•1\) REVIEW OF

BUSINESS AND ECONOMIC

CONDITIONS

UNIVERSITY OF ALASKA, INSTITUTE OF BUSINESS, ECONOMIC AND GOVERNMENT RESEARCH NOVEMBER, 1965

pounds. This harvest was more than double any king TheAlaskan King Crab 1·ndustry crab harvest previously taken from that area. The large The Alaskan king cmb industry is the fastest growing increase in the Aleutian Island area's produotion of crab segment of the United States fishing industiy. Over 86 was due to the utilization of additional floa,ting processors million pounds of king crab were caught in AJ.aska's king which were supplied with crab by vessels that had shifted cmb fishery in 1964. Just two decades previously, in 1944, from the Kodiak area. Kodia1<:suffered the loss of several l'he total annual harvest equalled only sl,ightly more than crab-processing facilities when the city was damaged by 15,000 pounds. (See Table I.) the seismic waves genemted by the great Alaskan earth­ The overall growth of the king cmb industry's harvest quake of March 27, 1964. during the last seven years has been a speotacular 674 Despite the seismic wave destruction , and the de­ percent, with increases in the annual catch ranging from pa1,ture of some vessels for the Aleutians, the second 10 to 68 percent. Current statistics indicate that the largest king crab production in 1964 took place in the Alaska king omb catch for 1965 will reach a record 100 Kodiak area, which registered a catch of 29.6 million million pounds. pounds. The area on the sourth side of the Alaska Penin­ sula provided a total harvest of 14.3 miUion pounds of King cmb is becoming an increasingly important part king crab in 1964, while the Cook Inlet production of Alaska's fisheries indushy. In 1960, less than 6 percent equalled 6.9 million pounds . Th e other four areas of of the total wholesale value of fisheries production in Alaska's king crab fishery in 1964 collectively produced Alaska resulted from the kiing crab segment of the indus­ approximately 2.2 million pounds of king crab. try. In 1964, however, king cmb production accounted for over 15 percent of the $140 million wholesale value During 1965 an estimated 50 million pounds of king of Alaska's fisheries production. (See Table II.) crab were taken in the Kodiak area. This was an increase of 67 percent above the 1964 Kodiak landings and about During the six-year period from 1959 to 1964, the 19 percent above the 1963 harvest. Much of the increased wholesale value of the state's king orab produotion has production in th~s area in 1965 apparently resulted from more than quadrupled, moving from $3,850,000 to $21,- the introduction of more efficient gear and vessels, and 262,340. the elimination of the limit on the numbe {· of crab pots The Alaskan king .crab fishe1y is diwded into eight each vessel could fish. In all other areas of Alaska, with general geographic areas. These areas are: Southeastern the exception of the Bering Sea area, the 1965 king crab (ranging from Dixon Entrance on the south to Cape St. harvest ran behind the harvest in 1964. Elias); Prince William Sound; Cook Inlet; Kodiak Mand; Chignik; Alaska Peninsula (south side); Aleutian Islands; HISTORY OF THE ALASKAN KING CRAB INDUSTRY and Alaska Perninsula (north side, including the Bering The Alaskan king crab has been fished commercially Sea). Alaskan king crab are harvested commeroiaily along by three nations - the United States, Japan, and Russia. more than 21,000 ~iles of Alaska's coast. Japan was the first of the three countries to develop an Produotion statistics for the eight areas listed above indushy based on the king orab. indicate that the Aleutian Island area in 1964 led all pro­ The Japanese originally established their king crab duotion areas with an estimated catch of 33.6 miUion fishery in the Sea of Japan in 1892. Dlll'ing this early PAGE 2 UNIVERSITY OF ALASKA, INSTITUTE OF BUSINESS, ECONOMIC AND GOVERNMENT RESEARCH

