Today, rising labor costs, soaring feed prices, and limited freight logistics are not comfortable in any industry, but these have not stopped the current "mania" of the global salmon trade. It can be said that the current "desperate situation" has become the best time for salmon farming.
At the beginning of 2022, international salmon prices experienced an unexpected surge. Although as early as the end of last year, many people in the industry predicted that the salmon market would usher in a rebound, but no one expected to rebound to this extent.
As a bellwether for the global salmon market, the origin shipment price in April has stood firmly above the threshold of 100 NOK/kg (71 yuan/kg), setting a record for Norway's 22-year history of official transaction information. The price of 6 kg + large size salmon is even as high as 135 CZK/kg (RMB 96/kg).
Although the comprehensive cost of salmon farming is high under the influence of various unfavorable factors at present, the record salmon price has a surplus after covering the higher cost, which also makes Norway's salmon farming industry earn enough silver.
According to the Norwegian Seafood Agency (NSC), Norway exported a total of US$3.4 billion in seafood in the first quarter of 2022, an increase of 22% over the same period last year, of which farmed salmon exports accounted for 68%. Although salmon exports fell by 5% year-on-year, exports increased by 33%.
As a brother in the global salmon farming industry, although the Norwegian Meiwei company's production fell by 23% year-on-year in the first quarter, the company's operating profit reached 207 million euros, a year-on-year surge of 90%. Obviously, Meiwei sells fewer fish and makes more money.
Norwegian well-known brokerage Featherley Securities predicts that salmon prices still have room to rise in the second quarter and achieve a "soft landing" in the second half of the year, which will also mean that Norway and Chile, the world's two largest salmon producers, will achieve record industrial gains this year.
Production cannot keep up with consumption
The most fundamental reason for the price increase of salmon is that production cannot keep up with consumption. Salmon as a kind of cold-water fish with more demanding farming conditions, there are only a few countries in the world with breeding conditions. Since the 1990s, these limited natural breeding resources have been "divided up" by various salmon farming giants. Moreover, these limited aquaculture resources have been saturated for more than a decade after years of development.
In addition to the need to protect the environment, Norway, Chile and Canada and other countries strictly control the amount of salmon culture in natural waters is also for the sake of protecting the healthy and long-term development of the salmon farming industry, after all, the carrying capacity of the natural environment is limited, blindly pursuing production, and is susceptible to parasites, viruses and red tides and other unfavorable factors.
That is to say, the upward space of global salmon aquaculture production is "locked" due to the limited natural breeding environment, but at the same time, the global salmon consumption market has achieved substantial growth in the past ten years with the help of emerging markets such as China, South Korea, and the United Arab Emirates, which naturally also makes the global salmon price enter the upward channel, and the latest round of salmon price increase is an extreme performance in the current "extreme" period.
Because there is both a market and a price, breeding enterprises will naturally hollow out their minds to expand production.
Deep sea and land-based incense is not fragrant?
Because the industry is mature, it is very difficult for enterprises in the salmon farming industry to increase production through mergers. Isn't it fragrant for a hen that can lay golden eggs in her own hands? Therefore, at present, there are only two breakthroughs in deep-sea aquaculture and land-based circulating aquaculture, but everyone has been engaged in so many years, subject to cost and technical bottlenecks, and has never been able to get out of a decent road.
Norway has gone the farthest in salmon farming in the far seas, but to date only two projects have received permanent licenses from the Norwegian government, one is SalMar's "Ocean Farm 1" project, which has completed two salmon farmings with a cumulative production of 10,000 tonnes. The other is the Havfarm deep-sea aquaculture vessel project developed by Nordlaks, with a culture capacity of 10,140 tonnes.
Ocean Farm 1
Havfarm
It is worth mentioning that the main projects of these two breeding projects are completed by shipbuilding enterprises in the mainland. Although it is a star project in the field of deep-sea aquaculture in Norway, due to the high cost of aquaculture and the need to solve many new problems with high mortality, it has not played an effective benchmarking role to help enterprises achieve substantial production increases.
Because of the difficulty and unknown impact on the environment, the Norwegian government did not encourage aquaculture enterprises to engage in deep-sea aquaculture in order to expand production capacity, but only let a small number of pioneer troops explore the way and accumulate experience and technology.
This is followed by land-based circulating aquaculture. Because it is difficult to enter the field of traditional salmon farming, many foreign enterprises and capital have engaged in land-based circulating water aquaculture through the joint traditional breeding enterprises (technologies). Land-based circulating salmon farming projects were once a hot topic in the field of global aquatic investment before the outbreak of the epidemic, but in recent years, although land-based aquaculture projects have blossomed all over the world, they have also encountered similar difficulties as deep-sea aquaculture projects.
