Alaska's salmon and pollock sectors will count 2018 as one of their best in years, thanks to brisk global demand and tightening supplies of both whitefish and salmon.

Garrett Evridge, an Alaska-based fishery economist with the McDowell Group, told an audience Sunday at Pacific Marine Expo (PME) in Seattle the state's 2018 salmon season ranks as one of the most valuable on record, even though volumes were down.

"It's an interesting dynamic with low volume, but everything we caught was worth a lot," he said.

The annual average of Alaska's ex-vessel volume across all fisheries amounted to 5.9 billion pounds worth $1.9 billion (€1.7 billion), with salmon from Alaska accounting for more than 30 percent of that value at $595 million (€519.3 million), according to data from the McDowell Group.

While total salmon harvests in the Alaska commercial salmon fishery declined 13 percent in value from 2017, Bristol Bay’s harvest of 41.3 million sockeye, worth an estimated $275 million (€240 million), was a record for both volume and value this year.

The 2018 harvest is the seventh most valuable since 1975, according to Evridge. Excluding 2016, the total harvest volume was, however, the smallest in 34 years. The sockeye harvest was the second-most valuable in 26 years and the chum harvest was the third-most valuable since 1975.

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This year Alaska's salmon demand was high, with ex-vessel prices about $1.00 (€0.87) more for headed and gutted (H&G) than last year.

Evridge noted higher farmed salmon prices played a role.

"The rule of thumb there on farmed salmon prices is we're generally supportive of a solid farmed salmon price because we don't want to see a big differential between our wild product and the farmed salmon product," he said.

The value of Atlantic salmon imports into the United States through September rose 8 percent from the same period a year ago, according to the National Marine Fisheries Service (NMFS).

Atlantic salmon imports were at $2.6 billion (€2.3 billion) through September, up from $2.4 billion (€2.1 billion) during the same period last year.

"Salmon demand is super strong," he said. "We're seeing that on ex-vessel prices, we're seeing it with products sold by processors."

Chile, Canada, and Norway were the top three suppliers of Atlantic salmon to the United States.

Russia continues to challenge Alaska pollock

The picture for Alaska pollock has been bright this season as well. The fish's export values are rebounding from the lows of the past two years, with values for surimi up 11 percent through August and roe up 10 percent year-on-year.

"It's definitely a more optimistic picture," he said. "We're seeing values rebounding from the difficult 2016 and 2017 levels."

But Russia, Alaska's primary competition, is improving in quality and quantity.

"They're investing in offshore capacity and shoreside capacity," he said.

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Most years, Russia exports about 200,000 metric tons more pollock than Alaska, he said.

Global whitefish supply outlooks are predicted to be lower in 2019, but not by much, he said.

"When we think about global supply, the trend appears to be that Russian supply is going to start tapering in the next few years," he said, which could be favorable to Alaska production.

Pacific cod continues decline

Pacific cod supply is in a multi-year decline, with more declines expected next year, Evridge told the PME audience.

Atlantic cod supply, which is five times larger than supply in Alaska, is also expected to decline six percent into 2019.

"That restriction in supply is contributing to higher prices," he said. Through August H&G export prices were up 12 percent year-on-year.

Year-to-date roe production is up more than 20 percent, he said.

"That means the processors are retaining Pacific cod roe and selling it into a market," he said. "It's a good indicator for a solid value."

Alaska is also competing with Russia for the global cod market.

"While we have been declining over past three or four years, Russia is increasing their production," he said. "Right now Russia is contributing about one in three pounds of total global Pacific cod supply."

China trade war looms over Alaska

The US trade war with China is an ongoing situation that isn't finished, Evridge noted.

With United States set to impose 25 percent tariffs on certain Chinese goods starting in January, Evridge said Alaska products reprocessed in China that currently face 10 percent import tariffs will suffer even worse under the increase.

US tariffs are impacting Alaska flatfish producers who argue that much of the flatfish exported from China to the United States is US-origin flatfish which is reprocessed in China, and re-exported to the United States.

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The US government has removed Alaska's primary species such as salmon, cod, and more controversially, pollock from its tariff list.

However, tariffs imposed by China on seafood imports from the United States are likely to price some Alaska seafood out of China's domestic market.

King crab and fishmeal exported from Alaska to China continue to face 25 percent tariffs.

Alaska continues to face steep competition from Russia for products such as king crab, and the state's seafood is being negatively impacted by the US dollar strengthening against the yen and euro.

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Even with strong global demand, the United States remains the largest market for Alaska seafood, followed by China, Japan and South Korea.

Globally, Alaska has exported more than a billion pounds of seafood annually since 2013.