have been engaged in spirited competition with the ALASKA REVIEW OF BUSINESS AND ECONOMIC CONDITIONS Japanese for king crab, and their production has increased VOL fl NO. 5 each year. In 1963, the Russians employed three factory Published by the ' Institute of Business, Economic and Government Research, ships to process an estimated catch of 2.3 million king University of Alaska, College, Alaska crab. William R. Wood-President, University of Alaska Kenneth M. Rae - Acting Director of the Institute of The Russian king crab fishery operating near Alaska Business, Economic and Government Research in 1964 consisted of three ultramodern faotoryships and ,Leo M. Loll, Jr.-Editor Francis R. Eels-Associate Editor nine tangle net setting trawlers. Each factorvship bmLts .trom which the tangle nets were entire catch was canned at picked. In addition, two scouting trawlern were used shore-based plants. Growth of the industry was slow by the Russ,fans to determine the most productive places until 1923, when the successful development of ,the float­ to set the tangle nets. The Soviet king crab fishery in ing cannery permitted expansion of the fishing operations 1964 opemted in the outer Bristol Bay flats area from away from Japan proper and into the Alaskan waters of near Port :Moller to Unimak Pass from April through the eastern Bering Sea. Shortly thereafter, Japan extend­ July, at which time the fishery left Alaskan waters. ed its king crab exploration into other water immediately Russia harvested king crab from the waters of the adjacent to United States territory. Utilizing floating Sea of Okhotsk and in the Bering Sea off Kamchatka in canneries, ·the Japanese began to harvest king crab in the 1965. Estimated production equalled 420,000 cases, which vicinrty of the Pribilof Islands, along ,the n011thside of the was 42,000 cases above the estimated 1964 production A1asfua Peninsula, and in the Bristol Bay area. level. The annual Japanese :kiing crab pack exceeded 400,- 000 cases by 1930. Beginning as early as 1906, much of UNITED STATES KING CRAB OPERATIONS Japan's king crab output was expmited in canned form United States fishermen began commercial king crab to the United States, and king crab imports from Japan fishing on a small scale in 1920, in Seldovia, Alaska. Only in 1933 exceeded 7 million pounds. a few oases of crab were packed that year, and produc­ The Japanese discontinued king crab fishing during tion in the Ame:11icanking crab industry remained sporadic World War II, but resumed harvesting the crab in the and weak during the next 30 years. A relatively small eastern Bering Sea in 1953. From 1953 to 1959, Japan's amount of king crab was canned during the earlier years annual pack ranged between 60,000 and 70,000 cases. in the three Alaskan communities of Seldovia, Kodiak By 1963, Japan's output had expanded to 235,000 standard and Hoonah. From 1926 to 1934 no commernial canning cases. The entire Japanese catch is processed on factory­ of king crab took place anywhere in the Alaskan Terri­ ships which accompany the fleets of crab-catching ves­ tory. sels. Although both Japan and Russia were using factory­ The Japanese roing crab fleet operating off the coast ships to process king crab during this period, such facili­ of Alaska in 1964 was composed of two foctoryships, ties were not utilized by American king crab processors twelve vessels to set the tangle nets, and about 16 small until 1946. boats to haul and pick the tangle nets. The Japanese The harvesting of king cmb by Amei,icans was pio­ king crab fleet arrived north of the Alaska Peninsula in neered by the operators of small salmon purse seiners. March and remained in that general area until September. These fishermen supplemented their summer income by They harvested enough king crab during this period to fishing for king crab during the winter months when the process 235,000 cases of canned cmb meat. salmon were not running. In this early