The general manager of the fish hatcheries in southern Southeast Alaska dished on this season's poor salmon returns to a group of 50 people at a Greater Ketchikan Chamber of Commerce event at Cape Fox Lodge on Wednesday.
The nonprofit Southern Southeast Regional Aquaculture Association operates seven hatcheries and seven additional release sites from Petersburg south to near the Canadian border.
SSRAA General Manager David Landis explained how the poor year affected the organization, commercial fisheries, and, by extension, the economy around Ketchikan. SSRAA lost out on nearly $7 million in chum related revenue from its busiest hatchery — nearly 90% of its operating costs.
According to a 2018 study by the McDowell Group, SSRAA is directly responsible for 60 jobs, paying out $3.3 million annually in salary.
"These (dollars) tend to stay in communities and roll around more," said Landis, citing SSRAA's large number of career employees.
The association is indirectly responsible for an additional 620 jobs and $66.7 million in annual economic activity, according to the study. The association works primarily with chum salmon, and some with chinook and coho salmon.
"The facilities (hatcheries and release sites) impact all the work we do with local operators," said Landis.
Besides groceries, Ketchikan Public Utility bills and routine expenses, the association also pays for fabrication services. Landis said SSRAA's net pens — of which there are "hundreds and hundreds" — were fabricated out of aluminum by a local company, Homestead Skiffs.
"We spend about a quarter of a million dollars just on float planes back and forth to our facilities," said Landis.
So when only 1.15 million chum were harvested out of an anticipated 3.9 million the effects reverberated. Only 18% of the expected return at the SSRAA hatchery at Neets Bay materialized.
"The lion's share of all of our cost recovery is done at Neets Bay," said Landis.
The association oversees the release of 65 million chum salmon at the Neets Bay hatchery site every year. The salmon return primarily as 3- and 4-year-old fish.
Each year, SSRAA puts out a cost recovery contract to bid.
This year SSRRA contracted with Trident Seafoods to hire seiners to catch the fish in its special harvest area and bring them back into town on tenders. The primary product from this is roe, or salmon eggs, which are sold in foreign and domestic markets to make caviar.
For fish that make it into the hatchery raceway, SSRRA will also license these fish to be sold. This year E.C. Phillips & Son got the contract.
However, "at Neets Bay all we got was broodstock," said Landis. "We had to restrict all of our cost recovery fishing."
Broodstock is the minimum required amount of fish required to sustain hatchery operations. The chum eggs are harvested, incubated and hatched before they're raised in net pens and released as smolts.
"We're not a fish farm," said Landis, "We don't raise these fish to where they're able to be harvested. We just raise them (until) they can exist on their own."
The hatchery struggled it meet its egg-take goal of 210 million eggs for brood stock, according to Landis.
SSRRA also earns money when commercial fishermen bring in their catch to be sold. A 3% "enhancement tax" is collected for SSRRA operations.
Around 3.2 million SSRAA salmon are harvested annually between sport harvests, commercial fisheries and cost recovery activities. According to a study by the McDowell Group, the organization has been responsible for more than half of the southern Southeast commercial harvest for chum, nearly 40% for chinook, and 31% for Coho for the decade starting in 2008.
These returns averaged $16.8 million in salmon harvest values for the commercial common property fisheries from 2013 to 2017. In the same time frame, the association was responsible for 3,000 kings and 28,000 cohos annually in the sport fishing harvest, according to the study.
Terminal harvest areas near the hatcheries often see rotations between different gear groups depending on the hatchery. Special harvest areas are located closer to the hatchery sites.
Typically 75% of the fish that return is intercepted by fisheries, and SSRRA reserves 25% for broodstock and cost recovery.
"And the fish swim by everyone else before they get back to the hatchery," said Landis. "So we we're the last to eat at the table with cost recovery."
This year SSRAA earned about $100,000 from its summer chum related operations at Neets Bay — typically they make about $7 million, according to Landis. The association's operating expenses hovers around $8 million a year.
However, SSRAA is able to mitigate those effects by dipping into reserves, exploring a fisheries enhancement loan program through the Alaska Department of Commerce that defer interest payments, and postponing construction projects that aren't critical, according to Landis.
Landis said staffing wouldn't be affected.
"But we've never really encountered a situation this large either," said Landis, "So we'll have to be looking at doing some new things and we'll be determining what those things are as we go through our board of directors process this winter."
He said the organization might look at refocusing its goals, while minimizing its effect on fishermen.
"We want to make sure the resource stays viable," said Landis.
"We're going to have to start looking at a different scenario there to be able to bounce back from what we have, which is a real cash shortfall this year," Landis said.
But the reasons for poor return remain unknown.
"It's not that our fish don't have enough to eat, it's that something is eating them," said Landis. "And it's probably an unfamiliar predator that is an invasive species basically caused by this warm marine environment."
Landis said it could also be related to the 2015 chum class maturing faster and gaining size more quickly than expected.
"Nature said, 'come back' and a higher percentage of them returned (in 2018) as 3-year-olds than would normally be expected," he said.
He said a good amount of 3-year-olds typically corresponds to a healthy return of 4-year-olds the next year, which didn't materialize.
"That was almost unprecedented that would happen," said Landis.
Also complicating matters is that wild chum runs in southern Southeast were reportedly healthy and strong.
Landis said that biologist working at hatcheries throughout Southeast Alaska are studying the season and working on hypothesis.
"All we have are little clues," said Landis.