2002-11-01 Economic Impacts From Fishing Restrictions on the Kodiak Island Borough EconomyOFFICE of
TO: Assembly Members
FROM: Lauri Whiddon, Administrative Assistapk\
DATE: December 3, 2002 �y
SUBJECT: McDowell Report
Attached for your consideration and review is the McDowell Group Report `Analysis of
Economic Impacts from Fishing Restrictions on the Kodiak Island Borough Economy".
If you would like a color copy of this document, please give me a call at 486-9301.
DEC - 3
OF -f1C.
KODIAK ISLAND BOROUGH
OFFICE OF THE BOROUGH CLERK
COPIED TO: /
;'I0:CLERK_FILE /
ANALYSIS OF ECONOMIC IMPACTS
FROM FISHING RESTRICTIONS ON THE
KODIAK ISLAND BOROUGH ECONOMY
McDowell
G R O U P
PREPARED FOR:
KODIAK ISLAND BOROUGH
Research -Based Consulting
Juneau
Anchorage
NOVEMBER 2002
ANALYSIS OF ECONOMIC IMPACTS
FROM FISHING RESTRICTIONS ON THE
KODIAK ISLAND BOROUGH ECONOMY
PREPARED FOR:
KODIAK ISLAND BOROUGH
PREPARED BY:
McDowell
0 R 0 U P
NOVEMBER 2002
TABLE OF CONTENTS
ExecutiveSummary ........................................................................................................................1
TheKodiak Economy......................................................................................................................5
Kodiak Economic Model Output.....................................................................................................5
Kodiak's "Economic Engines"— The Basic Economy....................................................................5
Kodiak's Support Industries...........................................................................................................8
TheKodiak Seafood Industry .........................................................................................................9
SeafoodHarvesting.......................................................................................................................9
Recent Trends in Fisheries Important to Kodiak..........................................................................9
Trends for Kodiak Resident Fishermen.....................................................................................10
2000 Kodiak Seafood Harvesting Employment and Earnings Estimates....................................13
SeafoodProcessing.....................................................................................................................15
ProcessingEmployment...........................................................................................................19
Kodiak Raw Fish Tax Revenue....................................................................................................21
EXECUTIVE SUMMARY
Introduction
The Gulf of Alaska and the Bering Sea/Aleutian Islands groundfish fishery is one of
the largest volume and highest revenue producing fisheries in the world. With its
strategic location and strong fishing tradition, Kodiak is a major center for the
processing of groundfish. Kodiak consistently ranks among America's top three
seafood ports in ex -vessel value.
In 2001, the McDowell Group completed an assessment of potential impacts on the
Kodiak economy from management alternatives proposed by the National Marine
Fisheries Service. An economic model was developed for the Kodiak economy
based on published employment data, as well as on McDowell Group estimates of
the annual average employment and take-home pay of Kodiak -based skippers and
crew.
Currently, the National Marine Fisheries Service is continuing the Supplemental
Environmental Impact Statement (SEIS) process to assess effects of management
alternatives for groundfish in the North Pacific. Kodiak's economy is facing other
challenges as well, including low salmon prices and crab fishery rationalization.
This document is an update of the 2001 report and model, and reflects changes in
Kodiak's economy due to recent fishery abundance, market conditions, and
management regimes. The effects of these changes on Kodiak are summarized
below.
Seafood Industry Trends
Commercial Fishing Sector
• The Gulf of Alaska (east of Yakutat) pollock and cod quota fell by over 40 percent
between 1999 and 2002.
• Approximately 30 thousand metric tons of the available quota were not
harvested in 2000 and 2001 due to the closure of areas traditionally fished by the
Kodiak fleet, for Stellar sealion protection.
• The total salmon harvest in the Kodiak area, measured in pounds, increased by
20 percent while value declined by 66 percent between 1999 and 2002.
• Ex -vessel value in Pacific Halibut Regulatory Areas 3A and 3B, where most
Kodiak vessels fish, has ranged from $74 million to $81 million The 2001 harvest
was valued at $74 million, down about 9 percent from the 2000 value.
• Crab ex -vessel value in the Bering Sea opilio and Bristol Bay king crab fisheries,
the most important crab fisheries to the Kodiak fleet, declined by 64 percent
between 1999 and 2002. Fishermen saw the value of their crab harvest decline by
$167 million.
Economic Impacts from Fishing Restrictions on the Kodiak Economy McDowell Group, Inc. • Page 1
Seafood Processing Sector
• The poundage of seafood processed in Kodiak has declined steadily since 1998,
dropping from 390 million pounds in 1998 to 270 million pounds in 2001. The
2002 production is expected to be still lower. Groundfish volume landed at
Kodiak declined by one-third between 1998 and 2001.
• Pollock production fell from 166 million pounds to 91 million pounds, between
1998 and 2001, a 45 percent drop. Cod production peaked in 1999 at 85 million
pounds, then declined to 55 million in 2001, down 35 percent.
• Salmon landings in Kodiak increased in 2001 to 79 million pounds; however,
salmon values dropped to $19 million (a 40 percent drop from the 1999 level of
$31 million).
• Halibut poundage landed at Kodiak declined by 14 percent between 1999 and
2001 as increasing numbers of fishermen landed their fish at Homer or Seward,
where prices are higher.
• Crab value landed in Kodiak increased from $2.8 million in 1999 to $4.9 million
in 2002.
• The ex -vessel value of all seafood processed in Kodiak dropped to a three-year
low in 2001 to $81 million, down from $104 million in 1999. Cod values dropped
by 38 percent, from about $25 million to $16 million.
Trends in Kodiak's Economy
In the McDowell Group's July 2001 report, it was estimated that a 30 percent decline
of groundfish volume available to Kodiak processors would result in the closure of
one processing plant, the loss of 500 processing jobs, and 200 support sector jobs.