period the crabs The Russians fost began to fish for filing crab in the were taken only from the areas adjacent to the fisher­ eastern Bering Sea in 1928. They employed two factory men's own villages, because the fishermen lacked the ships and an unknown number of catcher boats during -proper facilities for keeping crabs alive on board their that year and processed 35,000 cases of king crab. By vessels for any substantial length of time. King crab 1930, the Russian fleet had increased to ten vessels. Dur­ must be alive up to the time of processing, and ordinarily ing that year they processed 73,000 cases of king crab. these crustaceans cannot live out of water for more than Russia's annual catch from 1930 to 1939 averaged two and 12 consecutive hours. a quarter million pounds. Larger and more efficient vessels were developed During World War II, the Russians ceased king crab later, fitted with tanks in which crab could be kept alive. fishing in Alaskan waters, but resumed activities in the These vessels enabled the fishermen to harvest crabs eastern Bering Sea in 1959. Since then, the Russians from distances much farther from the processing areas UNIVERSITY OF ALASKA, INSTITUTE OF BUSINESS, ECONOMIC AND GOVERNMENT RESEARCH PAGE 3 without danger of the crabs dying and spoiling before lems of king crab biology and technology, and on the they could be processed. abundance and dist11ilbutionof bhe resource. The objec­ Several factors were responsible for the late develop­ tives of this research were to locate the areas where king ment of the American king crab industry. One primary crab was most abundant and to develop satisfaotory meth­ retarding factor was the hea1l:!hysalmon fishe1y that pro­ ods for taking and processing king crabs. Several Ameri­ vided adequate employment opp01ituniities for Alaska's can vessels were involved in exploratory research during fishem1en during the 1920's and 1930's. The lack of this period and their findings pointed the way toward knowledge of proper crab canning techniques; problems profitable king crab opemtfons in the Cook Inlet, and of qualit y control ; ignorance of the king crab's migratory in the areas around Kodiak Island, along the Alaskan habits; and the ac of equipm en for effectively har ­ eninsu la, and in the Berin g Sea. In a frnither effort to vesting the king crab were other causes of the fishery's assist domestic crab producers dU11ing this perio , the slow groWJtih. Another imp01itant faotor deterring the ad valorem tariff on imported crab meat was increased dev elopment of a U.S. king crab industry was Japanese from 15 percent to 221/z percent in 1941. competition. The Japanese were producing a generally The hostilities of World War II brougiht an unsched­ excellent king crab product and were selling it at a low uled end to king crab research and effectively extin ­ pric e. Under the circumstances American producers guished hopes for a large-soale king crab fishery until were reluctalit to risk the capital required to obtain the 1946. basic information necessary for profitable operation of Immediately a£ter the war , exploratory Icing crab fish­ the fishery. ing was begun in the Bering Sea by Wakef.ield's combina­ '.I'he foreign exploitation of domestic United States tion trawler processor, the Bering Sea. Shortly there­ fishing grounds did not make sense to many Americans after the Cherikof, under charter to Libby, McNeill and and in 1940, President Roosevel,t requested the Secretary Libby, began operating in the smne area. Both proces­ of the Interior to investigate the practicability of estab ­ sors put up experimental packs of frozen king crab, since lishing an American king crab canning industry in Alaskan they felt that frozen crab had the greatest growth po­ waters . In 1940 and 1941, Congress authorized the Fish tential at that time. and Wildlife Service to conduct research on the prob- In 1947 Wakefield 's new boat, the Deep Sea, made TABLE I

