Market Structure Alaska Seafood Processing Industry
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AKU-T-79-004 C. 3 MARKET STRUCTURE uf the ALASKA SEAFOOD PROCESSING INDUSTRY by V. L. Orth 3. A. Richardson S. Mj. Piddle I! niver~ity of Alack t gaea ~rant Report 7H - 10 Bee entber 1979 Alaska Sea Grant Program University of Alaska Fairbanks, Alaska 99701 MARKET STRUCTURE OF THE ALASKA SEAFOOD PROCESSING INDUSTRY Volume I Shellfish by Franklin L. Orth James A. Richardson Sandra M. Pidde Sea Grant Report 78-10 November 1979 CONTENTS PAGE FIGURES vij TABLES. ACKNOWLEDGEMENTS. XVi i CHAPTER I. INTRODUCTION Background and Scope of the Study. Data Resources ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ 15 3 Organization. Structural Elements of the UPS. Seafood Processing Industry: A Literature Summary. ~ ~ ~ ~ ~ ~ 7 Alaska Fishing Industry: Regulatory Environment.. 9 Federal 9 State.. 13 CHAPTER II. ECONOMIC STRUCTURE OF THE ALASKA SEAFOOD PROCESSING SECTOR AND DETAILED SHELLFISH PROCESSING INDUSTRIES. ~ 15 Introduction. Structural Parameters of the Alaska Seafood Processing S ector.. ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ 16 Geographic Distribution of Production Facilities........ 16 Aggregate Concentration.. 19 Diversification. 31 Turnover.... 36 Vertical Integration ~ ~ ~ ~ ~ ~ ~ 4 ~ ~ 0 ~ ~ 4 40 Other Company-Specific Information 41 Structural Parameters of Individual Seafood Markets: Shellfish 45 Market Concentration ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ 47 Plant Size Characteristics............ 52 Summary 56 CHAPTER III. THE HISTORY OF THE KING AND TANNER CRAB FISHERIES IN ALASKA 65 Development of the Alaska King Crab Fishery 65 The Foreign Fishery. 65 The U.S. Fishery ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ 72 Development. of the Alaska Tanner Crab Fishery. 76 Foreign Fishery: Japan....... 76 Foreign Fishery: USSR... ~ 77 T he U.S. Fishery 81 CONTENTS continued! PAGE CHAPTER IV. THE CRAB RESOURCE. 83 King Crab. 83 World Catch........... 83 Expansion Potential of the King Crab Fishery............ 87 Tanner Crab 88 Catch and Abundance In Alaska. ~ ~ ~ ~ ~ 88 World Catch. ~ ~~ ~ ~ ~ ~ 92 Expansion Potential of the Tanner Crab Fishery..... 92 Dungeness Crab. 92 CHAPTER V. FISHING GEAR AND PROCESSING METHODS FOR KING AND TANNE R CRAB ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ e ~ ~ ~ ~ ~ ~~ ~ ~ ~ ~ ~ ~ ~ Crab Fishing Gear. 95 Vessels 95 Gear on the Vessel. 98 Pots' ~ ~ ~ 98 Circulating Seawater Tanks.. 100 B uoys........... ~ .... ~ ~ ~ 100 B ait 4 ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ 0 ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ J 4 ~ ~ ~ ~ 101 Fishing the Gear 101 Harvesting Capacity.. 101 Processing ~ ~ ~ ~ ~ ~ ~ ~ ~ 104 Processing Methods... ~ ~ 105 Processing of Crab Meats 105 Processing of Crab Sections Shell Stock!.... 107 New Developments in Crab Processing Methods.. 108 Processing Capacity and Capacity Utilization. 108 Southeastern Alaska.. 111 Prince William Sound. 113 Cook Inlet 113 Kodiak. ~ ~ 115 Westward. 117 CHAPTER VI. THE HISTORY OF THE SHRIMP FISHERY IN ALASKA.......... 121 Foreign Shrimp Fishing in Waters off Alaska. 121 Japanese Shrimp Fishery 121 Soviet Shrimp Fishery.................. 124 U.S. Shrimp Fishery in Alaska............... 