The study team also predicted that a portion of the current resident Kodiak
processing labor force would move because they could not afford to live in Kodiak
year-round due to reduced employment opportunities. These estimates now appear
reasonable, and perhaps some were conservative, in light of recent trends in Kodiak.
• Kodiak commercial fishermen's net income in 2001 of approximately $49 million
was 20 percent below the 1999 level of $63 million. Total income for 2002 is
likely to be still lower.
• Processing sector payroll dropped by $9 million between 1999 and 2001. The loss
of another $8 to $10 million in processing payroll is expected for 2002.
• It is expected that total seafood industry payroll in Kodiak (including
commercial fishing net income and processing payroll) in 2002 will be $25 to $30
million below the 1999 level.
• Total seafood industry employment in Kodiak in 2001 averaged approximately
2,700 jobs (including commercial fishing and seafood processing). The 2002
average is expected to drop to about 2,300 jobs, nearly 20 percent below the 1999
average of 2,800 jobs. Almost all of this decline has been in the processing sector.
• A total of four processors closed in 2001 and 2002, including Cook Inlet
Processing (doing business as Polar Equipment), Global Seafoods, Kodiak
Salmon Packers and Kodiak Seafood Processing.
• These companies accounted for an annual average of almost 300 jobs - about one
quarter of shore -based processing employment. Two of the four plants that
Economic Impacts from Fishing Restrictions on the Kodiak Economy McDowell Group, Inc. • Page 2
closed — Global Seafoods and Cook Inlet Processing — were largely dependent on
groundfish and had a combined annual average employment of 265.
• Preliminary 2002 estimates of annual average employment with shore -based
processors indicate a decline of almost 500 jobs from the 2000 peak. Shore -based
processing employment dropped from 1,458 in 2000 to an estimated 985 in 2002.
That represents a drop of about one-third. Most of this decline occurred between
2001 and 2002 (400 of the 500 jobs)
• Even before the dramatic decline in processing employment in 2002, Kodiak's
economy was showing signs of weakness. Based on McDowell Group estimates,
total borough -wide payroll declined by 8 percent between 1999 and 2001, from
$265 million to $243 million (this includes estimated net income for fishermen).
Annual average employment declined by 150 jobs.
• Kodiak's service sector has been affected by the decline in seafood industry
activity and income. For example, retail employment in Kodiak dropped by 70
jobs between 1999 and 2001.
• There are other indicators of a weakening Kodiak economy. For example, the
average private sector wage in Kodiak declined 7 percent between 1999 and 2001.
• Though it is too early to measure all the impacts on Kodiak's economy stemming
from the decline in the local seafood industry, long-term structural changes are
likely. For example, the loss of groundfish volume has led to increasingly
seasonal employment and fewer hours of work available. This has and will
continue to cause residents to leave the island to seek more stable employment.
• Structural changes in Kodiak's economy, stemming from reduced groundfish _
harvesting and processing (as well as changes in other fisheries) include a broad
range of socioeconomic implications. These include potential decline in school
enrollment, loss of tax revenues that support local government services, reduced
local investment in housing and businesses, and others.
• The shift to more seasonal labor demand will increase costs to processors, who
must recruit, house, feed, transport and train their labor force. This could result
in additional plant closures.
• Over the next several years, additional employment and income losses in
Kodiak's support sector are expected, as households and businesses adjust to the
decline in commercial fishing and processing.
• Additional economic losses associated with fisheries management actions would
further hamstring an economy that is already in recession.
A summary of these and other trends is provided in the following table.
Economic Impacts from Fishing Restrictions on the Kodiak Economy McDowell Group, Inc. • Page 3
Table 1. Recent Trends in the Kodiak's Fisheries and Economy
Sector '(Total Catch and Value of Selected
Fisheries Important to the Kodiak Fleet)
Pollock/cod ex -vessel catch (millions of pounds)
1999
160
—
20026arvesting
84
,.
48%
Halibut ex -vessel value (millions of dollars)
$76
$80
+ 6
Salmon ex -vessel value (millions of dollars)
$35
$12
- 66
Opilio king crab ex -vessel value (millions of dollars)
$261
$94
64
Trawl permits fished
40
352
12
Salmon permits fished
Sector0
Groundfish ex -vessel volume purchased (millions of pounds)
397
238
242
176
39
,.
- 35%
Groundfish ex -vessel value (millions of dollars)
$41
$33
15
Halibut ex -vessel volume purchased (millions of pounds)
9.9
8.5
- 14
Halibut ex -vessel value (millions of dollars)
$21
$16
-24
Salmon ex -vessel volume purchased (millions of pounds)
71
79
+11
Salmon ex -vessel value (millions of dollars)
$31
$19
-40
Crab ex -vessel volume purchased (millions of pounds)
1.4
1.4
0
Crab ex -vessel value (millions of dollars) $2.8
Kodiak
Shore -based processing employment 1,314
$4.9
tt
9854
+ 75
- 25% Change
Non -government support sector employment
2,430
2,400
- 1
Seafood harvesting payroll (millions of dollars)
$63
$49
- 22
Total (All Industries) payroll in Kodiak Island Borough
(millions of dollars)
$265
$243
-8
r. uata represents total catch and value in each fishery, including Kodiak and non -Kodiak resident harvests.
2. Trawl permits fished is for year 2001 and is based on preliminary data.
3. Represents 2002 processing employment estimate.
„No«° nunr rrsrung rcesincnons on the Kodiak Economy McDowell Group, inc. • Page 4
THE KODIAK ECONOMY
Kodiak Economic Model Output
To describe the Kodiak economy, an export -base model is used (Table 2). The
model reflects economic conditions as of 2001, though commercial fishing
employment is based on 2000 data. The model shows the relationship between the
basic and support sectors of the economy, and provides a baseline against which to
gauge the broader impacts of changes in Kodiak fisheries upon the area's economy.