ANALYSIS OF VALUE OF KING CRAB CAUGHT AND PROCESSED IN ALASKA 1944 - "964 i 1 (. (,

Average Weight Weight Price Per Raw Crab Average Percent of Crab Value to Pound Paid alter Percent Value of Cost Per Value Per Increase Year Landed Fishermen to Processing Discarded in Proce ssed Crab Pound Pound Alter In Value (in pounds) (in dollars) Fishermen (in pounds) Processing (in dollars) Proces sed Processi ng Added By (in cents) (in cents) (in cents) Processing

1944 15,208 1,238 8.1 3,802 75 3,900 32 .5 102.6 215 1945 N. A. N. A. N. A. N. A. N. A. N.A. N.A. N. A. N.A . 1946 22,600 960 2.9 5,421 76 8, 172 17.7 150.7 762 1947 752,668 31,988 4.2 195,433 74 168,507 16.4 86.2 427 1948 2, 133,354 96,001 4.5 572,107 73 684,260 16.8 119 .6 613 1949 1,206,945 72,4 17 6.0 499, 121 59 272,905 14.5 54.7 277 1950 1,519,249 91,155 6.0 626 ,871 59 630,876 14.5 100 .6 592 1951 1,993,912 227,622 11.4 812,690 59 754,208 28.0 92.8 231 1952 2,772,833 388,197 14.0 618 ,408 78 683,882 62.8 110 .6 76 1953 4,613,209 547,431 11.9 1,272,524 72 1, 171,554 43 .0 92 .l 114 1954 8,871,070 880,465 9.9 N.A . N. A. N.A. N. A. N. A. N.A. 1955 8,162,920 808,654 9.9 2,086,565 74 1,767,923 38.8 84.7 119 1956 8,796,022 864,065 9.8 1,628,603 82 1,566 ,750 53 .l 96.2 81 1957 13,076,565 1,046,125 8.0 3,803,944 71 3,504,601 27.5 92 .1 235 1958 11,211,554 896,924 8.0 3,279,856 71 2,709,813 27 .3 82 .6 202 1959 18,839 ,4 70 1,477,980 7.8 4,317 ,663 77 3,850 ,022 34 .2 89.2 161 1960 28,570 ,016 2,286,136 8.0 5,034,435 82 5,294,866 45.4 105.2 132 1961 43,411,600 3,913,700 9.0 8,549 ,000 80 9,625,500 45 .8 112 .6 146 1962 52,782,120 5,278,210 10.0 10,577,180 80 11,86 1,800 49.9 112.l 125 1963 78,740,240 7,607,360 9.7 16,399,790 79 16,770,640 46 .4 102.3 121 1964 86,720,670 8,186,190 9.4 22,994,390 74 21,262,340 35 .6 92 .5 160

Source: Computed from data obtained from the Alaska State Departme nt of Fish and Gam e. PAGE 4 UNIVERSITY OF ALASKA, INSTITUTE OF BUSINESS, ECONOMIC AND GOVERNMENT RESEARCH

two trips into the Bering Sea for king crab. The Deep The growing king crab industry is contributing in­ Sea was the first U.S. vessel constructed exclusively for creasingly to private employment, personal income and king crab fishing and processing. public revenue in Alaska. Its growth has generated the A new type of operation entered the industry in 1948 need for the construction and staffing of many additional when the Pacific Explorer, a 5,000 ton factoryship, with a processing facilities. Employment in the indush·y extends fleet of 12 chartered oatcher trawlers, came into Alaskan throughout the year and thus helps counteract the drastic waters. The Pacific Explorer canned over 17,000 cases of seasonal fluctuations