F/V Morningstar II crew member Andrew Beauchamp, left, hands over part of their crab catch to Dave Bailey, who puts the feisty crustaceans into containers destined for the Lighthouse Deli. Bailey and Al Bostick own the vessel, which they use to prowl the ocean for crabs, salmon, and "a little tuna." Fisheries economists have indicated the fishing industry had a great year in 2004 after "bottoming out" in 2003. Bailey and Bostick agreed things are looking up, crabbing in particular. (Photo by Terry Dillman)

Oregon fishing industry a good year 2004 because and despite changes in structure

By Joel Gallob Of the News-Times

Editor's note: this article is the first of four in a series on "Restructuring the Oregon Fishing Industry." The series is based mainly on a report "Oregon's Commercial Fishing Industry Year 2004 Preliminary Review and Year 2005 Outlook" written by Hans Radtke and Shannon Davis, collectively, The Research Group. Information also came from interviews, and from articles and data available on the Internet.

The year 2004 was, overall, a very good year for the Oregon commercial fishing industry, according to the draft of a study by Hans Radtke and Shannon Davis, the Research Group. The year represented, in several ways, a turnaround after several down years. That turnaround occurred in part because of changes in the industry's structure. In fact, the Oregon fishing industry has gone through an overhaul in the past few years, and while it may not be finished, its outlines are now clear.

The study was prepared for the Oregon Department of Fish and Wildlife and the Oregon Coastal Zone Management Association, and given by Radtke to the News-Times.

The upturn

Despite variations from sector to sector, the commercial fishing industry contributed $342 million in personal income to the Oregon economy in 2004. According to the report, that made 2004 "the best year the industry has had since 1988," and was "about 39 percent higher than the average of the previous ten years."

That broad economic impact flowed, in part, from the frequently good numbers for the "ex-vessel" revenues fishermen got for the fish they unloaded in 2004 - even if some of those revenues came from low per-pound prices netted by the fishers. The ex-vessel revenues reached $97.4 million in 2004, the highest such value since 1988's $97.8 million and the second highest (after 1988) in the 35-year data set. In 2003 that ex-vessel revenue figure was $84.1 million, behind only 2004 and 1988.

If 2003 suggested a turnaround in the industry, 2004 - even deducting for the fact of balmy weather - appeared to confirm it.

The prior several years had seen a series of cutbacks and setbacks. These included the listing of several salmon runs under the Endangered Species Act, the decline of several groundfish species, groundfish catch quota cuts, and the closure of much of the continental shelf to groundfish trawling. The period also saw cyclical change to poor ocean conditions (i.e., an absence of nutrient-rich upwelling) in 1996-97, which did not reverse itself until about two years ago.

The ocean conditions had much to do with the economic changes - the signal drop in revenues came between 1996 and 1997, the same period scientists say they saw the shift in ocean conditions. But a lot of other factors were in play, too, from what the regulators found to be overfishing on some groundfish species, to the Northwest's multi-faceted salmon crisis. Now, along with a return of good ocean conditions, other factors have improved, too.

A restructured industry

The total volume of fish commercially landed in Oregon in 2004 was 294.1 million pounds, well up from 225.7 million in 2003. The 2004 figure was the highest back to 1970, the starting year of the study data. In 35 years, only 1995 and 1996 came close to the 2004 volume.

Yet the rise in tonnage reflected, in large part, a shift from low-volume, high value species, like salmon, to high-volume, low value species, such as whiting and sardines. The salmon are paid for in dollars per pound; the whiting, in cents per pound.

The high-priced salmon dropped from 19.6 million pounds in 1970 to 5.9 million in 2004, while whiting, which did not exist as a fishery until 1989, rose from 5.0 million in that initial year to 130.2 million in 2004. The numbers for both show highs and lows over the intervening years and decades, but the 2004 salmon level was near bottom and the 2004 whiting catch near the top. It is clear the salmon catch has been declining, and the whiting numbers rising.