Basic industry exports goods and services to markets outside the local area and
brings in new money in exchange. Support industry serves the local population and
business community, as residents trade existing dollars with their neighbors. Alaska
Department of Labor (ADOL) published seafood processing employment data was
inaccurate in 2001 due to over -counting of local employment and payroll with
Trident Seafoods, according to ADOL. Therefore, employment estimates from 2000
were used from this employer. Discussions with Trident officials indicate that
employment in 2000 and 2001 were similar.
Kodiak's "Economic Engines" — The Basic Economy
Kodiak's economic base industries include commercial fishing, seafood processing,
and tourism, as well as agencies that manage base industries, such as the Alaska
Department of Fish and Game and the National Marine Fisheries Service. The US
Coast Guard is also a base industry. The remainder of the local economy consists of
support industries that service the local population and business community.
Kodiak's basic industries account for an annual average of about 4,250 jobs and a
payroll of $146 million (Table 2 and Figure 1). This makes up 55 percent of Kodiak's
total employment and 60 percent of total payroll. In terms of employment, the most
important basic industries in Kodiak are the seafood industry, the Coast Guard,
tourism, heavy construction, and lumber and wood products.
The seafood industry is the largest industry in Kodiak. Annual average employment
for Kodiak commercial fishermen was an estimated 946 jobs in 2000, about the same
as 1999. Estimated employment in the processing industry declined by almost 500
jobs from 2000 to 2002. Three processors — Global Seafoods, Alaska Salmon Packers
and Cook Inlet Processing - closed in the last year.
Basic industry government employment was about the same in 2001 as in 1999 at
about 140 jobs. Altogether, the seafood industry accounted for over 2,700 jobs,
contributing approximately 64 percent of Kodiak's economic base employment, 35
percent of total employment and 39 percent of total payroll. A similar share (over 60
percent) of Kodiak's support industries (trade, services, etc.) are attributed to the
dominant seafood industry.
Economic Impacts from Fishing Restrictions on the Kodiak Economy McDowell Group, Inc. • rage 0
Table 2. Kodiak Base and Support Industries, Employment and Payroll, 20011
Sector AnnualAve. % of Total Total Payroll % of Total
.. ployment ($M;Ifions)) Payroll
BASIC INDUSTRY
Seafood
Seafood Harvesting2
946
Processing'
1,622
Alaska Dept. of Fish and Game
78
National Marine Fisheries Service
29
Kodiak National Wildlife Refuge
Fishery Industrial Technology Center
20
<1%
$0.8
<1%
Total Seafood
2,712
35%
$95.0
39%
Alaska Aerospace De- Corp.
6
<1%
Tourism4
242
3%
°
National Interest
Coast Guard'
1,100
Agriculture, Forestry and Manufacturing
Agricultural services
18
<1%
$0.2
<t%
Forestry
4
<1%
$0.2
<1%
Fishing, hunting & trapping
40
<1%
$2 9
1%
Lumber & wood products
43
1%
$1.7
1%
Apparel & other textile products°
8
<1%
$0.1
<1%
Heavy Construction
82
1%
$5.5
2%
Total Basic Industry
4,255
55%
$145.0
60%
SUPPORTINDUSTRY
OtherConstruction
85
1%
$2.9
1%
Transportation, Comm., Util. (TCU)
228
3%
$7.6
3%
Wholesale and Retail Trade
818
10%
$15 9
7%
Finance, Ins. and Real Estate (FIRE)
169
2%
$5.8
2%
Manufacturing-printing4
25
<1%
$0.2
<1%
Services
1,076
14%
$28.8
12%
Federal Governments
162
2%
$8.0
3%
State Government'
136
2%
$5.4
2%
Local Government
781
10%
$22.4
9%
Total Support Industry
3,480
45%
$96.9
400'°
TOTAL ALL INDUSTRIES
so c
7,735
100%
$242.0
100%
urce. ompded by McDowell Group, Inc., based on Alaska Department of Labor & Workforce Development data except where noted.
1 Data for federal and state government, including Kodiak National Wildlife Refuge, National Marine Fisheries Service, and Alaska Departmen
of Fish and Game, are for 2000.
2 Seafood harvesting employment and income are McDowell Group, Inc. estimates, based on CFEC permit data and are for 2000.
3 Processing employment from Department of Labor includes both catcher -processor vessels based in Kodiak and shore based processing
Employment and payroll figures from the published ADOL data were adjusted down to account for inaccuracies in Trident Seafom
employment figures.
4 McDowell Group, Inc. estimates.
5 Information from Kodiak Island Borough Website.
6 Federal government employment, less National Marine Fisheries Service and Kodiak National Wildlife Refuge positions.
7 State government employment, less ADFG, FITC, and AADC positions.
onNacis uum rtsnmg nesincuons on me Kodiak Economy McDowell Group, Inc. • Page 6
The Coast Guard is Kodiak's second largest basic industry, accounting for about 26
percent of the basic economy employment. Tourism, timber industry, hatcheries,
heavy construction and manufacturing make up the balance of Kodiak's basic
industry.
Figure 1
Kodiak's Basic Industry Composition, 2001
of annual
Heavy Construction (20/6)
Coast Guard (2f
Manufacturing (3%)
Tourism (60,
Seafood Management (3%)
i Processing (380/)
Seafood: 64%
seat000 rmrvesnng t22%)
Source. McDowell Group and Alaska Department of labor
Seafood Management employment includes Alaska Dept of Fish and Game, National Marine Fisheries Service, Kodiak
National Wildlife Refuge, Fisheries Industrial Technology Center, and the Kodiak Fisheries Research Center Campus.