experienced by some other indushies king orab but the operation was not financially successful in the state . and the vessels did not continue operating in the fishery KING CRABS after 1948. Shore-based canning of king crab began in earnest in The king crab (Paralithodes camtschatica) is a giant 1955 when several large U.S. salmon processors started crustacean found only in the north Pacific Ocean. It has canning the crab . The annual pack, which was only 17,- a sweet lobster-like meat and has become immensely pop­ 000 oases in 1955, reached 100,000 oases by 1960. In 1964, ular as a gourmet food. Perhaps the most spectacular and over 235,000 cases of king crab were canned, with a commercially important feature about the king crab is its wholesale value of nearly $6 million. large size. Mature male king crabs can have an over-all There were 39 shore-based plants or floating factory­ leg spread of six feet and can weigh as much as 25 pounds. ships processing king crab in Alaska in 1964, according King crabs weighing 15 pounds, with a carnpace 91/zinch­ to the Alaska Department of Fish and Game. Twenty­ es wide, are not uncommon in Alaskan waters. nine of these processors were preparing frozen or fresh Male king crabs mature sexually at about five years of king crab for market, and ten were producing canned age but generally are not large enough to be legally har­ crab. Approximately 79 percent of the king crab prepared vested until their seventh or eighth year. The female king for market in 1964 was frozen, 20 percent was canned, crabs are considerably smaller than the male of the same and the remainder was sold fresh. (See Table III) age and are identified by their broader, less elongated There were approximately 300 boats registered as king tail. 'Dhe female will hatch 150,000 to 400,000 eggs, after crab vessels in Alaska in 1964. The size of these boats an incubation period of 11 months, but it is estimated varied widely. They ranged in length from 20 to 170 that only about 2 percent of these baby orabs survive, feet, but the majority of them were between 30 and 40 since other species of the sea find them a delicacy. Ma­ feet long. ture crabs also become the prey of these predators. Three An estimated 1,200 Ameiioan fishermen were employed large king crabs have been found ingested in a single 80 harvesting Alaska king crab during 1964. These fisher­ pound halibut. Despite the struggle for survival, the men received a total of $8,186,190 for their catch. (See propagation of king crab in an area can be maintained, Table I). Approximately 780 persons were employed even under intensive fishing pressure, if the regulations processing this harvest. are obeyed .

