How Viable is Salmon Farming?

“Kudoa is a typical customer claim. At 4Q11, Marine Harvest continued to report Kudoa challenges linked to the Campbell River area…. The company will concentrate production at the best sites, while other sites will be closed down in order to improve biological performance.” Download MHG4Q11update080212 copy.pdf (884.4K)

Download Marine Harvest Q1 2012.pdf (3929.4K)
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“For Marine Harvest Canada, the 2011 profit was affected by exceptional customer
claims and discards at harvesting totalling NOK 67.7 million due to the parasite Kudoa thyrsites. A restructuring plan for Canadian operations led to restructuring costs of NOK 23.4 million“

“Operating revenues for Marine Harvest Canada were NOK 1 182 million
in 2011 (NOK 1 371 million). The average price achieved in CAD was 11% lower than in 2010 due to high presence of Kudoa combined with a general reduction in the market price. Total costs related to discards and claims as a result of soft flesh (Kudoa), amounted to NOK 68 million/NOK 2.00 per kilo harvested in 2011 (NOK 24 million/0.72 per kilo harvested).”Download MH_AnnualReport_2011_Web copy 2.pdf (6264.7K)

People in many countries have been ignored when they have asked these companies to reduce the size of their farms in lochs, fjords and inlets. However, now that they are trying to save themselves Marine Harvest has removed almost 7.5 million farm salmon from the ocean.

“...the Group therefore decided to initiate actions to protect the 2012 cash flow. The first action was to reduce the smolt stocking by 3.8 and 7.5 million smolt for 2011 and 2012 respectfully.” Download MH_AnnualReport_2011_Web copy 2.pdf (6264.7K)

Politician after politician has repeated – salmon farms make jobs. This has been the standard response to any effort to simply move the industry away from wild salmon to preserve the numerous jobs relying on wild salmon. But today, Marine Harvest reports they are laying people off to try and preserve the company.

“We strongly regret the approximately 60 job losses that result from these changes, but it is necessary to preserve the future of our company.” Vincent Erenst Wharfside Marine Harvest Newsletter

Not only are workers loosing their jobs, in their first quarter report, 2012, Marine Harvest suggests there will be no dividend paid to shareholders this year (page 23) Download Marine Harvest Q1 2012.pdf (3929.4K)

While this company is facing oversupply worldwide, Marine Harvest blames BC for its problems because they were not given even more of the ocean to to increase production. I realize corporate schemes are hard to understand, but this is hard to understand.

In an effort to bolster their sinking shares, Marine Harvest is buying up their own shares.

“Marine Harvest ASA has acquired 409 688 own shares during 2011 through a voluntary offer and a compulsory acquisition to shareholders with less than 1 000 shares.” ReutersDownload Q4:2011 Marine Harvest.pdf (1505.9K)

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Despite closing farms, buying their own shares, harvesting more fish, stocking 7.5 million less smolts and laying people off – Marine Harvest, the biggest salmon farming company in the world and the biggest company in the 98% Norwegian salmon farming industry in BC – is still going down.

“The world’s largest fish farmer, Marine Harvest, said first-quarter operating profit fell sharply even as harvested volumes were ahead of plan as salmon prices fell.” Reuters

Desperate times seem to spawn desperate measures. Once again trying to get bigger when they are already too big to survive.

SCOTLAND, UK – Marine Harvest has been accused of offering “bribes” to the islanders of Colonsay to get them to agree to a controversial plan to turn their waters into a giant fish farm, reports Herald Scotland.
The Norwegian firm has promised the 120 residents of Colonsay, to the north of Islay, £50,000 up front and £10,000 a year thereafter if they vote for 12 salmon cages to be moored 1500 metres off their east coast, reports Herald Scotland. It would be the island’s first commercial fish farm. thefishsite

Despite the cash flow issues, Marine Harvest surprised the aquaculture world by saying they are thinking of diversifying into feed production.

Mainstream

Mainstream, owned by Cermaq is also finding BC negative drag on corporate profits:

While Cermaq reported an EBIT of NOK 101 million, their BC operations reported a negative EBIT pre fair value of NOK 1.6 million, despite “certain cost reduction programmes.”