Alaska Aerospace jobs are not depicted in this chart, as they account for less than 1 percent of basic employment.
Impacts from Fishing Restrictions on the Kodiak Economy McDowell Group, Inc. • Page
Kodiak's Support Industries
Support businesses do not create new wealth for the community. However, money
brought to the economy by basic industries, such as fishing income, impacts the local
economy in many ways as it cycles through support businesses. Local support
businesses are important in that they keep money in the local economy.
Kodiak support industries account for an annual average of almost 3,500 jobs and
$97 million in payroll (Table 2 and Figure 2). Support industries provide 45 percent
of total employment and 40 percent of total earnings. Support industries linked
directly to fisheries include a wide array of businesses, including boat yards, fuel
sales, engine mechanics, electricians, freight forwarding, hydraulic service, air taxi,
accounting, banking and shipwrights. An estimated 60 percent of Kodiak's support
industries are the result of the seafood industry.
In order of employment, the most important support industries in Kodiak are
services; government; trade; transportation, communication and utilities (TCU);
finance, insurance and real estate (FIRE); construction; and support manufacturing
such as printing.
Figure 2
Kodiak's Support Industry Composition, 2001
(Percent of annual average support industry employment)
Construction (20/6)
Trade (24%)
FIRE (5%
wernment (22%)
State Government (4%)
Federal Government (50/6)
Source: McDowell Group and Alaska Department of Labor
FIRE: Finance, Insurance, and Real Estate
TCU: Transportation, Communications, Utilities
Manufacturing jobs are not depicted in this chart, as they account for less than 1 percent of basic employment.
Economic Impacts from Fishing Restrictions on the Kodiak Economy McDowell Group, Inc. • Page
THE KODIAK SEAFOOD INDUSTRY
Seafood Harvesting
Recent Trends in Fisheries Important to Kodiak
The most important fisheries in terms of ex -vessel value to the Kodiak fleet in recent
years are groundfish, halibut, salmon and crab.
Most of the Kodiak groundfish fleet fish for cod and pollock in the Gulf of Alaska
(excluding West Yakutat and Southeast areas). In 2000 and 2001, about 30 thousand
metric tons of fish of the available quota were not harvested due primarily to Stellar
sealion conservation programs, which closed areas traditionally fished by the Kodiak
fleet. The estimated 2002 harvest was about 5,000 tons shy of the quota as of
November 2002 (Table 3).
Table 3
Pollock and Cod Quota and Harvest
Central and Western Gulf of Alaska, 1999-2002
Thousands of Round Metric Tons
Source: National Marine Fisheries service. 2002 data is catch through November 2002.
Halibut is the second most valuable fishery to the Kodiak fleet, and one of the most
consistent in recent years. Halibut prices have generally exceeded $2 per pound
since 1999. Most Kodiak vessels fish in Pacific Halibut Regulatory Areas 3A and 313,
where the estimated ex -vessel value averaged about $78 million from 1999 to 2002
(Table 4).
Table 4
Commercial Halibut Harvest in Areas 3A and 3B, 1999-2002
Millions of Pounds and Dollars
source: National Marine Fisheries service and Alaska Department of Fish and Game.
2002 catch represents the annual quota.
Economic Impacts from Fishing Restrictions on the Kodiak Economy McDowell Group, Inc. • Page 9
The Kodiak salmon fishery represents the third most valuable fishery to the Kodiak
fleet. From 1999 to 2002, the commercial salmon harvest ranged from 62 to 94
million pounds. The salmon fishery value, however, plummeted to a preliminary
total of just $12 million in 2002 due to low prices for pink and sockeye salmon, the
primary species harvested by the Kodiak fleet (Table 5). Preliminary information
indicates that the number of permits fished in the Kodiak region declined from 354
in 2001 to 242 in 2002, a decline of 32 percent.
Table 5
Kodiak Area Commercial Salmon Harvest, 1999-2002
Millions of Pounds and Dollars
Year
Ex
-vessel Catch
Ex -vessel Value
L'�11�111'IR���Ts�
■
Kodiak's commercial crab fleet derives most of its income from the Bristol Bay king
crab and Bering Sea opilio fisheries. Catch in these two fisheries ranged from 205
million pounds in 1999 to 34 million pounds in 2001 and 2002. Value ranged from
$261 million in 1999 to $81 million in 2001 (Table 6). Most of the decline was due to
the Bering Sea opilio fishery, which declined from 194 million pounds worth $190
million in 1999 to just 25 million pounds worth about $40 million in both 2001 and
2002.
Table 6
Commercial Crab Harvest in the Bering Sea Opilio and
Bristol Bay King Crab Fisheries, 1999-2002
Millions of Pounds and Dollars
1999 1
194
11
$261
2000
34
8
101
2001
25
9
81
2002
25
9
94
Source: Alaska Department of Fish and Game
Trends for Kodiak Resident Fishermen
Permit and earnings data by community of residence were available through 2000
from CFEC.
In 2000, 594 Kodiak Island Borough residents participated in commercial fishing as
permit holders, fishing a total of 1,063 permits (Table 7). This was an increase of
both permit holders and permits fished from 1999.
Additionally, 1,178 crew member licenses were sold to Kodiak residents in 2000, a
decline of 13 licenses from 1999. Permit holders who work as crew are not included
in this crew total.
Economic Impacts from Fishing Restrictions on the Kodiak Economy McDowell Group, Inc. • Page 10
Nearly one in five of Kodiak's 9,400 adult residents participated in commercial fish
harvesting as a permit holder or crew member during 2000, a total of 1,770
individuals.