.,.,,.-- ,ABLE -11------

WHOLESALE VALUE OF FISHERIES PRODUCTION IN ALASKA ( 1960 - l964- (1 (, (., (thousands of dollars) I Percent Shrimp King of Dungeness and other Year Total Salmon Halibut Crab Total Crab Shellfish Other 1960 96,689 83, l 08 3,736 5,295 5.5 l, l 08 1,588 1,853 1961 128,726 107,050 7,035 9,626 7.5 1,474 2,273 1,268 1962 131,938 l 02,419 l 0,288 11,862 9.0 2,642 3,634 1,093 1963 l 09,038 75,988 7,929 16,771 15.4 3,032 4,300 1,018 1964 140,921 l 04 ,764 8,006 21,262 15. l 3,579 1,520 1,790

Source: Department of Fish and Game, State of Alaska. UNIVERSITY OF ALASKA, INSTITUTE OF BUSINESS, ECONOMIC AND GOVERNMENT RESEARCH PAGE 5

King crabs genemlly live to be about 15 years old. KING CRAB REGULATIONS Consequently, when fishermen begin to harvest a virgin Alaskan commeroia l ki~g ,ctab harvesting regulations king crab fishing area, they are drawing from about nine have traditionally s,pecified the sex and size of the king different age-groups of king crab; that is, the crab the crab that can legally be taken in Alaskan water. Cur­ fishermen keep range from seven to eight years of age to rently these regulations do not permit the harvesting of 15 years of age . During this period a rather wide range female king crab, and the minimum harvestable size for of crab sizes are tak en from the king cmb fishery. How­ male king crabs in most areas in 1965 was seven inches as ever, as fishing pressure in the area continues to in­ measured aoross the greatest width of th e carapace. crease, a point is reached where the older male crabs Alask!an king crab regulations also stipulate the type have all been harveste d and £is ermen catch and re tain and amount of gear that can legally be used for the for processing only those crab which become of legal size commercial harvesting of king crab. The regulations each year. Obviously, harvests can exceed the annual also indicate the areas which may be fished. harvestable increment only until the older age classes have all been taken. When the older crabs have all been METHODS OF CATCHING KING CRAB caught, the average weight of the crab being harvested Alaskan king crab have been caught commercially by declines, and total production falls and tends to fluctuate tlu·ee types of gear: tangle nets, otter trawls and crab at levels dictated by the number of new cmbs reaching pots. Under the current regulations of the Alaska De­ harves,table age. This is the situation currently develop­ pantment of Fish and Game, king cmb may not be taken ing in 1:JheKodiak area, and as a result the Kodiak king by tangle nets or otter trawls; thus the only legal method crab indus,try may go tlu·ough a period of wide catch of conducting commercial king crab fishing operations fluctuations such as those experienced by the Dungeness in Alaska rut the present time is by the use of crab pots. crab industry. This regulation does not impose any real hardship on There are thiuteen king crab processing plants operat­ the indtistiy however, since, in terms of productivity per ing in the Kodiak area at the present time. Nine of these man hour worked, crab pots are the most efficient type are within the city of Kodiak itself. An estimated 80,000 of gear for harvesting Alaskan king crab. crabs are needed daily to keep these plants operating. TANGLE NETS To opetate at capacity these plants · would require more than 100 million pounds of crab annually, which When set in place to harvest king crab, tangle nets is about equivalent to the entire estimated 1965 king crab resemble a large mesh fence on the bottom of the sea. harves,t. Since muoh ofthe current king crab harvest is King crab are continually migrating on the ocean floor processed in areas other than Kodiak, it is evident that and their legs and carapace tend to become enmeshed Kodi!ak has some idle plant capaoity. Such conditions in any tangle net blocking their migmtory path. Once in the past have stimulated the expansion of the fishing caughrt, the crab 's stmggle to get free only serves to hold fleets with a. resultant decrease in the share of the catch it more secure ly. accrning to each vessel. The end result may well be the Obviously, when a tangle net is used, it catches male setting of a quota in the king crab industry such as now and female crabs indiscriminately and without regard to m~ists in the halibut industry. size. It is ve1y difficulLto _remove crabs from these nets -~ Annual commercial production in a heavily harvested TABLEIll area may show drastic declines over a period of years. One way to avoid such overharvesting is tlu·ovgh the use ANALYSIS OF VALUE OF KING CRAB of factoryships which can be moved from place to place BY METHOD OF PROCESSING ~ as harves,ting conditions dictate. l-961r \ ti L {

