Tag Archives: Marine Stewardship Council

Invest in fishing companies and fish farms? Bursting bubble to come…

I don’t know what else to say other than… I think I see a bubble ready to burst…

Today there was an “Exchange Traded Fund” (ETF) launched today by a company in New York — Global X. An ETF is sort of like a mutual fund, however it is traded on stock exchanges like a company.

The ETF launched today is the Global X Fishing Industry ETF (Ticker: FISN on the New York Stock Exchange NYSE).


This is the first ETF globally targeting the fishing industry. The fishing industry is comprised of two main components: commercial fishing and aquaculture. Commercial fishing represents those companies directly involved in the capture of fish from wild fisheries, while aquaculture represents those companies that supply fish through fish farming operations.

Want to know two of the top three holdings?

Cermaq and Marine Harvest — companies both with open pen salmon farms on the BC Coast.

_ _ _ _ _ _ _

Here’s the theory lying behind this investment scheme…

Wow, sounds like a great investment opportunity…?!?!

Expansion of the middle class around the world… the drop of trade barriers and more bilateral agreements (e.g. another set of phrases for “colonization”)…

Global fishery trade has increased combined with more distant water fleets?

Hmmm… I wonder why?

Maybe because fish stocks subject to commercial fisheries around the world are in deep shit and folks are having to go further and wider to find fish… or simply fishing further and further down the food chain?

Sure wouldn’t mind seeing the rate of subsidies on this either?

In the 1990s, the United Nations Food & Agriculture Organization (UN FAO) suggested:

…that the operating costs of fisheries around the world exceeded commercial revenues by over $50 billion each year. Without subsidies, the world’s fishing industry would be bankrupt.

The World Wildlife Fund suggests:

Even as fish stocks dwindle, some of the world’s richest nations are paying billions of dollars to keep flagging fishing industries afloat through fishing subsidies. The result: a growing series of economic, social, and environmental crises around the world.

Estimated at tens of billions of dollars per year, these subsidies are equivalent to roughly 20% to 25% of the value of the landed fish catch worldwide. This scale of subsidization is a huge incentive to expand fishing fleets and overfish.

Hmmmm…. sounds like a great investment to me. It’s sort of like the auto industry or the oil industry — some of the most subsidized businesses on the planet.

It’s a negative sum game… the bubble will burst. And it won’t be individual’s investments and retirement plans that implode —- it will be entire nations, and citizens will go down with it…

(Anyone see the current debt of the United States?)

_ _ _ _ _ _ _

Here’s the comforting graph that accompanies this little marketing brief on the Global X website…



It seems that this investment scheme has been launched because it appears that this trend can continue forever…

Well… Global X and investors… I have news for you… world catch of fish plateaued at the end of the 1990s and may actually be on a downward trend now. We’d have a better idea if some countries didn’t lie about their catch data — e.g. falsely inflated…

Global X response: ‘but there’s aquaculture…’


bubble II?

Well… at this point in time much of that graph – the blues and green portions – require other fish to feed the farmed fish…

I think that’s also known as a “negative sum” gain…

Maybe the wisest thing I see on the marketing material for this ETF:



The risk include “…the possibility of depleted fish stocks as a result of overfishing…”?!

Hmmmm… yeah. You mean like 75% of the world’s fish stocks?


marketing bumpf?

Yes, however, there is absolutely no way that this is sustainable though.

Especially with the continued practice of bottom trawling and by-catch thrown overboard.

Absolutely no way.

This is as twisted a scheme as Bre-X gold, or Enron… or the Marine Stewardship Council certifying Fraser sockeye fisheries as sustainable the year that the stocks experience an unprecedented collapse.

if you’re a wise investor ‘short’ this stock… just like you should ‘short’ any commercially exploited fish stocks. Or the US dollar, or US real estate…

(‘shorting’ means you make money when the stocks collapse… fish or financial)

Schemes like this will simply increase the pressure on corporation and some countries to further expand and grow fishing fleets and processing facilities on fish stocks that absolutely CAN NOT support more FISHING pressure. (or increase the scale of fish farming — like open-pen salmon farming — in sensitive coastal areas worldwide).

As I’ve suggested multiple times on this site, and will continue to — show me where companies like Cermaq and Marine Harvest are providing farmed salmon to needy and hungry people and countries. There sure as hell aren’t many folks in the “growing middle class” buying salmon at $15/lb to feed their families…

What a bizarrely short-sighted world we live in…

Alaskan salmon fisheries: is this sustainable – or a great intervention?

During a quick look around Twitter and the ‘tweets’ of some fishy folk, I came across various news articles from other geographic areas with wild salmon fisheries. It got me pondering the great Alaskan salmon fisheries experiment

Here is salmon catch in Alaska for the last century… or so… (the PNP program is the “public — non-profit program” for running salmon hatcheries – ocean ranching operations).


Are these levels sustainable into the future?

Is there any way possible that this is sustainable into the future?

_ _ _ _ _ _ _

Here are two other telling graphs:


Anchovies... South America

Canada's North Atlantic cod catch


Is there a trend here?










That trend has a common shape… and curiously the Alaskan commercial salmon catch has a price trend that may be foreshadowing the catch trend…



(Remember, there was no shortage of salmon being caught prior to 1878 — especially in Alaska where Russian and other ‘explorers’ and ‘settlers’ were pillaging the coast for sea otter furs for quite some time prior to 1878 — And First Nations and Inuit had been harvesting wild salmon for eons prior to ‘contact’ — including in a commercial context for trade…

_ _ _ _ _ _ _

Now, let’s add another even more worrisome trend into this Alaskan commercial salmon catch graph:


Hatchery to wild salmon commercial catch in Alaska

This graph comes compliments of “The Great Salmon Run: competition between farmed and wild salmon” (Knapp, Roheim and Anderson, 2007). It’s suggesting that the average hatchery-salmon catch is starting to approach 25% of the commercial catch in Alaska — or ocean ranching as they call it.

