Alaska seafood processors expect to spend more this year on pandemic-related costs

People in gloves and smocks take the bones out of fish.
Workers remove the bones from salmon fillets at Alaska Glacier Seafoods’ Auke Bay processing plant (David Purdy/KTOO)

Alaska’s seafood industry has a lot of moving parts. There are the fishermen, the processors and the market, plus all of the fish.

By all accounts, the pandemic has hit the processors hard.

A recent survey found that they spent about $70 million on COVID-19 mitigation measures and other pandemic-related costs in 2020. This year, that total is expected to be even more: Over $100 million.

A lot of that has already been spent, said Dan Lesh of the McKinley Research Group.

“There were challenges and some plant closures that happened despite all these protocols,” he said.

McKinley surveyed seafood processors and others in March about the effects of COVID-19 on Alaska’s seafood industry. Lesh said the flat fish industry was hit hard with coronavirus outbreaks in January, causing expensive plant closures. Those costs are in addition to the ongoing price for pandemic mitigation.

“A lot of these costs are already baked in, and my understanding is that most the mitigation measures will be continued,” he said.

In other words, this calendar year has more months when processors will be dealing with the pandemic.

RELATED: COVID-19 closes a third Aleutian plant, stranding Bering Sea fishermen at the dock

Processors surveyed said their peak employment last year dropped 31% because of intentionally smaller workforces, as well as problems recruiting and retaining workers. Two-thirds of processors received pandemic relief money, but it only covered about a quarter of their costs, on average.

“None of the processors said it covered even half of their costs,” Lesh said. “Thirty-five percent was the highest estimate we got in our survey.”

But Lesh said there’s hope that more relief money could come this year with newer programs.

As for the seafood market? While it’s hard to summarize all species together, some areas saw growth, Lesh said. Take salmon, he said.

“Every indication is that everything’s been sold out from last year,” he said.

“There were times where we saw 30-40% increases in frozen and fresh seafood sales,” said Ashley Heimbigner of the Alaska Seafood Marketing Institute, which contracted the research group for the surveys.

Heimbigner said online seafood sales skyrocketed during the pandemic.

“So people are also getting more comfortable buying seafood online,” she said “And that’s through Instacart or their local grocer, but also through community-supported fisheries and direct marketers ordering direct from fishermen.”

That’s online, though. The food service market dropped out as restaurants were closed. And that instability affected prices paid to fishermen.

Then there’s the fish: 2020 is considered the worst year for the salmon returns since the 1970s, and the state is seeking eight separate fisheries disaster declarations.

The forecasts for some species don’t look very promising.

Chum are expected to be down 23% from the 10-year average. Pinks, which return every other year, could be down 41% from recent odd-years.

But it’s hard to predict what exactly the season will be like. One thing’s for sure: vaccinations are going to play a major role.

One of Alaska’s biggest processors, Trident Seafoods, is requiring a fully-vaccinated workforce for its Petersburg plant. Last year workers stayed in a closed campus. In an email, spokesperson Shannon Carroll said they’ll keep the campus open this year with some restrictions, as long as the town is in a low-risk status.

Tonka Seafoods, a smaller local processor, isn’t requiring vaccinations but is strongly encouraging them with incentives. Co-owner Seth Scrimcher said about 80% of its workforce is vaccinated.

Petersburg’s largest processor, OBI, which employs hundreds of workers, would not comment for this story. However, Petersburg’s emergency operations center said the company told the borough it planned a 90% vaccination rate for resident employees and 100% for transient workers. And if they achieve this, then they would likely have an open campus.

Ultimately, how 2021 will turn out for the multi-billion dollar industry remains unknown — at least for now.

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Angela Denning is a reporter at KFSK in Petersburg.

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