Whol esale · Whole sale Total Alaskan king crab production will not declin Numb er .of Percent Value After Percent Value Q.,er Method of Pounds of Proc eS!,:ing of Pound markedly as long as new unexploiited king crab fishin Processing .Processed Total (in dollars) Total .Dungeness crab pots were used bility for overall king crab market promotion and develop­ to capture sample king crabs. Small processing plants in ment. Olga and Moser Bays were entirely dependent on crab Under provisions of the Act which created the Board, from pots as eavly as 1941. Alaskan king crab producers are assessed one percent of The first king crab pots were constructed of wood and the gross value of their production. These funds are used were covered with salmon trap wire and seine netting. to finance the activities of the Board. Each Alaskan Manila rope and pot warp were employed for buoy king crab processor has the opportunity to review the lines, and strings of seine corks were used as buoy Board's annual program and approve or disapprove the markers. Pots of this type usually were good for only costs. At its initial meeting, the Board concluded that the one season and then had to be replaced. quality control practices currently implemented by the UNIVERSITY OF ALASKA, INSTITUTE OF BUSINESS, ECONOMIC AND GOVERNMENT RESEARCH PAGE 7 industry's individual processors are adequate, and as a lished king crab fishery before the implementation of the wnsequence, no funds were allocated for quality control provisions of P. L. 88-308. by the Board. However, a $50,000 advertising and pub­ Practical arrangements were successfully concluded in lic relations budget was approved at the Board's first November, 1964, regarding Japanese king crab fishing in meeting. the eastern Bering Sea. These arrangements did not prejudice the legal position of either the United States or CONVENTION OF THE CONTINENTAL SHELF Japan. The agreement expires in two years at whioh tiime the two governments plan to hold further consultations. One recent development important to the orderly of Alaska s ki11g crab mdustry 1s the Convention Under terms of the agreement, Japan's king crab catch of the Continental Shelf. This Convention was recom­ in the eastern Bering Sea is limited to 185,000 cases per mended by the United Nations International Convention year for 1965 and 1966. This is a harvest reduction of on the Law of the Sea and was ratified by the United about 21 percent. Other provisions in the agreement States on April 12, 1964. Twenty-two nations had to rati­ called for: the application of interim conservation meas­ fy this Convention before it could become legally effec­ ures; continued and intensified scientific study of the tive. On May 10th, 1964, Great Britain became the 22nd king crab resource; and procedures for enforcement of signatory nation and the Convention went into effect on the terms of the agreement. June 10th, 1964. In order to minimize the possibility of conflict result­ The Convention of the Continental Shelf provides that ing from the use of diifferent types of fishing gear by the a coastal state, such as Alaska, has sovereign rights over two countries, the agreement also specifies an area in its continental shelf and may exercise these rights for the which only crab pots will be used for commercial crab purpose of exploring and exploiting the shelf's natural fishing. This part of the ,agreement is particularly im­ resources when such resources at their harvestable stage portant to Alaskan king crab fishermen since large num­ are either immobile on or under the sea bed or are unable bers of valuable crab pots have been lost due to the to move except in constant physical contact with the sea activities of Japanese and Russian fishing vessels. bed or subsoil. Thus Alaska, under terms of the Con­ The Soviet Union is a signatory to the Convention and vention, can assert jurisdiction over certain clams, crabs, agrees wit:h the United States that the king crab is a re­ oysters, abalone and other species which live on the floor source of the continental shelf over which the coastal of the continental shelf adjacent to Alaska's coast. nation has sovereign rights. Accordingly, after several weeks of consultations, an agreement on fishing for king The United States Senate Bill S.1988, signed into law crab was signed by the United States and the Soviet in 1964 as Public Law 88-308, contains a section designed Union on February 5, 1965, at Washington, D. C. The to implement the Convention agreement. When the United States agreed that Soviet fishermen may continue President signed this biH (known as the Bam:lett Act) into to harvest king crab in the eastern Bering Sea for two law, he acknowledged that king crab were to be included years at a reduced level of catch. The Russian govern­ as a continental shelf resource. Although the territorial ment agreed that its fishermen would not fish for king shelf Convention defines the king crab as a crustacean crab in other areas of the United States continental which walks on the continental shelf, the Japanese con­ shelf. This portion of the agreement was violated by tend that king crab actually swim as well as walk and Russian fishermen on June 21, 1965, when the Soviet should not be so defined. Japan has not ratified the Con­ factoryship Konstantin Sukhanov was discovered taking vention and does not intend to do so. king crab with 7 fishing boats from 40 fathoms approxi­ Public Law 88-308 could eventually have the effect mately 25 miles south of Unimak Island. of stopping Japan and Russia from pursuing their king The agreement also provides for conservation measures crab operations on areas of the United States' continental to be applied by both countries in the eastern Bering Sea, shelf adjacent to the Alaskan coast. The situation in re­ for continued and intensified scientific study of the king lation to Japan, however, is complicated by the fact that crab resource there, and for enforcement of the terms of a "historical fishery" is involved, since Japan has been the agreement. The agreement specifies that only crab harvesting king crab in this area for some 35 years. Faced pots will be used for commercial crab fi~hing in a sub­ with the opposing legal positions of the two governments stantial sub-area of the Bering Sea. Russia and the regarding rights under international law to fish the king United States plan to hold further consultations regarding crab, the President of the United States assured Japan the king crab ,resource prior to the end of the two-year that full consideration would be given to its long-estab- period. PAGE 8 UNIVERSITY OF ALASKA, INSTITUTE OF BUSINESS, ECONOMIC AND GOVERNMENT RESEARCH