As the black boxes in the graph demonstrate, and as history most likely teaches us, the great intervention will need to continue to maintain catch levels that high. As we move into the second and third decades of the 2000s the hatchery-ocean ranching intervention will need to continue and the percentage of catch supplied by human intervention will continue.

The potential problem here is that this is a nasty little cycle that no one really wants to talk about…

_ _ _ _ _ _

Hatcheries/Ocean ranching operations in Alaska are run by the PNPs — the “public — non-profit partnerships” . These were formed in the 1970s and 80s when the State of Alaska took over management of wild salmon from the Feds (as shown in the graphs).

These PNPs are largely operated by commercial fishing associations and the like. This means that the hatcheries-ocean ranching operations were set up under the same auspices of Canada’s Salmon Enhancement Program (SEP) — to increase salmon production and therefore increase commercial salmon catches.

These grand industrial/ecological balance upsetting experiments began in earnest in the 1970s. A time of a different mainstream cultural mindset, and a different understanding of ecological processes (well… sort of…).

In Alaska, the key to keeping these PNP Aquaculture Associations (hatchery-ocean ranching operations) afloat is that salmon caught commercially have:

FIRST — a cost recovery component and then

SECOND — a profit motive for the commercial fishing folks.

However, as one can see in the graphs above — stupendous salmon catch levels are being maintained at over 200 million fish across Alaska; YET the price levels are falling faster than the 2008 Dow Jones stock market index. (And cracks are starting to show in whether these catch levels can be maintained — see Yukon River fishery disaster at end of post)

And just like the stock market, sure there’s been a little blip back up in price — but nothing that resembles past price levels.

What does this mean for the Alaskan Hatchery-Ocean Ranching Operations?

Here’s a sample from one of the annual reports: The Cook Inlet Aquaculture Association 2008 Annual Report.

Cook Inlet Aquaculture Association (CIAA) was created to make more salmon for all users in Cook Inlet. Our forefathers hoped to provide a home for salmon biology; to gather ideas and knowledge, and a means of broadcasting this science to fishing communities and to the general public. These founding visionaries clearly planned to have a hatchery. (my emphasis)

Quite a fascinating opening to an annual report… I’m not one to quite buy-in to the philosophy of salmon hatcheries as manifest destiny… however, each to their own…

The annual report goes on to explain:

Meanwhile, the CIAA hatchery program also continues to financially struggle. A new sockeye project at Tutka Bay was very successful in 2008. Recent high prices for early hatchery-produced sockeye at Resurrection Bay have also shown promise. I’m currently holding my breath and hoping adjustments to the cost recovery program are successful, concurrent with improvements in ocean survival for the Resurrection Bay stocking.

About 15 hatcheries across Alaska have closed and facilities at Crooked Creek, Eklutna, Port Graham, and Tutka Bay are among them. These sites continue to be used for various projects, but at a fraction of their capabilities. I believe CIAA needs to find funding to maintain operation of Trail Lakes Hatchery. Achieving escapement goals for all systems in Cook Inlet and financing a hatchery are challenging endeavors, but they are essential for the many users of today’s salmon.

We need to find a way through the financial problems we are facing and then begin to build a healthy revenue reserve. The men and women who founded CIAA were wise to do so. I am proud to join them in their effort to realize more salmon for all users.

And so now hatchery/ocean ranching operations are having to close due to financial hardship. Furthermore, some of the practices such as lake fertilization, and mass hatchery operations are starting to show some serious issues on the ecological front. Some of these are even highlighted in the good old Marine Stewardship Council audits of the Alaskan salmon fishery (however, that’s a separate post…)

In short, the mass practice of hatchery releases has huge impacts on wild, self-sustaining populations — in terms of loss of genetic diversity and in terms of giving a false sense of security in opening certain fisheries.

_ _ _ _ _ _

And so now the vicious cycle begins — something akin to this:


Alaskan PNPs... the vicious cycle

And so what is a State government to do?

It has set this mess up through its devolution from Fed responsibility.

If more hatcheries go belly up (like a salmon in an oil spill) this means less salmon going to sea and the less salmon we will see (returning).

This means lower catch, which means less $$ for commercial fishing industry… and less $$ in cost-recovery initiatives of these public — non-profit aquaculture operations.

Less fish going out, less fish coming in, less money coming in.

Interim solution?

Catch more fish to bring in more $$ to curb the debt load.

Catching more fish means less fishing spawning and producing naturally. Less fish producing naturally, and less fish being propagated by humans — means less fish to catch down the road.

What does this all set up?

Government bail-out.

Bail out of the fishing industry — like US government had to do on the Yukon River last year.

Anchorage Daily News reporting in January 2010:

U.S. Commerce Secretary Gary Locke declared a commercial fishing disaster for Yukon River king salmon Friday following two years of poor runs, fishing restrictions and bans.

“Communities in Alaska along the Yukon River depend heavily on chinook salmon for commercial fishing, jobs and food,” Locke said in a statement from the Commerce Department. “Alaska fishermen and their families are struggling with a substantial loss in income and revenues.”

_ _ _ _ _ _ _

When we intervene with most anything — e.g. oil-rich dictator run countries — history suggests that these interventions can — in the long-run — become very, very expensive and sometimes counterproductive.

When it comes to wild salmon — the interventions are endless (hatcheries, fertilization schemes, fake habitat construction, and so on…).

The problem is that once the interventions start ‘working’ everyone seems to forget they were interventions in the first place. And so we return to how things used to be — before the interventions…

The result?

