Salmon farmers have never sold so many salmon like last winter, but their income is still 1 billion Swedish kronor less than the previous year.
After four years of record high prices and excess profits, the pandemic allowed the salmon industry to take root. Increased production has brought salmon prices this winter to their lowest level since 2015. Prices in the first three months of this year have fallen by 23% compared to the same period last year, and the biggest price drop has been from one winter to another.
-The amazing thing is that even in this state of the world today, we can still produce at least without loss. We are on par with covid-19 and the pandemic, says Håvard Høgstad of Arnøy Laks, general manager.
In the first three months of this year, the average price of fresh salmon was 54 NOK per kilogram, which was 16 NOK lower than last winter’s price and 10 NOK lower than the 2019 winter price. Find a price lower than the winter price by the winter of 2015. Tromsø can see this in his comments on salmon prices for the past ten years at Statistics Norway.
-January and February are low prices. Last winter, our income was 75 SEK per kilogram, and this year it has dropped to 40 SEK. Hogstad said that, fortunately, prices rose in March.
Statistics from the Norwegian Bureau of Statistics show that Norwegian fish farmers have never produced so many salmon in a winter like this year. In the first 12 weeks of this year, Norwegian fish farmers successfully produced 200,000 tons of salmon for the first time. The output increased by 16% over the previous year. The increase in sales partially offset the sharp drop in salmon prices. In the first 12 weeks of this year, fish farmers sold salmon for 12.1 billion Norwegian kroner, compared with 13.3 billion Norwegian kroner in the same period last year.
Hogstad believes that when production increases and the pandemic also affects salmon consumption in restaurants and hotels, it is not surprising that prices fall.
-The output is very high this winter. The combination of record production and closed markets shows that salmon is a very strong product and a strong brand. Hogstad said that despite the corona, we managed to achieve loss-free sales.
He believes that in the past four to five years, the period when farmers can earn 30 SEK for every kilogram of salmon produced is over. He believes that breeders can enjoy the good old days and get used to periods of more normal income.
-Previously, there was a big mismatch between supply and demand. In the past four years, our profit was as high as NOK 30 per kilogram. Hogstad said that the salmon industry must adapt to the fact that the sales price should also be close to the cost price.
-We are very happy to have a period of high profits. But he added that there has been an exception in recent years.
Profits are still good. The cost of producing salmon ready for slaughter is approximately NOK 40 per kilogram, while the price of fresh salmon in March is approximately NOK 60 per kilogram. Prices usually drop in summer, and fall are much lower than in winter.
Carnegie analyst Lars Konrad Johnsen agrees with Hogstad. The price has dropped sharply from last year’s high, but breeders are still making good money.
-It is easy to explain the price drop. Johnson said the pandemic has eliminated many hotels and restaurants where salmon is consumed.