Economic Impact of the Seafood Industry in Southcentral Alaska
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June 2015 The Economic Impact of the Seafood Industry in Southcentral Alaska Prepared for Prepared by ALASKA SALMON ALLIANCE Acknowledgements The study team would like to express its appreciation to members of the industry and government agencies who provided valuable information and insight. This project would not have been possible without the input of the individuals and companies listed below. In addition, we received proprietary business information from dozens of fishermen whose names are withheld to protect the confidentiality of their data. Matt Alward – Bulletproof Nets & HMTA Robert Kreiger - State of Alaska (DOLWD) Lamar Ballard - AquaTech Wendy Lawrence - State of Alaska (DCCED) Al Bean - Smoked Alaska Doug Lechner - Shoreside Petroleum Jeff Bentz - NorthStar Stevedore Jean Lee - NMFS Renata Bennett - TOTE Ron Long - City of Seward Joe Britt - TOTE Judd Maguire - Frontier Packaging Jackie Chou - Polar Seafoods Jerry McCune - CDFU Alexis Cooper - CDFU Thane Miller – PWSAC/VFDA George Covell - PWSAC Malcolm Milne – NPFA PJ Cranmar - CFI Tom Neuman - Terrasond Paula Cullenberg - SeaGrant Robert Peterkin - Matti Farms Kit Durnil - Resurrection Bay Sfds. David Polushkin - APFC Ben Eveland - AVTEC Dave Reggiani - PWSAC Gary Fandrei - CIAA Skip Reierson - Shoreside Petroleum Greg Favretto - Favco Tara Reimer - ASLC Katrina Fountain - Trident Seafoods John Renner - CDFU David Franz – Alaska Boat Brokers Charlie Reynolds - Reynolds Marine Mack Funk - City of Seward Stephen Ribuffo - Port of Anchorage Brian Gabriel - City of Kenai Randy Robertson - City of Cordova Kim Garrett - State of Alaska (DOA) Chris Rosauer - AK Smoked Salmon/Seafoods Delbert Henry - Hylite Fabrication Pat Shields – ADF&G Jeff Hetrick - APSH Jennifer Shriver - State of Alaska (ADF&G) Jon Hickman - Silver Bay Seafoods Mike Shupe - Polar Seafoods Zach Hill - NPFA Cassandra Squibb - Copper River Seafoods Jim Holley - AML Hans Vogel - Tri Jet Mfg. John Hozey - City of Valdez Lisa Von Bargen - City of Valdez Gary Johnson - Peter Pan Seafoods Sharen Walsh - Port of Anchorage Jim Kacsh – City of Cordova Jim Wardlow - Alaska Foam Dianne Kinney - City of Valdez Josh Warren - State of Alaska (DOLWD) Lela Klingert - CFAB Trudy Wassel - Ted Stevens Int'l Airport Rick Koch - City of Kenai Mike Wells - VFDA Jan Koslosky - Ocean Beauty Seafoods Skip Winfree - 10th & M Seafoods ALASKA SALMON ALLIANCE STAFF AND BOARD MEMBERS Alaska Salmon Alliance Executive Director: Arni Thomson Board Members and Alaska Salmon Alliance Companies: Paul Dale, Snug Harbor Seafoods, Kenai Duff Hoyt, Icicle Seafoods, Homer Tab Goto, Director, Pacific Star Seafoods, Kenai Roger Stiles, Great Pacific Seafoods, Kenai Erik Huebsch, Driftnet Boat Owner, Kasilof Norm Darch, Setnet Owner, Nikiski Supporting Sponsor Companies: Petro Marine and Alaska Oil Sales TOTE, Northern Air Cargo, Delta Western, and Carlile Transportation Fish Hawk Seafoods, Northrim Bank, Samson Tug and Barge, and Wells Fargo To download this report, please visit www.aksalmonalliance.org. Table of Contents Executive Summary .................................................................................................................. 1 Introduction .............................................................................................................................. 3 Study Purpose and Scope of Work ........................................................................................... 3 Data Sources ............................................................................................................................ 3 Notes about Methodology ....................................................................................................... 4 Abbreviations, Acronyms and Glossary ................................................................................... 6 Regional Economic Impact of the Seafood Industry in Southcentral Alaska ......................... 8 Community Impact Profile: Anchorage/Mat-Su .................................................................... 17 Community Impact Profile: Cordova ..................................................................................... 34 Community Impact Profile: Homer ........................................................................................ 45 Community Impact Profile: Kenai .......................................................................................... 57 Community Impact Profile: Seward ....................................................................................... 70 Community Impact Profile: Valdez ........................................................................................ 