A worse frigging situation than prior to the intervention.

Look at the US bank and auto industry bailout packages — do you really think the ridiculous executive compensation packages have stopped?

Or, that auto executives curbed their flying around in private jets?

Are individual citizens taking the example of debt out-of-control and curbing their own household debt?


Maybe we need to look at the root of the word and put it in the right context…

intervene comes from Latin intervenire “to come between, interrupt.”

Various definitions suggest: “Come between so as to prevent or alter a result or course of events”

Or most fitting for this situation: “Occur as a delay or obstacle to something being done.”

And what were we, or are we, “delaying”?

The inevitable.

If we continue to hammer away at salmon runs and at salmon habitats and ignore the potential perils of climate change and its affect on salmon and their habitat… we will reach a time when no intervention will offset the inevitable collapse…

What are we potentially delaying in relation to “something being done”.

That’s called lack of political will… (and public pressure)

And nobody wants to make the real tough decision… e.g. intervene on the interventions… because that will cost…

And the public has a tough time exerting pressure because the world of salmon and “salmon management” has become the world of technocrats, techno-bumpf, endless hundreds of pages government documents, inaccessible meetings flooded with inaccessible PowerPoint presentations, inaccessible government bureaucrats (e.g. “sorry that’s not my department), inaccessible language, and legislation that simply is not enforced, legal teams with little interest in enforcing and the list goes on…

Is it time for a full-on public intervention?

A Citizen’s Assembly on Wild Salmon?


what a schmozzle!?

In-season forecasts for Fraser sockeye continue to climb, climb, climb… Last year pre-season was high; in-season reality was disastrously low. This year pre-season forecast low (manipulated computer models to make it so); in-season reality substantially higher than pre-season forecast.

Early Summer pre-season forecast = ~760,000… In-season is now 2.9 million.

Summers pre-season forecast = ~2.6 million… In-season is now at 4 million.

Late summers pre-season forecast = ~8 million… In-season is creeping up, now at 8.5 million.

Yup… good thing we know what’s going on out there….

_ _ _ _ _

On another note, former DFO scientist Otto Langer has resigned from a Marine Stewardship Council (MSC) committee due to the MSC’s decision to “eco-certify” Fraser sockeye fisheries.

Richmond biologist quits MSC over sockeye certification

There is reference to the work of the Cohen Commission — e.g. the decision by the MSC to certify undermines the Commission. Funnily enough, from what I understand of the MSC they have a policy that suggests they won’t intervene or make decisions on fisheries that are subjects of court proceedings or things like public inquiries….

Ah well… I guess policies are just ‘guidelines’… like the Wild Salmon Policy… or the BC bike helmet law…

_ _ _ _ _

I do feel for Justice Cohen… ridiculous timelines; rushed priorities; disbanded scientific panel; resignations, etc… Maybe we’ll get a federal election call in the middle of this as well…

Should be some interesting public hearings… granted folks only get 10 minutes…

Marine Stewardship Council to assist England in next World Cup of Soccer?

Maybe the English football/soccer team should talk to the Marine Stewardship Council to have it assist in the next World Cup?

The MSC record is perfect, impeccable…

89 Wins – 0 Losses – no draws.

Monday’s MSC “independent” adjudication (by an adjudicator on salary to the MSC) dismissed objections from three B.C. organizations to the MSC’s “independent” review of the Fraser sockeye fishery (the same fishery that hasn’t actually happened in three years because of “low abundance” — Department of Fisheries and Oceans’ new favorite oxymoron).

eco-sustainable according to the MSC

The Marine Stewardship Council is now approaching “eco-certification” on 10% of the world’s fisheries. There are now 89 fisheries “eco-certified” including one of the biggest fisheries on Earth – Bering Sea Pollock fisheries.

Which, coincidentally, catches more salmon as bycatch (i.e. tossed overboard dead) then some of the salmon-focussed commercial fisheries of western Alaska – which also “coincidentally” crashed this past year on the Yukon River — see post from earlier this year: solving the mystery of ocean conditions and disappearing salmon. Both “ecocertified” by the MSC.

How is it Marine Stewardship Council that you can certify one fishery that leads to the collapse of another one of your “ecocertified” fisheries?

In all 89 fisheries “ecocertifed”… number of certifications denied?  Zero.

Number of certifications denied  after independent adjudication of objections?


Number of certifications taken away because fishery deemed no longer sustainable?


Even the New Zealand hoki fishery, one of the first MSC ecocertified fisheries — collapsed a few years after certification. Was the little blue label taken off?


This “eco-certification” scheme is a joke.

The organization was originally formed through a partnership of the World Wildlife Fund (WWF) and the mega transnational corporation Unilever (once one of the biggest sellers of packaged fish in the world). The MSC now has independence from its corporate-colonial roots and runs around asking national governments for money to fund its operations.

I’m not sure if they know how to spell “greenwash” in the London MSC offices – but it’s with a capital “G”. And fraud is with an “f”.

And thanks to the active participation of the Department of Fisheries and Oceans in the MSC process…

Marine Stewardship Council — about as credible as Bernie Madoff?

Well, the Marine Stewardship Council (MSC) continues on its mission to become one of the biggest farces in the ocean — next to BP’s health and safety manuals and their environmental accountability (which I’m sure is inserted in their Corporate Social Responsibility Code somewhere).

The MSC decided yesterday that British Columbia sockeye fisheries are “sustainable” and should receive their little blue “ecocertification” — most likely so they can be sold in WalMart stores around North America (see post: there is probably no connection…Wal-Mart, MSC, 2011…).