THE FUTURE OF THE INDUSTRY this waste material into salable products could substan­ tially improve the economic well-being of Alaska's king Although king crab sales have expanded very rapidly for the past several years, there is ample evidence to crab industry. Such a development would enable the king crab industry to derive part of its income from by­ indicate that only a small portion of the potential viarket is being exploited. In fact it is very likely that tens of products and thus become more compeUtive in the world millions of Americans who could well afford king crab food market. and would undoubtedly enjoy it, have never even tasted Ground and dried king crab shells and gmry have it. been sold for chicken feed and swine feed in the past. fhus crnL sales not !wen the eastern portion of the United States. Approximately high processing and freight costs. Crab shells also have 50 percent of the king crab sold in recent years has been been utilized recently as a source of glucosemide, a filler sold in the area ranging along the Atlantic coast from and stabilizer for antibiotics in capsule form. However, Boston to New York, while the coastal area from Balti­ this market is very limited and does not require any sig­ more to Florida has accounted for only about 10 percent. nificant quantity of shells. The Great Lakes area between Cleveland and Minneapo­ New research developments indicate that a solution lis has accounted for about 20 percent of recent king to the problem of profitable utilization of king crab crab sales, and the vast area from Chicago westward, in­ shells may soon be f011thcoming. One prime potential cluding Alaska, consumed only 20 percent of Alaska's king market appears to be Alaska's oil industry. Tests show crab production. Both the retail and the institutional that crab shells can be substituted for the walnut shells segments of the king crab market are untouched or un­ now being used by oil companies to conserve drilling derdeveloped in many parts of the United States and mud when crevasses and caverns are encountered in most potential foreign markets have yet to be approached. drilling. This market might become large enough to King crab is not an inexpensive product, but experi­ utilize a significant p011tion of the king crab shells cur­ ence proves that it does not need to be inexpensive in rently being discarded. order to sell. King crab is a high quality product and Other possible uses of crab shells being explored at can easily command a premium price in an unsaturated this time include their utilization by the rnbber industry market. It would be a mistake to lower quality in an at­ in making winter tires and their possible use as a smface tempt to reduce prices and increase sales. A gourmet for wood paneling. food such as king crab should be processed only under the highest quality standards in order to develop and maintain a permanent consumer market. In future years FUTURE REVIEW TOPICS increasing emphasis might well be placed on advertising A wide variety of topics are being considered for pre­ and marketing in order to develop numerous new markets. sentation in future issues of the Review. A1iticles currently With the rapid expansion of king crab production current­ in preparation for early inclusion will cover: a study of ly taking pl.ace, lack of promotional effo1t may well re­ the Anchorage economy; a summary of Alaska's economic sult in unprofitable levels of king crab prices in the activity in 1965, along with a forecast of economic trends years ahead. for 1966; a study of the reapportionment of Alaska's legis­ lature, and its possible implications. KING CRAB BY-PRODUCTS The following back issues of the Review are still avail­ When king crab are canned or processed as frozen able for those interested: The Economic Impact of the meat, 80 percent or more of the crabs' landed weight be­ Alaskan Earthquake; Alaska's Financial Position; Agricul­ comes waste. (See Table I.) The meat of the king crab ture in Alaska; The Petroleum Industry in Alaska; Alas­ is in the claws, legs and shoulder, and ordinarily none of ka's Fisheries Industry; The Gold Mining Industry in the rest of the cmb is used. The disposal of growing Alaska; The Wood Products Industry in Alaska; Alaska's quantities of crab shells and gurry have created serious Economy in 1964; The Coal Industry in Alaska. Single problems for shore-based processing plants. In some copies of any of the above oan be obtained without oharge places, the disposed material floating in the water and by writing to the Editor of the Review, Institute of Busi­ awash on the beaches has contaminated an area and ness, Economic and Government Research, University created a paramount health hazard. An estimated 40,000 of Alaska, College, Alaska, 99735. tons of king crab shells and gurry will be thrown away The staff of the Review would welcome any sugges­ by the industry's processors during 1965. Obviously, the tions from readers concerning possible subjects for future development of some profitable method of converting issues.