125 CHAPTER VII ' THE SHRIMP RESOURCE~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ e ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ 129 Pacific Coast Pandalid Shrimp Fishery 132 World Supply ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ 0 ~ ~ ~ 4 ~ ~ ~ ~ ~ ~ 132 CONTENTS continued! PAGE CHAPTER VIII. FISHING GEAR AND PROCESSING METHODS FOR SHRIMP... 137 Shrimp Fishing Gear...................... 137 Vessels 137 Types of Gear......... ~ ..... 137 On-Board Handling......... ~ 141 Electronic Gear. 141 New Technology............ ~ .......... 142 Harvesting Capacity.................. 142 Processing Methods for Shrimp. 146 Frozen Raw-Whole..................... 146 Frozen Raw-Peeled. ~ .. ~ ....... ~ ....... 148 Frozen Cooked-Blocks/Canned.......... 148 Individual Quick Frozen.............. 148 Canned. 148 Shrimp Processing Capacity and Capacity Ut ilization........ 149 Southeasterne~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ 0 a ~ 149 Cook Inlet. 149 Kodiak ~ ~ ~ ~ 151 Chignik/South Peninsula/Dutch Harbor. 153 CHAPTER IX. ~TING OF ALASKA SHELLFISH ~ ............. ~ .... ~ 155 Marketing of King Crab.............. 155 Marketing of Tanner Crab............ 156 Geographic Distribution.. 158 Market Channels for King and Tanner Crab. 160 Product for Export............. 159 Product for the Domestic Market 159 Import and Export Markets.... ~ . 163 D emand. ~ ~ ~ ~ ~ ~ ' ~~ ~ ~ ~ ~ ~ 166 Prices. ~ ~ ~ 0 ~ ~ 172 Marketing of Shrimp................. 172 Market Channels..... ~ ....... 177 Geographic Distribution..... ~ 177 Import and Export Markets 178 Demand. ~ ~ ~ 178 Pl ices ~ ~ ~ ~ ~ ~ ~ 179 APPENDIX I. REVIE'W OF PROCEDURES FOR DATA FILE REFINEMENTS..... 183 Part I: Resolution of Problems....... 184 Classification of Plants.. 184 Fisherman-Direct Sell............ 185 Custom-Packing.. 185 Recovery and Conversion Factors.. 189 Incomplete Data................ ~ ~ ~ 92~ ~~ ~ 192 Apparent Accuracy of Edited Data File and Published Statistics........... 193 CONTENTS continued! PAGE Part II: Recommendations for Improvements in Alaska's Fisheries Data.......... 197 Catch and Landing Data by Species and Area......... 197 Production Data by Species, Product Form and Area.. 197 Price Series Data by Species and Area.............. 198 Employment Statistics by Area.... 199 APPENDIX II. STRUCTURE OF UNITED STATES SEAFOOD PROCESSING INDUSTRY ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ 201 Part I: Conceptual Framework of Industrial Organization 202 Part II: A Literature Review.......... 206 In't r o due t ion ~ ~ e ~ ~ ~ ~ ~ ~ ~ ~ ~~ ~ ~ 206 Economic Structure of Process Form Sectors......... 206 Overview 206 Fresh Process Form Sector.... 207 Frozen Process Form Sector... 210 Canned Process Form Sector... 213 Cured Process Form Sector 215 S ummary s ~~ ~~ ~i ~ ~ ~~ ~~ ~~ ~~ ~~ ~~ ~ 215 TT ~ Part III. Glossarye~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~~ ~~ ~~ ~~ ~~ ~r ~ ~ 217 APPENDIX III. INDUSTRY SURVEY: SURVEY FORM AND RESPONSES... 221 Part I: Survey Form........... 222 Part II: Survey Responses............. ~ .......... 242 APPENDIX IV. PERIOD 3 976! STRUCTURALPAKVKTERS..... ~ .... 259 FERENCES ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~t s ~ ~ e ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ 283 FIGURES PAGE FIGURE 1 Conceptualization of Market Structure Study.......... FIGURE 2 Landed Weight, Ex-vessel Value and Wholesale Value of Alaska Fisheries 1975.................... ~ .. FIGURE 3 Agencies and Organizations Affecting Alaska Marine Resources Development......................... FIGURE 4 Lorenz Curves for Alaska Seafood Processing Plants... 