Oh wait… there hasn’t been a sockeye fishery on the Fraser River in three years. Yup… sustainable…

As a Globe and Mail article from yesterday – Fraser River sockeye certified sustainable – states:

Since the group [MSC] was founded in 1997, it has granted its eco label to 89 fisheries around the world. An additional 120 fisheries are in assessment.

If you haven’t seen some of my earlier posts on this greenwashing organization simply click “Marine Stewardship Council” in the tag cloud, or search it on this site. Or specifically maybe read Lesson 1, Lesson 2, and Lesson 3 for the Marine Stewardship Council in how NOT to earn credibility.

Not to mention the most popular post on this site: $2 for one wild salmon… do you see a problem?

In an earlier post, it appeared that MSC had eco-certified 65 world fisheries — according to the Globe article they are now up to 85. That’s impressive when the United Nations Food and Agriculture Organization (FAO) continues to blow the alarm on worldwide fisheries:

The FAO has reviewed 584 fish stocks and species from oceans around the world. Sufficient information has been available for the FAO to assess the health of 76% of these stocks and species. The FAO found of the fish stocks and species it has assessed, more than three quarters are fully exploited, overexploited, depleted or recovering — and, therefore, can no longer sustain expansion of the fishery. Furthermore, expansion of fishing activity is extremely risky in those stocks with an unspecified or unknown status.

Do you think that the MSC “eco-certified” fisheries are part of the 25% of the stocks with enough information to adequately assess that are not fully exploited, overexploited, depleted or recovering?

Well… no.

_ _ _ _ _

Regarding B.C. sockeye, the MSC suggests in their press release:

For this fishery, there is uncertainty in the scientific community as to the reasons for low sockeye returns; however, there is general agreement that commercial fishing pressure is not the cause for these declines since breeding stock levels were high in the years that spawned the fish now returning in low numbers (four years previous).

I don’t even know where to begin on this bogus claim, plus let’s not forget this little $15-$20 million exercise called: the Cohen Commission into Declines of sockeye salmon in the Fraser River.

Would the United Nations FAO get away with statements like this?

Yeah… you know those 75% of world fisheries that are fully, overly, and completely maxed out… fishing isn’t the problem. It’s other mysterious things.

Come on folks, pull your heads out of your ass! Pardon the crude expression, but this is an joke.

Have folks not seen this graph?:

Salmon think tank

What f’in population of anything can sustain having at least 80% of its population killed year after year.

Not only that… scientists do know that salmon are a “keystone” species. I think most folks recognize what that is… it’s that key rock in an arch:

from Wikipedia

Pull that rock out and the whole frigging thing comes crashing down in a pile of rubble.

So what do we know now, or have known for several decades… salmon feed ecosystems. Not just other animals, salmon carcasses release key nutrients to trees, bush, shrubs, and so on. Research in coastal BC has correlated years of accelerated tree growth with years of large salmon runs.

Gee… what a concept. Part of the freakin reason that so many of the world’s fisheries are depleted is to make f’in fertilizer for crops.

In coastal forests, the fertilizer returns naturally every year. However, research conducted in Washington State (Bilby and others) and other areas has proven a direct link between carcasses of parents feeding the next generation of baby salmon — either through direct feeding on remnants of carcasses in the spring following spawning, or on insects that fed or were spawned from salmon carcasses (ever see all those maggots in spawned out carcasses?).

And so what happens when industrial salmon fisheries over the last 100 years arrives and rapes 80% of the keystone species (remember 80% is a rough estimate…). Well, then the productivity of a system is eventually going to crumble as the “keystone” decays…

Oh wait… like this, maybe:

salmon think tank

If this graph above represented a financial stock that I owned and Department of Fisheries and Oceans (an active participant in the MSC certification process) was my financial advisor… I would have been asking some hard questions in about 1995.

With inaction, I would have started asking harder question after 2000, when you compare the blue graph to the red graph. Productivity was still on a nose dive, yet DFO allowed upwards of 50%-60% of Fraser sockeye to be harvested.

Actually, it wouldn’t have been hard questions by about 2003 — I simply would have fired them.

And since DFO and the MSC worked “closely together” on this assessment of BC sockeye fisheries — they should probably go about the same route as Bernie Madoff. If you don’t know who Bernie Madoff is he set up a grand Ponzi scheme that de-frauded people of over $65 billion between the 1980s and 2000s.

the latest disconnection notice.

In some February posts I discussed some disconnection notices that needed to be sent out — mainly to the Marine Stewardship Council (MSC) which apparently certifies “sustainable fisheries”. This includes a pending “eco-certification” of British Columbia sockeye fisheries. Yes, this is an “eco-certification” of a “sustainable” fishery, that on the Fraser River, hasn’t actually happened for the last three years.

There is another certifying body out there that the MSC apparently modeled their approach after — the Forest Stewardship Council (FSC). The FSC eco-certifies wood and wood products from sustainable sources and logging practices. The certification is also a branding strategy that opens various markets for these products — specifically for more environmentally savvy consumers that are demanding “sustainable” consumer products. For example, some retail outlets suggest they will only sell wood and wood products that are FSC-certified.

This is now the case with seafood — with retailers like Wal-Mart apparently turning over a new “eco” leaf.

I tend to draw a comparison between the Marine Stewardship Council deeming Fraser River sockeye fisheries “sustainable” with the Forest Stewardship Council deciding that wood from massive clearcuts is “sustainable” — after the logging is already done (not that they’ve done this yet).

It’s warped thinking.

It’s “air pie” thinking; as I call it… as in:

“What’s for dessert?”

“Air pie”.  A nice way of saying: “nothing”.

Worse yet — the federal Department of Fisheries and Oceans is fully complicit; they participated in the certification process and will play a big part in maintaining certification as they are the managing-body for the sockeye fishery. (That is, if current objections to the certification fall by the wayside, which is what has happened to every objection filed on the over 60 fisheries that the MSC has eco-certified worldwide to date.)