Similarly, the groundfish catch, which in the 1970s rivaled the salmon in value, and starting in the mid-1980s replaced the salmon as the chief money-maker for the fleet, declined severely in catch in the 1990s. By 2002 and 2003, the groundfish catch value of $14.7 million was half, or less what it has consistently been in the 1980s and most of the 1990s. The groundfish catch value for 2004, which was below the 2003 number (even if slightly higher than that for 2002), gave little evidence of any turnaround in this formerly favored fishery.

The trend to lower value catch, the report stated, "has also had the effect of concentrating landings in ports that have high-volume harvesting and processing capabilities, such as Newport and Astoria." Newport is the top whiting port, with 43 percent of the coastwide volume coming into it. Astoria and Charleston follow, and several other West Coast ports take in the rest.

The transition to being, in large part, a whiting port wasn't easy in Newport. In the late 1990s there were numerous complaints about potent noxious odors from what was then the Arctic Alaska whiting plant. Trident Corporation picked up Arctic Alaska when it bought Arctic's parent, Tyson Seafoods, and invested sufficient funds in the Newport plant to cut odor complaints to near zero.

Not all species are of an especially high, or especially low, value per pound. Some species with good volume and moderate prices, like the Dungeness crab and albacore tuna, have been stable or better for the fishermen.

The Dungeness crab, in fact, have been the brightest spot in the whole picture. Their landings in 2004 came to a record 27.2 million pounds in 2004. That beat 2003's record-setting figure of 23.9 million pounds. Those two years were the two highest in the dataset going back to 1970, and the first back-to-back record hauls. They brought a record $42,787,000 in 2004, and $36,736,000 in 2003 to Oregon crabbers - almost half of the $97,350,000 total landed value in 2004 and over a third of the $82,395,000 of 2003.

There are not a lot of Oregon vessels that specialize in tuna, the report noted, mainly because hunting tuna usually means heading far out to sea to find the highly migratory fish. But the tuna become "an opportunity fishery," the report explains, "when ocean conditions displace the cold California Current and bring warmer waters closer to shore." That makes the tuna more accessible, especially to smaller boats. Largely because of this, the tuna catch has increased for the past three years, reaching 10.6 million pounds in 2004. That still did not come close to the peak years of the 1970s, but after the paltry catches of the 1980s and 1990s, the 2003 and 2004 numbers were a notable turn-around.

Thus the shift from high-value salmon and good-value groundfish to low value whiting (and sardines) has been buffered not only by the great whiting volume but, more recently, by banner years in crab and good tuna years.

The shake-out

The industry clearly has seen a shake-out as well as a restructuring. In the salmon fishery, the state provided some retraining for ex-fishers in the Hire The Fisher program, which was later built upon with the Groundfish Disaster Outreach Program. The 2000 Strategic Plan for the groundfish, written by the Oregon Department of Fish and Wildlife, sought a 50 percent cut in the size of the groundfishing fleet. And that did occur - in part as fishers who could not survive dropped out of the industry, in part as a federal/industry permit buyback program bought up groundfish permits - and shrimp permits, too - and took many of their owners off the waters. (Some kept fishing, usually crabbing.)

But those who managed to stay in have seen a growth in revenue. The report's bar chart for the number of fishing vessels and the average revenue per vessel did not give precise numbers. But it clearly showed (despite occasional ups and downs) an overall drop since 1981 in the number of vessels, and a rising line of revenues for that declining number of participants.

In 1991, roughly 3,600 Oregon vessels saw an average of less than $30,000 income per vessel. By 2004, the report indicates, just over 1,000 vessels homeporting in Oregon saw an average income that was three times higher.

Between the carving away at the groundfish fleet and the endangered species listing of the salmon on the one hand, and the rise in low-value whiting (and sardines) on the other, the past decade has produced "a reduced number of small boats and increased annual revenues for the remaining boats."

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