Cost – cutting is worrisome – what are they doing less of? Surely all precaution is being taken with their fish, but I already know from reading the Cohen documents that nobody can look after the wild salmon in the face of this industry. If anyone inhibits the ability of these corporations to make money, the wrath of the WTO looms. Who exactly is making sure that as these companies cut corners it is not at the expense of the wild fish just outside the pens… fish that are competing in an already over-saturated market. Nobody, is the answer to this question, because nobody is allowed to.

Grieg

“Biological production in Canada was good throughout the first quarter. An unusually severe prevalence of winter ulcer has resulted in an exceptional downgrading of quality which in itself has contributed to the weakened first quarter results. A cost reduction programmed has been initiated in Canada with the focus on reducing structural costs“

“High prevalence of winter ulcers caused unusually high downgrades and contributed negatively to profitability “Download GSF_Q1_2012_presentation.pdf (5226.5K)

I tested a number of BC farmed Atlantic salmon last winter with ulcers like these on them. They were positive for the piscine reovirus, causative virus of Heart and Skeletal Muscle Inflammation, a disease that attacks the heart of salmon, stunting their growth and if it spreads to wild salmon, might reduce their ability to swim up a river.

I wonder if the Grieg fish with “winter ulcers” were reared in same farms as the so called Skuna Bay product Grieg is selling to the U.S?

Again – it would be good to know what “cost reductions” mean to wild salmon.

Risk

In all the financial reports I read researching these companies, none appears to have mentioned to their shareholders that BC farm salmon are testing positive for the ISA virus, which caused salmon farmers $2 billion in damages in Chile 2007-2010. I don’t know if the shareholders know that these test results caused the Cohen Commission into the decline of the Fraser sockeye to re-open and there we found DFO has been hiding ISAv positive test results in the most endangered Fraser sockeye stock since 2004.

Now we also have positive test results for piscine reovirus, which stunts farm salmon, weakening their hearts, and positive tests for Salmon Alpha virus (causes Pancreas Disease), which is causing serious financial losses in Norway and Scotland.

Researching the Norwegian salmon farming industry has given me insight into the increasingly unreasonable denial that there is a serious issue with European salmon viruses in BC – just like everywhere else these companies raise Atlantic salmon in net pens. I hope this information will give people reason to pause and think about what cards we are holding in this global poker game.

We are risking all for an industry that is not only failing, it is failing most dramatically right here in BC. The Chilean divisions of Marine Harvest and Cermaq are escalating and that is what is driving global farm salmon prices down. These companies are competing with themselves. The huge 2007-2010 ISA epidemic in Chile significantly raised the price of farm salmon enormously worldwide. Everyone stocked their farms as fast as they could hoping for a few years of high prices, but the Chilean banks pushed Chilean operators to restock rapidly and so everyone was caught with too many fish in their pens. Now Chile is going to demand the Norwegians stock their licences in Chile, even though there are too many farm salmon on the market. British Columbia is the region of greatest loss to the Norwegians using coastlines around the world to grow “their” fish. Politicians in strong support of this industry such as North Vancouver Island MP John Duncan, Minister Keith Ashfield and Nova Scotia Premier Darrel Dexter who is giving the salmon farming industry $25 million to expand might be giving people misleading and false confidence to invest in a dying industry.

DFO invested in cod fishing gear and some believe they kept the North Atlantic cod fishery open to recoup their investments. I put quotations around “their” fish, in the previous paragraph because legally it is unlawful in Canada to own fish in the ocean. No one has challenged their ownership. Do the shareholders of this industry know this?

To a biologist this global gambling is a form of addiction and insanity. To risk a wild fish that powers this province in every way, financially, food security, ecologically and spiritually, for a dinosaur of an industry losing its balance, desperately addicted to growth even as it threatens its own survival, is going to pull entire ecosystems down with it. Our governments are assisting in this destructive process. Ultimately the consumer is the only one who can stop this. The next time someone tells you these massive Norwegian operations are good for the economy ask them to read this and get back to you.

You can sign this petition to the supermarkets