Thus… the federal department responsible for ensuring the future of wild salmon in British Columbia (the same federal department that has invested hundreds of millions of dollars in salmon farming on the BC coast) is in full support and agreement that Fraser River sockeye fisheries are “sustainable” and should be “eco-certified“.

Maybe the multitude of folks that work within the federal department are just really hopeful?

Maybe the “air pie” sockeye fishery of the Fraser  – will no longer be “air pie”?

Maybe they are really hopeful that last year — when only 1 million sockeye returned to spawn in the Fraser River– was a “one-time only event“? (which is what I have heard on several occasions over the past few months from various DFO staff)

Look at this graph of productivity (from Pacific Salmon Commission biologists) — it’s the slowest train wreck ever seen. As I’ve mentioned with this graph before: the bare minimum for sockeye runs to replace themselves is two adult returns per spawner. In 2009 productivity is less than one adult return per spawner. This suggests that Fraser sockeye runs, on a whole, could be shrinking by half each life cycle.

I keep hearing folks talking of a “collapse” last year. Yeah, it’s a “collapse” like an old house collapses.

In the early 1990s cracks started showing in the foundation — but no one paid attention. By the end of the 1990s the foundation was crumbling, rafters were sagging, the roof past needing replacement, windows leaking….

By the early 2000s, doors falling off hinges, floors caving in, roof simply cosmetic, wind blowing through walls…

And then last year the entire house falls in a pile of splinters, rubble and dust.

“It collapsed!” people shout. “The house has collapsed!!”

Well… yeah… it’s been in a serious state of disrepair for almost 40 years. Twenty years ago it started showing signs of deterioration.

The curious thing is that government departments would have certified that house….

certified it: condemned.

this is your disconnection notice.

Yesterday, some headlines in various newspapers and media sites highlighted the recent jump in salmon prices. The main reason? — a drop in world supply. The reason for the drop in supply? A major outbreak of disease in Chilean salmon farms — infectious salmon anemia.

Bloomberg.com reported:

World Salmon Supply to Drop Most Since 1990 on Virus

Feb. 24 (Bloomberg) — Global supply of Atlantic salmon will decline the most in two decades this year after a virus decimated output in Chile, bolstering the steepest advance in Norwegian prices since at least 2000.

The harvest will drop 5 percent to 9 percent, the first “significant” decline since 1990, said Joergen Christiansen, a spokesman for Oslo-based Marine Harvest ASA, the world’s largest salmon farmer. Norwegian export prices for fresh salmon rose 14 percent to 34.88 kroner ($5.86) a kilogram (2.2 pounds) this year, according to Statistics Norway.

Salmon output in Chile, the second-biggest source, may slide 38 percent this year, the national industry association said last month. The volume of fish harvested in Chile plunged 65 percent in the fourth quarter, Marine Harvest said Feb. 10. Fish farms in the country have been hurt by outbreaks of infectious salmon anemia.

“The main explanation behind the strong salmon prices is the dramatic supply fall from Chile,” said Aslak Berge, an analyst at First Securities ASA in Oslo. “Given that Atlantic salmon is among the world’s most rapidly growing food industries, the fall has boosted prices.”

Right, so if you are one that subscribes to “supply and demand” theories then there seems to be a connection here. Supply drops, prices rise. If this is the case — could commercial fishermen see a rise in prices for wild-caught salmon in the upcoming season?

Most likely not.

Take a look at wild salmon prices for fishermen in Alaska over the last several years (from G. Knapp and co. – The Great Salmon Run).

As, Knapp and co. point out:

The salmon industry has experienced dramatic change over the past two decades. Two major trends gave rise to many of the issues discussed in this report. The first trend is the rapid and sustained growth in world farmed salmon and salmon trout production, from two percent of world supply in 1980 to 65 percent of world supply in 2004…

This development has fundamentally transformed world salmon markets—not only because of the dramatic growth in total supply, but also because of changes in the kinds of salmon products which are available, the timing of production, market quality standards and organization of the industry.

The curious part about this:

The second trend is a steep decline in the value of North American wild fisheries, as seen in the decline in the value of annual Alaska salmon catches from more than $800 million in the late 1980s to less than $300 million for the period 2000-04 expressed in 2005 dollars…

Most of this decline in value was due to a decline in prices (rather than catches), and much of the decline in prices was due to competition from farmed salmon.

However, it’s not just farmed salmon, as the text that accompanies the above graph points out:

…between 1988 and 2002 there was a steep decline in the real ex-vessel value of Alaska commercial salmon catches (“ex-vessel value” is the value paid to fishermen). British Columbia salmon fishermen have experienced an even more dramatic decline. More than half of this decline was in the value of sockeye salmon catches. The decline in value of sockeye catches resulted from a decline in both sockeye prices and sockeye catches. The modest rebound in value since 2002 has also resulted primarily from an increase in sockeye catches and prices.

I’m a bit confused by all this…

When disease rips through salmon farms in Chile – the world price of farmed salmon goes up. But, when there is a decline in sockeye catches the price went down? And, then when the catch goes up there is a “modest rebound in value”?

Is this not the opposite of the typical supply and demand theory?

Maybe there’s a bit more light provided by G. Knapp and co.:

This role of sockeye salmon is important to emphasize, because until recently almost all Alaska sockeye salmon was either frozen and sold in Japan or canned. Only a very small share was sold in the U.S. fresh and frozen market. Thus much of the decline in sockeye catch value (and the total Alaska catch value) had very little to do with competition between farmed and wild salmon in the U.S. fresh and frozen salmon market—but resulted rather from changes in other markets. (my emphasis)

As pointed out in earlier posts (there is probably no connection…Wal-Mart, MSC, 2011…), there is a worrisome relationship between the Marine Stewardship Council and Wal-Mart.