Table 7
Kodiak Resident Harvest and Earnings, 1995-2000
Permit Holders
Permits
Landings
Gross Earnings
Gross Earnings
Year
Fishing
Fished
(Millions of
Pounds)
(Millions of
Dollars)
Per Permit Holder
source: Alaska Commercial Fisheries Entry Commission
During 2000, Kodiak permit holders landed 220 million pounds of seafood, a 16
percent decline from 1999. Earnings were $90 million, a decline of 21 percent from
1999. Most of the overall decline from 1999 was due to a $21 million decline in the
value of crab and $8 million decline in the value of salmon (Table 8).
Ranked by Kodiak resident permit holders' income, groundfish fisheries accounted
for the highest value in 2000 ($28 million), followed by halibut ($27 million), salmon
($16 million), crab ($12 million), sablefish ($4 million), herring ($2 million), and all
other fisheries combined ($1 million, Table 8).
Table 8
Kodiak Resident Earnings by Fishery, 1995-2000
Millions of Dollars
$24
$17
$19
$22
$33
000
$12
39
33
36
19
29
28
5
5
5
4
3
4
r
12
14
21
12
22
27
6
7
2
2
2
2
33
18
14
22
24
16
1
2
1
1
1
1
Total
j $119
$98
$98
$82
$115
$90
Source: Alaska Commercial Fisheries Entry Commission
The top five gear types and fisheries for Kodiak resident harvesters were groundfish
otter trawl ($16 million), large vessel halibut longline ($15 million), small boat
halibut longline ($12 million), salmon purse seining ($9 million) and tanner crab pot
gear ($8 million). The highest level of participation in terms of permits fished were
in the groundfish fisheries (311 permits), followed by salmon (292), and halibut
(261)(Table 9).
Economic Impacts from Fishing Restrictions on the Kodiak Economy McDowell Group, Inc. • Page 11
Table 9
Kodiak Resident Commercial Fishing Permits
Landings and Earnings. 20001
Permit
..-
Fishery
Dungeness Crab>60'vessel
Permts
Fished
6
.
�
PoundsI Data
Farnings EarningsD09J
1 73,000 1 $121,000 1 $20,000 1 Actual
D 91J
Dungeness Crab < 60' vessel
5
91.000' Ilao0o $32,000 Fishery Avg.
K 91T
Bristol Bay King Crab, > 60'vessel
34
889,000 $4,294,000 $126,000 Actual
K 09T
King Crab, Pot Gear, < 60' vessel
1
11,000 5 0 $51.000 Fishery Avg.
K 91 K
King Crab, Pot Gear, > 60' vessel
1
Data not available due to State confidentiality standards
T 91Q
Tanner Crab > 60' Vessel, Bering S.
35
4,043,0001
$7,557,000
1 $216,000
1 Actual
T 91 QD
I King Crab Bering S. CDO
1
Data not available due to State confidentiality standards
Total Crab
83
5,229,00C
$12,390,000
$149,000
Actual
C 068
Sablefish Longline < 60' (NOT SE
OR PWS)
22
1,153,000
$2,423,000
$110,000
Actual
C61B
Sablefish Longline > 60'vessel
statewide
20
898,000
$1,973,000
$99,000
Actual
Total Sablefish
42
2,051,000
$4,396,000
$209,000
Actual
126E
Ling Cod Mechanical Jig
1
2 600
$1.70
$1,700
Fishery Avg.-
* 05B
Misc. Finfish Hand Troll
9
61,000
$25,000
$2,700
Actual
M 068
Misc. Finfish Longline, < 60'
50
3,826,000
$1,502,000
$30,000
Actual
M 07B
Misc. Finfish Otter Trawl
33
119,665,000
$16,284,000
$493,000
Actual
M 09B
Misc. Finfish Pot Gear, < 60' vessel
56
9,780,000
$3,467,000
$62,000
Actual
M 26B
Misc. Finfish Mechanical Jig
98
1,613,000
$640.000
$6,500
Actual
M61B
Misc. Finfish Longline, >60'
8
1,357,000
$541,000
$68,000
Actual
M 91B
Misc. Finfish Pot Gear, >60'
56
14,722,000
$5,054,000
$90,000
Actual
Total Groundfish
311
151,026,000
$27,514.000
$88,000
Actual
B 26B
Halibut Mechanical Jig
16
33,000
74,000
$4,600
Actual
B O6B
Halibut Longline Vessel < 60'
154
4,917,000
$12,136,000
$79,000
Actual
B 61 B
Halibut Longline > 60'
91
5,887,000
$14,512,000
$159,000
Actual
Total Halibut
261
10,837,000
$26,722,000
$102,000
Actual
G 01A
Roe Herring Purse Seine
1
187,000
$54.000
$54,000
Fishery Avg.
G 01 K
Roe Herring, Purse Seine, Kodiak
13
1,677,000
$582,000
$45.000
Fishery Avg.
G 01T
Roe Herring, Purse Seine, Bristol By.
18
4,383,000
$412,000
$23,000
Actual
G 34K
Roe Herring, Gill Net, Kodiak
6
108,000
$3LM
$5.100
Fishery Avg.
G 34T
Roe Herring, Gill Net, Bristol Bay
1
5.800
$900
Fishery Avg.
H 01 M
Herring Food/Bait Purse Seine,
Peninsula/Aleutians
3
604,000
$121,000
$40,000
Fishery Avg.