29 FIGURE 5 Lorenz Curves for Alaska Seafood Processing Companies 30 FIGURE 6 King Crab Catch by Foreign and Domestic Fleets 1953 to 1977. FIGURE 7 King Crab Catch for the Kodiak Registration Area by Fishing Season 1950-51 to 1977-78 75 FIGURE 8 Areas and Catch Quotas for 1973 and 1974 Established for Japanese King and Tanner Crab Fishing in the Eastern Bering Sea by the U.S.-Japan Agreement of December 1972 78 FIGURE 9 Japanese Eastern Bering Sea Crab Quotas and Quota Areas 1975 and 1976............................. 79 FIGURE 10 Tanner Crab Catch by Foreign and Domestic Fleets 1 965 'to 1977 o ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ t ~ a ~ ~ ~ ~ ~ ~ ~ ~~ ~ ~ ~ ~ ~ ~ s ~ ~ ~ ~ ~ 80 FIGURE ll Steps in Processing King and Tanner Crab........... ~ ~ 106 FIGURE 12 Locations of Alaska's Major Shellfish Processing p lantso~ ~ ~ ~ t ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ t ~ ~ t ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ 109 FIGURE 13 Relation Between Alaskan Monthly Tanner Crab, King Crab and Shrimp Catches, All Areas, 1977............. 110 FIGURE 14 Shrimp Catch by Foreign and Domestic Fleets 1960 to 1977 ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ 126 FIGURE 15 Shrimp Catch of Domestic Fleets by Area 1964 to 1977. 127 FIGURE 16 Typical Rigging for a Shrimp Otter Trawl............. 140 FIGURES continued! PAGE FIGURE 17 Double-Rigged Shrimp Trawler 140 FIGURE 18 Flow Chart for Shrimp Processing................... 147 FIGURE 19 Distribution of Alaskan Shellfish Products by Major Centers of Distribution.......... 160 FIGURE 20 Market Channels for Frozen King and Tanner Crab Products ~ ~ ~ ~ ~ ~~ ~ ~ ~ ~ ~ ~ ~ ~ 0 ~ ~ ~ ~ 161 FIGURE 21 Market Channels for Canned Alaskan Shellfish p loductse ~ ~ a ~ s.a~~os.~.s.o.~.e.os..see.~o...e~ee.. 162 FIGURE 2-1 Identification of Firms Utilizing Census Data...... 205 TABLES PAGE TABLE 1 Seafood Processing Plant Count and Harvests by 7 earl ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ 0 ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ TABLE 2 Continuity of Company Operation by Period.......... TABLE 3 Summary of Market Structure Elements of U.S. Sea- food Processing Industry by National and Regional Process Form Sectors.. TABLE 4 Alaska Seafood Processing Production Facilities, Regional Summary by Period. 17 Geographic Distribution of Seafood Processing Plants and Companies by Period.. TABLE 6 Harvest of Finfish and Shellfish by Region......... 20 TABLE 7 Company Frequency Distribution by Number of General Regions and Specific Areas by Period....... TABLE 8 Plant Size Distribution by Region and Period....... 22 TABLE 9 CompanySize Distribution by Region and Period..... 23 TABLE 10 Number of Alaska Seafood Plants Operated by Companies by Period 25 TABLE 11 Size Distribution of Alaska Seafood Plants and Companies by Period....... 26 TABLE 12 Distribution of Production of Alaska Seafood Processing Plants by Percent Category and Period... 27 TABLE 13 Distribution of Production of Alaska Seafood Processing Companies by Percent Category and Period.. 28 TABLE 14 Aggregate Concentration in the Alaska Seafood Processing Sector by Plants and Companiesand by Period.......