markets.
MR. WOODROW summarized his presentation, saying he would like to
end on a positive note. He reiterated that Alaska seafood is
the number one protein brand on U.S. menus, the Alaska brand
resonates with consumers worldwide, and Alaska fisheries are the
gold standard in sustainable management. He expressed that
consumers increasingly make purchasing decisions that align with
their ethos, especially Millennial and Generation Z consumers.
He stated that if the Alaska seafood industry continues to have
healthy protein that is clean, sustainable, and healthful for
the environment and consumers, then the value of Alaska seafood
will remain high.
10:46:39 AM
CHAIR STUTES admonished herself regarding a comment she had made
earlier saying, "I said our Kodiak boys and I should've said our
Kodiak fishermen and fisherwomen."
10:46:58 AM
REPRESENTATIVE TARR asked Mr. Woodrow what ASMI's perspective is
regarding sustainable fisheries management and ocean health
given recent concerns about ocean acidification, warming waters,
and other various concerns.
10:47:42 AM
MR. WOODROW answered that ASMI is focused on marketing Alaska
seafood. He said that ASMI works closely with the ADF&G and
federal managers to get the facts on what is going on in an
alarming situation. This allows ASMI to educate reporters
working for news outlets such as The New York Times or Bon
Appetit Magazine, to ensure they are using the truth and not
just sensational headlines when talking about Alaska seafood.
10:48:13 AM
REPRESENTATIVE ORTIZ asked for Mr. Woodward to clarify whether
he had said ASMI hasn't received state funding in three years.
10:48:23 AM
MR. WOODROW clarified that fiscal year 2020 (FY 20) is the
second full year ASMI has not received state funding. He
answered a follow-up question, saying that ASMI has not seen a
decline in its ability to achieve its mission. He added that
ASMI has had to make changes to the way it does business; it no
longer advertises domestically and is more strategic in how it
uses its budget.
^PRESENTATION: Division of Commercial Fisheries Return on
Investment by ADF&G
PRESENTATION: Division of Commercial Fisheries Return on
Investment by ADF&G
10:49:32 AM
CHAIR STUTES announced that the final order of business would be
a presentation on The Division of Commercial Fisheries Return on
Investment by The Alaska Department of Fish & Game.
10:50:17 AM
SAM RABUNG, Director, Division of Commercial Fisheries, Alaska
Department of Fish & Game (ADF&G), offered a PowerPoint
presentation on the Division of Commercial Fisheries "division"
return on investment by the ADF&G. He stated that this
presentation is specific to the division, although ADF&G
recognizes there is tremendous value generated from other
fisheries as well. He stated that the division is tasked with
assessing fishing stocks and populations and determining if
there is a surplus that can be harvested in a sustainable way.
He stated that one of the division's guiding principles is what
it calls "maximum sustained yield". He explained that while the
division's job is to provide opportunity to harvest the surplus,
the Board of Fisheries is tasked with allocating the surplus.
10:51:51 AM
MR. RABUNG, referencing slide 2 of the PowerPoint presentation,
stated that a large portion of his presentation was an overview
of the topics Mr. Woodrow had just discussed in his
presentation. He explained that the commercial fishing industry
is the largest private-sector employer in Alaska; it directly
employs approximately 60,000 workers annually. Commercial
fisheries in Alaska contribute approximately $172 million
directly in taxes, fees, and self-assessments, and an annual
average of approximately $5.6 billion in economic output to the
Alaska economy. He explained that the division operates on a
budget of approximately $68 million, of which approximately $36
million is from general funds.
10:52:41 AM
MR. RABUNG, referencing slide 3, provided a breakdown of where
the major fund revenues for the division come from. He pointed
out that the division receives approximately $43 million of the
total revenue of approximately $74 million.
10:53:02 AM
MR. RABUNG, referencing slide 4, pointed out that the division's
governor's budget proposal for FY 21 is approximately $36.6
million of a total of approximately $67 million.
10:53:19 AM
MR. RABUNG, referencing slide 5, pointed out the destinations of
the $172 million in taxes and fees from commercial fisheries in
Alaska. He stated that the fees are administered through the
DOR. He added that there are industry groups that fund a lot of
assessment projects directly, which are not included on slide 5;
if they were included the number of tax dollars would be higher.
10:53:54 AM
MR. RABUNG, referencing slide 6, explained that ex-vessel volume
and ex-vessel value show the return on tax investments.
10:54:10 AM
MR. RABUNG, referencing slide 7, explained that the first
wholesale value is what the processors receive when they sell
the product, which is value added.
10:54:21 AM
MR. RABUNG, referencing slide 8, stated that the division
manages the subsistence fisheries and most of the personal-use
fisheries in Alaska. He said that data collected by the
division is shared across all divisions at the ADF&G and share
the costs of projects and facilities with the other divisions as
well.