The Marine Stewardship Council has “eco-certified” Alaskan salmon fisheries and is close to “eco-certifying” British Columbia sockeye fisheries as “well managed and sustainable” — despite the fact that there has been no sockeye fishery on the Fraser River for three years due to conservation concerns.

Wal-Mart has suggested all of their seafood products will be from “sustainable” sources by 2011 — one of their more popular products: frozen “Alaskan sockeye salmon”.(They also sell a lot of farmed salmon)

Yes, Wal-Mart — the basically glorified dollar store, the “low-cost” leader, the sultan of cheap. Do you think Wal-Mart is going to pay top-dollar for “wild” products that they’re going to turn around and try to sell cheap?

Highly doubtful.

If Wal-Mart could figure out a way to have wild Alaskan sockeye salmon “made in China” at the cheapest price — they would.

Added further to this equation — Target, another U.S. low cost seller with over 1700 retail outlets, has committed to no longer selling farmed salmon at of their stores. Gee… this will be a boom for commercial salmon fishermen in Alaska and British Columbia. Two major U.S. low-cost, super-retailers looking to buy wild salmon at the lowest possible price…

Yup — this is your disconnection notice.

There are some serious disconnects here… (look for more in upcoming posts).

do you see a problem?… part II

When Wal-Mart makes an investment in anything — people tend to pay attention. Wal-Mart’s tag line these days is: “Save money. Live better” .

(I’m not entirely sure whether that tag line is referring to Wal-Mart shoppers — or if they have been so brash as to simply state the mission of Wal-Mart ownership…)

“Saving” shoppers money generally means that goods sold in Wal-Mart stores need to be acquired at significant discounts. Sometimes Wal-Mart can do that through sheer volume buying — or they utilize pretty shady practices to ensure they are acquiring goods as cheap as possible (i.e. manufacture in other countries), or they simply have their goods made (or stores built) by the absolute lowest bidder.

Here is an illuminating quote from U.S. Congress representative Bernie Sanders from 2004:

Wal-Mart has replaced General Motors as the largest employer in America with over 1 million employees where, instead of earning a middle class wage, workers earn starvation wages of $13, 681 per year a salary that is below the poverty line. Meanwhile four out of the top ten richest people in America are relatives of Sam Walton Wal-Marts’ founder, and are worth over $100 billion.

I can only imagine what the situation is now – over 6 years later.

As mentioned in a post the other day (there is probably no connection… Wal-Mart, Marine Stewardship Council, 2011…) there is a worrisome link between Wal-Mart and MSC.

Wal-Mart is now probably one of the biggest sellers of seafood in the United States. Wal-Mart has suggested all wild seafood sold in stores needs to be “ecocertified” by 2011. The Marine Stewardship Council is “ecocertifying” fisheries faster than a grizzly bear knocks salmon out of a river in Alaska (see earlier posts under tag of “Marine Stewardship Council”).

A curious headline — from 2008 Anchorage Daily News:

Alaskans Welcome Major New Wal-Mart Investment in Wild Bristol Bay Salmon

In their letter to Wal-Mart, representatives of the United Fishermen of Alaska, the Bristol Bay Regional Seafood Development Association and Alaska Independent Seafood Marketing Association wrote, “As Bristol Bay fishermen, we are proud of our sustainably managed, Marine Stewardship Council certified fishery and our healthy, wild salmon products. Your choice to buy our sockeye salmon represents an important investment in both the economic and ecological health of the Bristol Bay region.”

I’m a bit confused by all of this fuss. The 2007 report The Great Salmon Run by G. Knapp, Roheim, and Anderson out of the University of Anchorage point out that the most important markets for frozen and canned sockeye salmon (by far the biggest fishery 182.3 million pounds this past year in Bristol Bay, next closest fishery was chum fishery with 8.6 million pounds) is Japan and the United Kingdom.

I don’t have the numbers – however I am guessing that the Japanese market is paying more for frozen sockeye salmon than Wal-Mart. If so, couldn’t these higher prices benefit local fisherfolks?

The 2007 report states:

The most important market for sockeye salmon is the Japanese frozen salmon market…More than twice as much U.S. fresh and frozen wild salmon is exported than sold in the U.S. domestic market.

So I’m not clear — why are folks excited about Wal-Mart involvement in the Alaskan salmon market?

The Japanese market is huge at over 500,000 metric tonnes a year with approximately 80,000 – 100,000 metric tonnes of wild North American salmon (and 250,000 – 300,000 metric tonnes of Russian and Japanese “wild” salmon 95% of Japanese catch is salmon ranching).

The U.S. market is a little more than half of the Japanese market with over three quarters of the market represented by imported farmed salmon. Wal-Mart also sells an incredible amount of farmed salmon – so how “eco” can they really be in their efforts?

The glut of farmed salmon on the market has also destroyed the prices of wild salmon.

There’s a reason that wild sockeye used to fetch a fisherman over $2 a pound and now, over the last several years, a fisherman gets about $0.70 per pound for wild sockeye.

This is supply and demand gone awry. One would think that the price of wild sockeye would be rising due to far less supply of wild sockeye. There was only a tiny sockeye fishing opening in British Columbia this year and no commercial salmon fishing of any kind along the coasts of California, Oregon, and Washington.

Sockeye fisheries have been sliding for years – in other words: less supply. Yet, prices have also been sliding. This graph shows the price per pound given to fishermen in Alaska.

Is this all due to a glut of farmed salmon on the market – or maybe because low cost providers such as Wal-Mart have entered the market?

