Sea Temperatures and Disease Lead to Fluctuating Salmon Prices
Spend Matters welcomes another guest post from Mark Kozlowski of Mintec.
In the US, salmon is the third most popular seafood (behind shrimp and canned tuna), with almost 300,000 tons of salmon consumed in the US per year. Almost two-thirds of all of salmon consumed in the US is imported farmed Atlantic salmon, usually from Chile, Canada, and Norway. In the past few years, disease and sea temperatures in these regions have significantly affected farmed salmon prices globally.
Chile is the largest exporter of salmon to the US, as well as the second largest salmon producer in the world. In 2007, the salmon farming industry in Chile was decimated by an outbreak of the virus Infectious Salmon Anaemia (ISA), which led to severe losses from infected farms. The worst effects were seen in 2010, when Chilean salmon production only reached 246,000 tons – its lowest level in almost a decade. Since then production has been recovering, with production in 2013 expected to be at 540,000 tons, back to the levels seen before the outbreak.
Production in both Norway and Canada increased between 2010 and 2012, while the Chilean industry continued to recover. Total global farmed salmon production increased by 27% in two years. This caused prices to fall from mid-2011 until the end of 2012.
However, prices rose again at the beginning of 2013, because the sea temperature around Norway in the winter of 2012/13 returned to a cooler level after warmer-than-normal temperatures were recorded the previous winter. This led to a slower growth rate of salmon and reduced Norwegian output for the first half of 2013, while another small scale outbreak of ISA led to reduced production from Chile.
Farmed salmon prices in the US are currently falling from the high levels seen earlier in the year. This is partly due to an improved output in second half of 2013 from both Chile and Norway. The higher prices seen earlier in the year have led to a fall in demand which is also helping to push the prices lower.
With disease and sea temperatures being just two of the many influencing factors on the global salmon market, prices are unlikely to remain stable for too long.
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