10:55:05 AM
CHAIR STUTES asked Mr. Rabung whether budget cuts to the ADF&G
directly affect revenue coming into Alaska by reducing the
ability of the division to fully prosecute fisheries involved.
MR. RABUNG answered that Chair Stutes was correct: If the
division can't manage a fishery sustainably, then that fishery
can't be opened. He expressed that the division sets the bar
high for sustainability requirements.
CHAIR STUTES stated that it sounds to her like the division must
manage funds more conservatively when less funding is available.
MR. RABUNG agreed that that is correct. He added that if
funding is eliminated on an assessment project it must close the
fishery.
10:56:54 AM
REPRESENTATIVE EDGMON noted that the division's travel budget
was cut substantially in the most recent budget. He asked Mr.
Rabung whether he has a sense on what limitations that might
impose on the division, given how many offices it has in remote
locations.
MR. RABUNG replied that the division has reduced its travel to a
point that it is only for "mission critical" situations. The
primary travel that had to be eliminated was for industry
outreach and stakeholder outreach, which can be very valuable to
the industry. He said that the commercial fishing industry sees
industry and stakeholder outreach as important enough to fund
travel for it itself.
10:57:59 AM
REPRESENTATIVE KOPP stated that during his time as a sockeye
fisherman in Bristol Bay, he had observed real time management
and staffing at various locations, which allowed for a greater
volume of catch and more money for the fishermen and the state.
He explained that situations have happened in the last 10 years
where the salmon runs have come super early and the counting
stations weren't staffed, or the salmon runs came late and in
large numbers and the counting staff had already left. He said
he observed the management approach default to a conservative
one, resulting in over escapement in one situation and fishermen
who were unprepared in another. He expressed that he encourages
an accurate estimate on the part of the division for what its
travel budget needs are for field workers. He said the fishing
season is usually set to guessing a four- or five-week window of
when the salmon runs will happen, but in order to hit that
window accurately eight weeks are necessary. He stated that he
understands this would cost more, but the science and management
make more sense from a fisherman's perspective.
11:00:10 AM
REPRESENTATIVE NEUMAN asked Mr. Rabung whether the total biomass
has increased, decreased, or stayed the same in terms of
targeted species and non-targeted species over the last 20
years.
11:00:29 AM
MR. RABUNG answered that stocks of fish are cyclical in nature;
highs and lows fluctuate from year-to-year. He expressed that
he assumed Representative Neuman was referring to halibut
fisheries which have been in the news recently. The targeted
halibut fisheries have been decreasing, yet the non-targeted
halibut fisheries have not. He explained that the International
Pacific Halibut Commission (IPHC) manages these fisheries and
the division does not have much say in the process of
prosecutions in federal waters.
MR. RABUNG explained that over the course of the past several
decades there have been many fluctuations in fishery stocks. He
said that in the Kodiak area back in the 1980s king crab "was
king," but a regime shift in the environment allowed pollock and
groundfish to dominate the area. He said that the division is
very aware of non-targeted species and is actively involved in
talking with management authorities about it. He expressed that
he couldn't speak too much more on the topic as it is slightly
out of his purview and there is an "international nexus to
that."
11:02:35 AM
REPRESENTATIVE NEUMAN stated that biologists he has spoken with
from British Columbia have expressed that the total biomass has
decreased to 20 percent of what it used to be. He explained
that the decrease in non-targeted species is creating a
situation where targeted species, such as out-going salmon, are
being picked off by predators at higher rates. He expressed
that considering the low volume of the total biomass, combined
with concerns regarding the environment, such as ocean
acidification and warming, it might be worth considering talking
about whether biologists should manage more conservatively or
not. He said that he thinks it's important to have a
conversation about science and funding in order to manage
resources for a sustainable future.
11:04:04 AM
CHAIR STUTES expressed that the return on investment Alaska
receives from fisheries is impressive. She explained that very
few state investments compare in return on investment to that of
commercial fisheries. She stated that her goal in this hearing
was to clearly show that commercial fisheries pay their own way
in Alaska. She expressed that investments in fisheries lead
directly to opportunity, great returns to the general fund, and
produce many benefits for Alaska's economy. She concluded that
targeted increases to the ADF&G's budget should be considered,
and hopes this hearing made the value of doing so clear.
11:05:37 AM
ADJOURNMENT
There being no further business before the committee, the House
Special Committee on Fisheries meeting was [adjourned] at 11:06
a.m.
| Document Name | Date/Time | Subjects |
|---|---|---|
| Presentation by ADF&G Division of Commercial Fisheries' Retern on Investment 1.28.20.pdf |
HFSH 1/28/2020 10:00:00 AM |
ADF&G |
| Presentaiton by ASMI-The Value of Alaska's Seafood 1.27.20.PDF |
HFSH 1/28/2020 10:00:00 AM |
ASMI |