So even if Wal-Mart starts sucking up more of that supply destined for Japanese market – does anyone think a giant such as Wal-Mart is going to accept any salmon prices going up? Say in the $1 to $1.50 per pound range…?

As the article concludes:

Bristol Bay sockeye salmon are in Wal-Mart freezers now, at 233 stores and will be available to consumers as long as supplies last. (my emphasis)

How does the jingle in the various commercials go?: “get ’em before they’re gone”.

And, what happens when supplies are gone?

Have salmon fisheries become a Ponzi scheme?

BOARDED LANDSCAPE WITH TREES approx 18" x 28" by Simon Davies

It seems that Ponzi scheme is something we are all becoming more familiar with these days. Bernie Madoff as one of the more prominent in headlines. In today’s Globe and Mail there is the headline of Earl Jones being sentenced to 11 years in prison for running a Ponzi scheme that cost investors over $50 million. Madoff’s was more impressive with investor losses an estimated $65 billion (yes that’s with a ‘b’).

As the definition on Wikipedia suggests:

A Ponzi scheme is a fraudulent investment operation that pays returns to separate investors from their own money or money paid by subsequent investors, rather than from any actual profit earned. The Ponzi scheme usually entices new investors by offering returns other investments cannot guarantee, in the form of short-term returns that are either abnormally high or unusually consistent. The perpetuation of the returns that a Ponzi scheme advertises and pays requires an ever-increasing flow of money from investors to keep the scheme going.

Now, the thing with Ponzi schemes is eventually the bubble bursts. Eventually something has to give and the scheme becomes evident – either the initiator walks with the cash, or folks get caught and put in jail like Madoff and Jones.

I’m not one to suggest that fisherfolks are raking in big profits — by any means. The last several years, even decade or more have been disastrous for owner-operators of many commercial fishing boats from California to Alaska. Boats that are not part of corporate empires (such as Jimmy Pattison’s Canfisco) have been in really tough.

As mentioned in previous posts, this year on the coasts of California, Oregon and Washington all commercial salmon fisheries were shut down. (this despite over $ 6 billion in direct funding to fish recovery projects in the Columbia River alone between the 1980s and early 2000s)

However, to the north in Alaska commercial salmon fisheries appear to have been decent – except of course with the exception of the Yukon River Chinook fishery (it crashed). Yet, as also pointed out in earlier posts, a large proportion of the Alaskan catch is propped up by salmon ranching activities – whereby baby salmon (billions) are pumped out of hatcheries, raised in net pens near the mouths of streams, then sent out to the North Pacific (the pasture) and caught in commercial fisheries upon their return.

Various estimates suggest that salmon ranching is responsible for between 35%-45% of the total commercial salmon catch. In places like Prince William Sound salmon ranching accounts for over 90% of the commercial catch.

In British Columbia, almost 200 salmon hatcheries around the province pump out almost 600 million baby salmon. Estimates suggest around 30% of the total commercial catch are hatchery releases. Fisheries and Oceans Canada Salmon Enhancement Program has an annual budget of over $30 million. Various foundations, countless volunteers, and other funding bodies prop up many of these hatcheries – meaning the annual cost of pumping out baby salmon is much higher.

If we then start to add in the cost of fisheries management and salmon research (total annual Fisheries and Oceans Canada fisheries management budget is over $200 million per year) then add in fuel subsidies, dock subsidies, license buy-back schemes, and then habitat restoration and enforcement – and, wow, is this really a worthwhile investment?

The bulk of commercial fisherfolks that target salmon are getting hit hard by dwindling salmon stocks and shorter fishing seasons. However, someone somewhere has got to be making a profit – a substantial one – otherwise what’s the point of all this?

What’s the point of some salmon marketing association pushing for over nine years to secure an “ecocertification” (Marine Stewardship Council) on B.C. sockeye salmon?

An ecocertification that appears largely geared to simply supplying massive U.S. retailers Target and WalMart.

An ecocertification that is based on a non-fishery this year on the Fraser River.

(that’s what I call ecocertifying air pie — why certify something that does not exist? – the Fraser sockeye population crashed – isn’t this like some National Safety body certifying a plane that just crashed into the ground?)

As I mentioned in a post the other day (It’s not the economy stupid, it’s you…) the BC salmon fishery only had a landed value of just over $40 million in 2007 – with sockeye representing 9% of the catch but almost 50% ($20 million) of value.

Where’s the investment pay-off? And who the heck is reaping that benefit?

Remember – “A Ponzi scheme… pays returns to separate investors from their own money or money paid by subsequent investors, rather than from any actual profit earned” – from what I can see in the numbers somebody must be reaping a profit from the 2007 $40 million in landed value of salmon.

However that $40 million is a result of government investment – investment that represents a huge net-loss to government (and hence citizens).

Even just factoring in the $30 million a year to run the federal Salmon Enhancement Program – let alone salmon management, research, habitat restoration, and fisheries enforcement (let’s say a very rough estimate of $100 million a year).

So remember that part about: “The perpetuation of the returns that a Ponzi scheme advertises and pays requires an ever-increasing flow of money from investors to keep the scheme going.”

It seems that the “investors” that are keeping the flow of money going is the federal government – through Fisheries and Oceans Canada – I’m just wondering who gets the perpetual returns?

My experience suggests that it sure as hell isn’t coastal British Columbia communities — or owner-operator commercial fisherfolks.

My point here is not to suggest that there may be some conspiracy afoot, it’s more related to my post to the other day. “It’s not the economy Stupid, it’s you!

If your sales are down 40 percent or 50 percent and you’re continuing to lose money, you haven’t adapted to the changing market realities. If you’re at the point where you’re not able to realize modest profits and pay yourself, it’s probably because the recent years of unparalleled national prosperity put you into a coma. You have a choice: Wake up or pull the plug.

