Earlier this month, reporters at Bloomberg and the Financial Times suggested that we might be nearing “peak salmon” — a play on peak oil, in which we theoretically reach maximum production, and the only direction left to go is down.
Their logic? The price for a kilogram (2.2 pounds) of Norwegian farmed salmon at the end of 2013 was 50 percent higher than it had been the previous year.
Norway is the world’s leading producer of farmed salmon, in part because the country’s narrow fjords offer favorable conditions for packing hundreds of thousands of fish together in huge, industrial operations. So the price of its salmon is a pretty good bellwether for the world market.
Both news outlets surmised that the tightening supply of fish food — in particular, fish oil made from anchovies and other small, oily species — was to blame for the surge in prices. And, they speculated, with overfishing of those fish and rising demand for salmon from China, prices could stay high, with no increase in production to bring them down.
But, like peak oil, the chance that we’ve already reached peak salmon is murky at best, says Piotr Wingaard, a broker at the Norwegian seafood brokerage Fish Pool in Oslo. Wingaard lives and breaths the global salmon trade.
“The peak salmon theory is a bit questionable, because we will have more salmon this year, and the year after we will have even more,” Wingaard tells The Salt.
Wingaard acknowledges that Norway’s salmon sector is unlikely to see the massive growth it had in recent years — for example, 22 percent growth in 2012. Even so, he says, it’s still on track to grow as much as 10 percent the next several years.
Meanwhile, prices are already dropping from their all-time high in December, which Wingaard attributes to unusually high demand from people celebrating the Christmas holidays.
And he’s not the only one saying this. Another Norwegian seafood brokerage, Fondsfinans, reported in January that it predicts farmed salmon prices will drop 40 percent by this fall from the all-time high prices reported in December.
Wingaard is also doubtful that the rising price of salmon feed, which conservation groups speculate is happening because of overfishing of small fish that end up in the feed, is having much of an impact on the price of salmon, either.
“I would say the feed is increasing in price, but it’s so low compared to the [farmed salmon] price increase, it’s almost irrelevant,” he says.
And even though he’s confident in production, Wingaard admits there are very real threats to the farmed salmon industry that could drive prices way up if catastrophic scenarios were to play out. Those threats, such as parasitic sea lice and diseases like infectious salmon anemia, are biological and, thus, unpredictable.
“These are much bigger issues than feed in terms of production,” says Wingaard.
Salmon farmers around the world have to look no further than what happened to Chile in 2007 to get a fright. The industry there was devastated by a double whammy: a ferocious outbreak of infectious salmon anemia brought over from Norway, followed by an infestation of sea lice. It’s still fighting both scourges. (Read Mother Jones’ report on how the industry controls the lice with pesticides.)
Like other salmon-farming countries, Norway struggles with sea lice, but the problem is largely contained there, Wingaard says. Still, that doesn’t mean officials aren’t worried.
He says the Norwegian government was supposed to issue 45 more licenses for new fish farms by 2014, but it is holding back. The reason? Concern that too many new farms would create a recipe for disease — and disaster.
“When these farms reach a certain level of density of fish, they can get big problems with sea lice and disease,” says Wingaard. “If we see big increases in the number of fish and farms in Norway, we could see the same problems.”
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