Total Herring
43
9,643,000
;1,517,000
;35,000
Actual
t r ame > commuea next page)
Source: Alaska Commercial Fisheries Entry Commission
1. Some data was confidential. For these gear groups, fishery average harvest and earnings were used. These estimates are denoted as
underlined. Totals may not reflect sums of column items because although data for some fisheries was confidential, the totals by
species groupings were available except for groundfish, where the sum of CFEC and Fishery averages was used.
t:conomic impacts trom t-Ishing Restrictions on the Kodiak Economy McDowell Group, Inc. • Page 12
Table 9 (continued)
Kodiak Resident Commercial Fishing Permits
Landings and Earnings, 20001
Permit
Code
S 01A
Salmon Purse Seine Southeast
Permits
3
Pounds Gross Avg. Gross Data
1,211,000 1 $108,000 1 Fishery Avg.
S 01K
Salmon Purse Seine Kodiak
131
28,871,000 $9,391.000
$72,000 Actual
S 01 L
Salmon Purse Seine Chignik
11
1 86.4 000 $1.403. 00
1128 000 Fishery Avg.
S 02K
Salmon Beach Seine, Kodiak
2
Data not available due to State confidentiality standards
S 03E
Salmon Drift Gillnet, PWS
4
99,000
$109,000
$27,000
Actual
S 03H
Salmon Drift Gillnet, Cook Inlet
6
83,000
$54,000
$9,000
Actual
S 03M
Salmon Drift Gillnet,
Peninsula/Aleutians
4
374,000
$311,000
$78,000
Actual
S 03T
Salmon Drift Gillnet, Bristol Bay
25
1,421,000
$940,000
$38,000
Actual
S 04K
Salmon Set Gillnet, Kodiak
94
6,908,000
$3,595,000
$38,000
Actual
S 04T
Salmon Set Gillnet, Bristol Bay
11
275,000
1 $181,000
$16,000
Actual
S 04W
Salmon Gillnet, Kuskokwim
1
6.0001
$2,000
$2,000
Fishery Avg.
Total Salmon - -
292
- 41,056,000
$16,112,000
$55,000
Actual
O 09B
Octopus/Squ t Pot < 60' Vessel
17
85,0001
$31,000
$2,000
Actual
O 91 B
Octopus/Squid Pot > 60' Vessel
3
4 200
$1.600
500
Fishery Avg.
Q 11 B
Sea Cucumber Diving
7
40,0001
$57,000
1 $8,000
Actual
U 11 B
Sea Urchin Diving
3
Data not available due to State confidentiality standards
22B
Scallop Dredge
1
0 0
71.000 9;281.000 Fishery Avg.
Total Other Shellflah
TOTAL•r
31
1.3
38t3, $1,050,000 534,000 Actual
220t11 trr $90,000,000 $85,000
Source: Alaska Commercial Fisheries Entry Commission.
1. Some data was confidential. For these gears, fishery average harvest and earnings were used. These estimates are denoted as
underlined italics. Totals may not reflect sums of column items because although data for some fisheries was confidential, the totals by
spedes groupings were available except for groundfish, where the sum of CFEC and fishery averages was used.
2000 Kodiak Seafood Harvesting Employment and Earnings Estimates
McDowell Group updated the 1999 employment and payroll estimates with 2000
data from CFEC. This is the most recent year of complete data, according to CFEC.
These estimates of annual average employment and take-home pay of Kodiak -based
skippers and crew are essential because most government reports do not include
employment or personal income from seafood harvesting, Kodiak's most important
industry. The source for all other employment data, the Alaska Department of
Labor, expresses employment in annual average 12-month equivalents. Harvesting
employment estimates use this method to be comparable.
Following the methods used in McDowell Group's 1989 Alaska Seafood Industry
Study, the study team considered the preparation and fishing time and assigned
months of participation to each fishery. Typical crew sizes were assumed for various
size vessels. Net earnings as a percent of gross fishery earnings were estimated. The
effects of the same vessels and crews being used for different fisheries were
considered. Finally, the assumption was made that Kodiak vessels were crewed
primarily by Kodiak residents. The result was about 946 seafood harvesting jobs and
Economic Impacts from Fishing Restrictions on the Kodiak Economy McDowell Group, Inc. • Page 13
$49 million in skipper and crew personal income, comparable to 12-month land -
based salaries and wages (Table 10).
Groundfish and salmon fisheries are the leading employers, with groundfish
providing 364 annual average jobs and salmon providing 318 jobs. IFQ holders
fishing for halibut provide another 158 jobs, with sablefish, crab, herring and other
species combining for about 106 jobs.
Table 10
Kodiak Seafood Harvesting By Fishery
Employment and Earnings Estimates, 2000
Fishery
Crab
Permits Fished
83
AverageGros,
Annual
Jobs
32
Earnings
D.
$12
Estimated
Payroll
Dollars)
$7
Groundfish
311
364
28
14
Sablefish
42
28
4
2
Halibut
261
158
27
17
Herring
43
34
1
0.6
Salmon
292
318
16
8
Other
31
12
0.4
0.2
Total
1,063
946
$90
$49
Source: Permits fished and gross earnings, Commercial Fisheries Entry Commission. Annual employment and
estimated payroll are estimates by McDowell Group, Inc., based on standard crew sizes, months of participation in
each fishery, and study team estimates of net "take-home pay" by skippers and crew. Sum of column values may not
add due to rounding.
Economic Impacts from Fishing Restrictions on the Kodiak Economy McDowell Group, Inc. • Page 14
Seafood Processing
Kodiak is a major seafood port, consistently ranking among America's top three
seafood ports in terms of ex -vessel value. Kodiak processors processed an average
of over 300 million pounds of seafood worth an average ex -vessel value of $88
million a year between 1997 and 2001 (Tables 11 and 12). Total groundfish volume
has declined over the past 4 years due to declining harvests.