The numbers of landed salmon over the last decade to two have been dropping faster then rain on the Olympics, the value of those landings (i.e. sales) even faster – and yet the costs (or investment into the scheme) of salmon management, enforcement, habitat restoration, and interventions such as hatcheries and license buy backs are going up.

Maybe it’s time to pull the plug… and figure out a better way… one that supports and facilitates healthy coastal communities.

there is probably no connection…Wal-Mart, MSC, 2011…

Do you have those moments sometimes when you feel like you’re in a really crappy spot?

Those moments if you turn one way you’re going to get a wallop in the face… if you turn the other way you’re going to get a swift kick between the legs…?

Owning a cell phone for example. No matter which way you go at it you’re going to get charged the monthly “system access fee” and “911 coverage” (even if you live in area where there is no 911). Dealing with big banks… there’s a charge for everything – unless of course you have lots of money in the bank. My online investment firm – if I have more than $50,000 with them then there are less charges then if I have $1000. This makes no sense to me – well, OK, I understand why, it just seems like reverse logic.

So then, what does one say when corporations like Wal-Mart make “sustainability” commitments?

They are massive, huge, gravity defying. What do the stats suggest – five of the ten richest people in North America are attached to the Walton-WalMart empire?

When stores like Home Depot and Lowe’s say “no more old growth” lumber; we will only sell eco-certified products?

These types of companies have the ability to almost fundamentally shift entire consumer markets. And environmental organizations recognize this – that’s why they hammer away on mass consumer chain stores to change what they sell.

This was apparent recently when consumer giant Target announced it was not selling farmed salmon anymore at its over 1700 U.S. stores.

In the case of Wal-mart and seafood – it also worked. With pressure from various conservation organizations (and WalMart’s general altruistic nature), Wal-mart announced it was moving to:

Purchase all wild-caught fresh and frozen fish for the U.S. from Marine Stewardship Council (MSC)-certified fisheries by 2011.

They first announced this initiative in Feb. 2006, just over four years ago:

We believe it’s absolutely essential to take a leadership role in working with suppliers to ensure that the world’s wild fish populations can grow and replenish themselves,” said Peter Redmond, Wal-Mart vice president and divisional merchandise manager of deli and seafood.

Back in February 2006, the company stated that it is “giving non-certified suppliers three to five years to develop plans and programs to become certified. If these suppliers commit to this initiative and succeed within that timeframe, Wal-Mart will continue to work with them.” There were also quotes from the Marine Stewardship Council about how wonderful this is:

“This is a big and exciting development, demonstrating a leadership position,” said Rupert Howes, chief executive of the Marine Stewardship Council. “As part of a wider company commitment to sustainable seafood procurement, Wal-Mart has committed to source, over a number of years, all of its fresh and frozen wild capture supplies for the United States market from fisheries certified against the MSC’s standard. It is hoped that this commitment to the MSC program will encourage other fisheries into the assessment process and provide a powerful new route to raise awareness of sustainable seafood choices with the American public.” [my emphasis]

If you like, you can watch a lovely five minute video at the Walmart website with Walmart, MSC, and Conservation International singing the praises of this program – all backed by lovely music.

I was inspired.

So, yes, Wal-mart can affect mass change. Say for example, every Wal-mart outlet went from standard lightbulbs to energy savers – there would all of a sudden be giga-giga-watts to put back into the electrical grid. Or, if they decided that every roll of toilet paper sold was going to be made from recycled materials. Or, if they started a cost saving initiative and told every employee they had to bring their own toilet paper to work (or better yet just get rid of bathrooms…)

These sorts of initiatives have an impact.

However, there is probably no connection between the Marine Stewardship Council raising the number of “ecocertified” fisheries by over 50% – from just over 40 to 65 now – since the 06 Wal-mart announcement.

If you watch the lovely promotional video with Wal-mart, MSC, and Conservation International executives – you will hear the Wal-mart executive state that one of the most popular seafood products in their stores is “Wild Alaskan salmon”.

So there’s probably no connection with the big push to get British Columbia sockeye salmon fisheries certified even though there is currently a judicial inquiry underway to figure out how the Fraser River sockeye run (the largest sockeye fishery in the province) collapsed this past season and the fishery was closed. (Isn’t certifying a non-fishery kind of like air pie?)

Or British Columbia pink and chum salmon fisheries (still in independent eco-assessment).

I’m also guessing there is no label on those best selling Wal-mart & Marine Stewardship Council certified Alaskan pollock fish sticks that states:

“this fishery is eco-certified; however it is also solely responsible for wiping out the entire Alaskan Yukon River Chinook fishery as the Bering Sea pollock fishery is permitted to catch up to 60,000 Chinook salmon a year as bycatch (more than the actual annual in-river fisheries) which coincidentally is thrown overboard dead as an illegal species ”

“and, oh yeah, that pollock trawling fishery caught over 700,000 other salmon as bycatch a few years ago…”

“And… don’t worry we are going to open a Wal-Mart Supercentre in Nome, Alaska so people up and down the Yukon River can come and get MSC ecocertified fish products from industrial-international trawl fleets to make up for the lost subsistence, food, and small commercial fisheries along the entire 3200 kilometre Yukon River.”

Or better yet, with Wal-Mart’s eco-commitment maybe they can ship out ecocertified fish to rural Yukon River communities from their stores in Whitehorse, Yukon; Fairbanks, Alaska; and Anchorage, Alaska? Maybe fish products from the MSC ecocertified New Zealand hoki trawl fishery that collapsed a few years ago, or the Pacific hake trawl fishery, or the just certified Bering Sea Pacific cod fishery…?

Sure does have an impact when Wal-Mart goes green… just wondering how good that kick between the legs felt for rural folks on the Yukon River?