The message on prices for Alaska’s sockeye fishermen from Juneau economics firm McDowell Group this season is good, but not great.

“Despite some positive developments, fishermen should have tempered expectations about sockeye market conditions heading into the 2016 season,” reads the report, commissioned by the Bristol Bay Regional Seafood Development Association.

Though prices will be better than in 2015, “analyses conducted for this report and expert interviews suggest it is unlikely that prices will jump back to pre-2015 levels this year.”

The report builds on an April McDowell report commissioned by the Alaska Seafood Marketing Institute that touched on some of the new report’s points.

Bristol Bay sockeye salmon production is forecast to dip this year, which will solve some of the oversupply issues the market faced in 2015.

Meanwhile, farmed Atlantic production is down due to a massive algae outbreak in Chile. The U.S. dollar has weakened against key export currencies. Processors are recovering from low revenue.

Prices are already looking better than last year. According to a June 12 KDLG article, the base price at a Copper River Seafoods plant in Bristol Bay is 75 cents per pound, with bonuses available up $1.25 per pound.

Processors are geared for a big season. According to an ADFG processor survey, processors intend to purchase 35.5 million fish in 2016, which is 20 percent higher than the forecast harvest of 29.5 million fish.

Processors could work 2.6 million fish per day for about 17 days.

The Bristol Bay sockeye fishery opened June 8, but the fish have yet to come back in viable amounts to justify heavy fishing.

Last year, a total supply of Bristol Bay sockeye produced a 10-year low of 50 cents per pound in dockside pay for fishermen, later revised to 63 cents per pound.

Of the five major sockeye-producing Alaska regions including Prince William Sound, Cook Inlet, Kodiak and the Alaska Peninsula, only Bristol Bay had this low a price.

Two-thirds of the world’s wild sockeye came from Alaska on average between 2011-14. Bristol Bay produced 38 percent of the world’s wild sockeye supply last year, more than any other region. Another 25 percent came from other Alaska areas.

Much of price decline came from a spike in supply in 2014 and 2015. From a 10-year low of 301 million pounds in 2013, harvests went up 78 million pounds in 2014, the largest production figure since the mid-1990s. In 2015, the numbers shot up even more with about 36 million sockeye harvested in Bristol Bay.

“Preliminary estimates suggest sockeye harvests increased by approximately 18 million pounds in 2015, with Bristol Bay accounting for nearly half of worldwide sockeye production,” according to the report.

Bristol Bay wild sockeye salmon competes with farmed Atlantic salmon in both domestic and foreign markets. Last year, farmed production from Norway, Chile, and Canada was high, further deadening sockeye prices.

This year, McDowell Group expects farmed Atlantic production to drop 6 percent and Chilean coho production to be down 20 to 30 percent, both due to a toxic algae bloom in Chile.

Norwegian salmon producers have also experienced a dreaded sea lice outbreak that will hurt their production numbers along with Chile.

During the low price slump in 2015, retail prices remained steady.

Fishermen had concerns that retailers and processors were sticking them with the overstock price slump, but the study said retail sales shared the burden. Retail prices did fall later along with ex-vessel price.

The average U.S. retail prices on sockeye fillets fell 9 percent to $9.98 per pound during the 2015 sales cycle.

“U.S. retailers have passed on most of the savings from lower raw material (i.e. ex-vessel) prices, though not all,” reads the report. “Retail sockeye fillet prices fell approximately $1.03/lb. during the 2015 sales cycle (compared to the previous cycle). Meanwhile, the cost of raw material (i.e. ex-vessel cost) included in a one-pound sockeye fillet fell from approximately $2.89 to $1.52 — a difference of $1.36/lb. However, this type of retail pricing behavior is not uncommon.”

Exchange rates also influenced price. Typically, when the U.S. dollar is strong against the yen and euro — currencies to key export markets — sockeye prices will lag as exports become more expensive.

In 2015, sockeye prices were at their strongest relative to these currencies since 2003 at a time when prices were at their lowest anyway.

Exchange rates have improved slightly since then. The dollar’s value dropped 1.7 percent against the euro from May 2015 to May 2016.

For the same time period the dollar declined against the Japanese yen by 10.3 percent.

The study suggests several marketing strategies to prevent the same kind of pricing issues in later seasons, including emphasis on quality, increased marketing efforts for canned salmon, and even creating a subset of Bristol Bay wild sockeye to exist on its own to help strengthen prices.

“Bristol Bay sockeye are typically marketed to consumers as ‘Alaska sockeye’ or simply ‘sockeye salmon,’” the report states. “It is possible that by differentiating Bristol Bay sockeye from other sockeye/salmon varieties, value could be added to the product.

“BBRSDA has already committed to testing this hypothesis by funding a branding pilot project in Boulder, Colorado.”

DJ Summers can be reached at daniel.summers@alaskajournal.com.