Table 11
Ex -Vessel Landings of Seafood at Kodiak, 1997-2001
(Millions of Pounds)
Speciesttr
Crab
2001
Bering Sea Snow Crab
0.1
0.4
0.3
1.5
0.4
0.5
Dungeness Crab
0.6
0.5
0.6
0.3
0.2
0.4
Bristol Bay King Crab
0.4
0.3
0.5
0.9
0.8
0.6
Total Crab
1.1
1.2
1.4
2.7
1A
1.5
Groundflsh
Pollock
83.3
165.8
1 130.5
1 102.2
90.81
114.5
Pacific Cod
73.1
72.0
85.0
64.9
54.7
69.9
Flatfish
19.8
13.7
8.3
14.8
15.1
14.3
Pacific Ocean Perch
4.8
5.4
5.6
9.0
9.0
6.8
Rockfish
3.0
6.3
8.1
9.2
6.5
6.6
Black Rockfish
0.2
0.2
0.1
0.3
0.2
0.2
Total Groundflsh
184.2
263.4
237.6
200.4
176.3
212.3
Sablefish
3.9
1 3.6
1 3.2
3.4
2.2
3.3
Salmon
57.8
105.6
70.5
61.8
78.8
74.9
Halibut
11.0
9.1
9.9
9.3
8.5
9.6
Other Species
Herring
8.0
4.9
3.3
2.7
3.1
4.4
Scallops
0.4
0.4
0.3
0.3
NA
0.4
Sea Cucumbers
0.1
0.1
0.2
0.1
0.2
0.1
Octopus
1 0.2
1 0.3
0.3
0.2
NA
0.3
Total Other Species
1 8.7
1 5.7
4.1
3.31
3.3
5.0
TOTAL ALL SPECIES
1 267.01
388.6
326.7
281.0
1 270.5
306.7
(Note: Totals may not reflect exact summation of columns due to rounding)
Source: Alaska Department of Fish and Game and Kodiak Island Borough
Economic Impacts from Fishing Restrictions on the Kodiak Economy McDowell Group, Inc. • Page 15
Pollock and Pacific cod alone account for about 60 percent of volume and 34 percent
of value of seafood processed in Kodiak. The 2001 season marked the third annual
decline in groundfish landings to Kodiak processors. Halibut landings to Kodiak
processors have also steadily declined as increasing numbers of fishermen land their
fish at Homer or Seward, where prices are higher. Salmon value has declined every
year since 1998, and preliminary 2002 data indicates a fourth consecutive year of
decline. Crab value landed in Kodiak increased annually from 1998 to 2001.
Table 12
Ex -Vessel Value of Seafood Landings at Kodiak, 1997-2001
(Millions of Dollars)
Species
Crab
1997
1998
1999
000
2001
Bering Sea Opilio Crab
$0.5
$0.1
$0.2
$1.3
$0.6
$0.5
Dungeness Crab
1.3
0.7
0.9
0.4
0.4
0.7
Bristol Bay King Crab
1.3
1.2
1.7
1.7
3.9
2.0
Total Crab
3.1
2.0
2.8
3.4
4.9
3.2
Groundfish
Pollock
8.1
11.6
13.1
8.7
12.7
10.8
Pacific Cod
15.5
13.7
25.5
24.0
15.9
18.9
Flatfish
3.5
2.2
1.3
2.7
2.9
2.5
Pacific Ocean Perch
0.2
0.4
0.5
0.7
0.4
0.4
Rockfish
0.4
0.6
0.7
0.6
0.5
0.6
Black Rockfish
0.1
0.1
0.1
0.1
0.1
0.1
Total Groundfish
27.8
28.6
41.2
36.8
32.5
33.4
Sablefish
8.0
5.2
5.7
7.0
6.9
6.6
Salmon
18.8
29.8
31.1
21.5
18.8
24.0
Halibut
21.0
10.0
20.6
23.1
16.2
18.2
Other Species
Herring
1.3
0.7
0.8
0.7
0.9
0.9
Scallops
2.6 1
2.6
1.7
1.7
NA
2.2
Sea Cucumbers
0.2
0.2
0.1
0.2
0.3
0.2
Octopus
0.1
0.2
0.1
0.1
NA
0.1
Total Other Species
4.2
3.7
2.7
2.7
1.2
2.9
TOTAL ALL SPECIES
$82.9
$79.3
$103.9
$94.5
$80.51
$88.3
Source: Alaska Department of Fish and Came and Kodiak Island Borough
Economic Impacts from Fishing Restrictions on the Kodiak Economy McDowell Group, Inc. • Page 16
Groundfish is the mainstay of Kodiak's processing industry, averaging 69 percent of
volume and 38 percent of value from 1997 to 2001 (Tables 13 and 14). Salmon is
second in both volume (24 percent) and value (27 percent). Halibut accounts for 3
percent of volume and 20 percent of value, with sablefish accounting for 1 percent of
volume and 8 percent of value.
Table 13
Seafood Landings at Kodiak, 1997-2001
Percent of Ex -Vessel Volume by Species
Groundfish
1997
69%
1998
68%
1999
73%
2000Species
71%
2001
65%
Average
69%
Salmon
22
27
22
22
29
24
Halibut
4
2
3
3
3
3
Herring
3
1
1
1
1
1
Sablefish
1
1
1
1
1
1
Crab
<t
<1
<1
1
1
1
Other
<1
I <1
<1
J <1
I <1
<1
Total
100%
1 100%
J 100%
1 100%
1 100%
100%
source: Alaska Department of Fish and Game and Kodiak Island Borough
Even as the volume of groundfish processed in Kodiak has declined in recent years,
the general decline in salmon value from 1997 to 2001 has increased the importance
of groundfish as a percentage of total value processed.