83 Scope and Impact of Seafood Shipments .............................................................................. 92 Upper Cook Inlet Salmon Harvest by Regional User Groups ............................................... 94 Appendix: Historical Commercial Fishing Harvest, Earnings, and Employment ................. 95 Executive Summary The Alaska Salmon Alliance commissioned McDowell Group to analyze the economic impact of the commercial seafood industry in Southcentral Alaska and the region’s communities. The scope of work includes analysis of economic impacts associated with commercial fishing, seafood processing, hatchery operations, government functions related to Alaska’s commercial fisheries, and the broad range of businesses and organizations providing goods and services to the state’s seafood industry. Key findings are summarized below. Key Findings • The seafood industry directly employed 10,840 Southcentral Seafood Impacts Snapshot, 2013 people in Southcentral Alaska during 2013. This total includes resident commercial fishermen and Employment processing workers, hatchery employees, and Resident Commercial Fishermen 5,730 commercial fisheries management-related staff Processing Workers 4,590 who worked in the region.1 Hatchery/Mgmt. Workers 520 • Two-thirds of the workforce were year-round Total Direct Workers 10,840 Southcentral residents (7,660 people). Direct FTE Jobs 4,810 Secondary FTE Jobs 3,320 • In addition to these employment figures, Total FTE Jobs 8,130 approximately 1,000 fishermen who were not Labor Income ($Millions) Southcentral residents participated in regional Resident Commercial Fishermen $162 commercial salmon fisheries during 2013. These Processing Workers 61 and other nonresident commercial fishermen are Hatchery/Mgmt. Workers 25 excluded from this report’s employment and Total Direct Labor Income $247 income statistics at a local or regional level. Secondary Labor Income $164 • Direct employment in the Southcentral seafood Total Estimated Labor Income $411 industry is the equivalent of 4,810 full-time (FTE) Note: Totals may not sum due to rounding. Source: McDowell Group estimates, based on ADF&G, jobs. Including secondary (multiplier) impacts, the DOLWD, NMFS, industry interviews, and other primary industry accounted for 8,130 FTE jobs in 2013. sources. • The Southcentral seafood industry accounted for an estimated $247 million in direct labor income during 2013. Multiplier impacts generated an additional $164 million in regional labor income, bringing the total seafood industry-related labor income to $411 million. • Commercial seafood generated $1.2 billion in total economic output in Southcentral Alaska in 2013. This figure includes $685 million in first wholesale value of seafood products and $501 million in gross value added to the region through secondary impacts. 1 The term “resident" refers to individuals who reside in the region year-round, or within a specific community if labeled “local resident.” Economic Impact of the Seafood Industry in Southcentral Alaska McDowell Group, Inc. Page 1 • The seafood industry benefits and is affected by many communities in Southcentral Alaska: o The Anchorage/Mat-Su economy includes $149 million in labor income and 2,880 FTE jobs, as a result of the seafood industry in 2013. o Local economies in Cordova, Homer, and the Kenai region each received more than $50 million in total annual labor income. More than 1,000 FTE jobs in each community/area are linked to the seafood industry. o Both major processors are expanding in Valdez, and Seward is adding new capacity to service large vessels. The community of Whittier, in addition to hosting a processing plant, is a key part of the region’s transportation network. Over 100 million pounds of seafood products passed through Whittier in 2013 destined for Anchorage port facilities or Lower 48 markets. • Southcentral was home to 2,168 active commercial permit holders in 2013, each acting as a small business and having the same impact in the economy as other independent locally-owned businesses. The region has 35 primary seafood processing plants and three non-profit salmon hatchery associations, which enhance pink, keta, coho, and sockeye salmon runs. • A total of 20 Southcentral communities had collective gross fishing earnings exceeding $1 million in 2013. Southcentral resident commercial fishermen grossed a total of $314 million in 2013 (including estimated revenue from tendering fish). • Salmon is the foundation of the region’s seafood industry, accounting for 85 percent of total first wholesale value produced in Southcentral. Sockeye and pink salmon are the most important species in commercial salmon fisheries. • Commercial fisheries in Cook Inlet and Prince William Sound accounted for the majority (57 percent) of gross fishing earnings, but Southcentral residents also have a significant