Although the salmon market "money scene" is gratifying, but also because of the high cost, it is also necessary to solve a variety of new problems rarely encountered in traditional cage culture, such as high equipment accident rate, high density breeding caused by early maturity, etc., but let the emerging land-based salmon farming projects become a long investment cycle, slow effect of the "hard bones".
Atlantic Sapphire (AS), the world's largest land-based RAS salmon farmer, recently released its 2021 annual report, producing just 2,374 tonnes a year, well below the expected 20,000 tonnes. AS's annual revenue was as low as $16.85 million due to lower-than-expected production, resulting in an increase in losses of $132 million.
As a benchmark for the land-based salmon farming industry, AS has ambitions to achieve a production of 220,000 tons by 2031, but the ideal is beautiful, and the reality is very bone.
Globally, in 2019, the project production applied for by the land-based salmon farming industry was 10,000 tonnes, which increased to 23,000 tonnes in 2020 and 29,000 tonnes in 2021. Although the scale of the global land-based salmon farming industry has continued to expand in recent years, the current production growth is undoubtedly a "drop in the bucket" for the global salmon farming industry with a total output of nearly 3 million tons.
As the only remaining "Moutai fish" in the global aquatic industry, it is not surprising that the salmon farming industry has greatly expanded its production, and the price has repeatedly set records. According to industry insiders, in 2023, the global salmon price will remain at a high level, which is undoubtedly a reassuring pill for many salmon farming industries.
It is not easy to eat domestic salmon
As the world's largest aquaculture country, the money-making effect of salmon is obvious, and the industry naturally cannot stay out of the matter. Although salmon farming attempts began in the northern part of the mainland in the 1990s, they failed because there were no natural waters nearshore suitable for salmon farming. Today, the mainland can only take the far-reaching sea and land-based aquaculture route of Norway as an "alternative".
In terms of deep-sea aquaculture, Deep Blue No. 1 is a very familiar project in the Yellow Sea "cold water mass", and the salmon cultured in the head stubble has also been successfully harvested last year, and other aquaculture projects in the deep blue series have also been promoted, but the difficulties faced by the deep-sea aquaculture project in the mainland are obviously much greater than in Norway.
Navy No. 1
Norway's salmon farming industry has developed for a long time, and has been immersed in traditional inshore aquaculture for many years, while the mainland is a "hell mode" because of its limited conditions, which is difficult to imagine.
In addition to the standard problems of far-reaching sea aquaculture, mainland aquaculture enterprises also have obvious disadvantages in breeding, feed and related technologies due to the lack of experience and technology accumulation in the development of traditional salmon aquaculture. Although there is a domestic market as a basis, there are also considerable advantages in the construction technology and cost of breeding hardware equipment, but it is very difficult for the industry to achieve large-scale and commercialization of salmon farming in the short term.
In terms of land-based aquaculture, there is currently only one project called "Oriental Ocean" that the mainland can put on the table, which has now been renamed "Guoxin Oriental". This is an old project that has persisted for more than ten years, because the difficulty is too great, it has not achieved profitability in the hands of Oriental Ocean, and finally can only find the state-owned enterprise Qingdao Guoxin to "continue life". After tossing and turning for so many years, it has not seen a rise, but it has waited for the news that the land-based breeding plant invested by Nordic capital in Ningbo Xiangshan has been officially put into operation.
Speaking of this, I have to say about Joyvo Food (a holding company of Legend Group) that takes the "curve to save the country" route. Although it has long been optimistic about the market prospects of salmon, but lacking an aquaculture background, Joyvo can only grit its teeth in 2019 to spend nearly $1 billion to acquire a large Chilean integrated salmon production enterprise called Australias Seafoods.
Although Joyvo's acquisition was not optimistic at the time, and it was also expensive by the industry, it now seems that spending 1 billion yuan to buy a seat in the global salmon farming industry seems to be a good deal, and Australias Seafoods has successfully turned a profit last year, and is now expected to become the cash cow of Joyvo Foods in this round of "salmon fever".
epilogue
In the long run, the market position of salmon in the global aquatic products industry is equivalent to that of Moutai liquor in the mainland liquor industry. Because the growth of production cannot keep up with the expansion of the consumer market, salmon, the head fish of the global aquaculture industry, will continue to "dominate". Although it is difficult for China's aquaculture enterprises to become head players, compared with completely staying out of the matter, the aquatic enterprises on the mainland involved in the salmon farming industry have achieved good results, although the road ahead is long, but the future can be expected. (End)
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