Table 14
Seafood Landings at Kodiak, 1997-2001
Percent of Ex -Vessel Value by Species
Groundfish
1997
34%
1998
36%
1999
40%
2000Species
39%
2001
40%
Average
38%
Salmon
23
38
30
23
23
27
Halibut
25
13
20
24
20
20
Herring
2
1
1
1
1
1
Sablefish
10
7
5
7
9
8
Crab
4
3
3
4
6
4
Other
3
4
2
2
<1
2
Total
100%
100%
100%
100%
100%
100%
source: Alaska Departrnent of Fish and Game and Kodiak Island Borough
Economic Impacts from Fishing Restrictions on the Kodiak Economy McDowell Group, Inc. Page 17
Kodiak's processors rely heavily on groundfish as their largest volume of fish
processed. Six processors (4 large and 2 small) who represent most of the processing
capacity in Kodiak were interviewed for their relative volume of fish processed. All
processors except one depend on groundfish for at least two-thirds of their volume
(Table 15).
Table 15
Volume of Seafood Processed by Kodiak Processors, 2001
(% of Total Annual Volume)
Processor
1
Groundfish
65%
Crab
1%
Halibut
3%
Sablefish
1%
Herring
15%
Salmon
15%
Total
100%
2
70%
1%
4%
2%
23%
100%
3
85%
1%
3%
1%
10%
100%
4
100%
100%
5
88%
12%
100%
6
45%
40%
15%
100%
Source: McDowell Group, Inc. executive interviews with processor executives. Processors 1 through 4 are large processors
(employment > 100), and processors 5 and 6 small processors (employment <50).
Traditionally, Pacific cod and Pollock are processed throughout most of the year.
Reduced groundfish quotas after 1999 lowered the percentage of groundfish volume
processed in the summer months. Even more important is the loss of groundfish
processed from November through January, months when virtually no other species
are processed in any substantial volume (Figure 3). Although groundfish may be
lower in value per pound than other species, the large volume processed and the
operation of the fishery in months when other species are not harvested are key to
attracting and maintaining a local workforce in Kodiak
Salmon and herring are processed during May through September. Halibut and
sablefish are processed March through November, and rockfish processing peaks in
July and August.
Economic Impacts from Fishing Restrictions on the Kodiak Economy McDowell Group, Inc. • Page 18
Figure 3
Volume of Seafood Processed in Kodiak, by Month, 1999 and 2001
■■wMEN
■i=
101I■■■
.
E�7�1■■■
11000
�1lll■E"
11
1 1 IEEE
Source: Alaska Department of Fish and Game
Processing Employment
Unlike other areas of the state (Bristol Bay, for example) where processing plants
operate seasonally and must import most of their workforce from outside Alaska,
Kodiak's year-round processing operations traditionally provide adequate
employment and wages to enable most of the processing labor force to live in
Kodiak year-round. This, however, may be changing.
A total of 14 shore -based processors operated in the Kodiak Island Borough in 2001.
In 2002, three of the 10 largest processors --Global Seafoods, Cook Inlet Processing,
and Kodiak Salmon Packers — closed their plants, as did Kodiak Seafood Processing.
Department of Labor (DOL) Statistics show that processing employment increased
from 1999 to 2000 and declined in 2001. To assess the impacts of the recent plant
closures, the study team examined DOL employment data for the first half (January
— June) of 2000, 2001 and 2002, and made estimates of employment for 2002 based on
known plant closures (Table 16). Estimated employment for Kodiak shore -based
processors will likely dip below 1,000 jobs in 2002.
Interviews with processors indicate that most of their workforce is still based in
Kodiak. However, as mentioned earlier, more off -island labor is being used during
Impacts from Fishing Restrictions on the Kodiak Economy McDowell Group, Inc. • Page 19
peak processing periods because resident processing workers are leaving Kodiak
due to lack of work from lower groundfish volume.
Table 16
Annual Average Employment by Kodiak Shore -based Processors,
1999 to 2001
Processor
Ocean Beauty Seafoods
1999
337
err
338
2001
342
2002
206
Trident Seafoods Corporation
100
184
184
188
Cook Inlet Processing (Polar Equipment)
206
228
191
1
North Pacific Processors
218
198
222
182
True World Foods (formerly International
Seafoods)
208
147
126
157
Global Seafoods Kodiak LLC
7
137
74
1
Western Alaska Fisheries
137
110
126
133
Alaska Fresh Seafood
36
41
38
40
Kodiak Salmon Packers
21
29
28
1
Kodiak Fishmeal Company
17
16
17
17
Wards Cove Packing Company
3
14
20
9
Island Seafoods
6
9
13
44
Kodiak Seafood Processing
15
4
3
1
Kodiak Smoking & Processing
3
3
6
6
Total
1,314
1,458
1,387
985
Source: Department of Labor and McDowell Group Estimates
Economic Impacts from Fishing Restrictions on the Kodiak Economy McDowell Group, Inc. • Page 20
Kodiak Raw Fish Tax Revenue
Alaska's statewide landing and fisheries business taxes apply to seafood landed in
each community and borough for processing. A portion of these proceeds is
returned by the state to the community and the borough. The taxes received by the
Kodiak Island Borough (KIB) in a given fiscal year reflect fisheries revenue from two
years prior. For example, the 2002 taxes received by the KIB from the state reflect
fisheries taxes collected by the state in 2000.
Payments received in FY 2003 show a sharp decline from FY 2002 payments (Table
17). Payments for FY 2004 are expected to be even lower given the continued decline
of groundfish and salmon value during the 2002 fishing season.
Table 17
Shared Fisheries Tax Received by the Kodiak Island Borough,
FY 1999 - 2002
Source: Dept. of Revenue annual reports on shared taxes.
Economic Impacts from Fishing Restrictions on the Kodiak Economy McDowell Group, Inc. • Page 21