Monday August 1, 2016

Reeling in the catchDetermining what a salmon is worth is surprisingly ambiguous. Previously, we wrote a series of articles on the economic impact of California’s salmon fishery, which generated considerable interest and, as we hoped, inspired ample debate. Many readers noted that our economic impact estimates for commercial salmon in California were considerably lower than other available estimates. For example, a report often cited in the media, produced by Southwick Associates in response to the California salmon fishery closure in 2009, estimated the fishery to have an economic impact of nearly $1.4 billion per year and provide 23,000 jobs. Dividing the commercial estimate of impact by the number of fish caught in the commercial fishery that year reveals each individual salmon to be worth a staggering $16,779. However, other less publicized reports using slightly different methods have produced substantially lower estimates. One report by the University of the Pacific Eberhardt School of Business commented specifically on the Southwick report, and explained what the authors perceived to be errors in generating the estimate. The $1.4 billion estimate includes value and jobs resulting from retail sales, wholesaling, and distributing – a huge industry in California. The UOP Eberhardt researchers argue that if the salmon fishery were to close, as it did in 2008 and 2009, many consumers would simply switch to other seafood sources, so the seafood sales and distribution industry would not be so affected by the loss of California salmon.
One of the biggest surprises in conducting our research was the overall lack of information on the economics of California salmon. A general dearth of suitable analyses specific to West Coast fisheries, the wide array of reporting metrics, and numerous extrapolation factors pose challenges to conducting economic reviews. However, we continually seek out information on the subject to update our estimates. Here we present our most recent estimates of the economic impacts of California salmon, representing 2014 harvest data from the Pacific Fishery Management Council (PFMC), the National Marine Fisheries Service (NMFS) and the California Department of Fish and Wildlife (CDFW), along with metrics developed by a state economist with the U.S. Department of Agriculture’s Natural (USDA) Resource Conservation Service.
2014 Recreational vs Commercial Salmon
Figure 1. Estimated regional economic impacts of salmon caught in California. Economic impact includes jobs, sales, income, valued added and ripple effects to the economy: NMFS 2016. Fisheries Economics of the United States; PFMC 2015. Review of 2014 Ocean Salmon Fisheries; Ransom, M.M. 2001. Economic Impacts of Salmon Fishing.
The 2014 commercial salmon industry had an overall economic impact of approximately $131 million dollars for the state of California, and harvested 166,486 fish in 2014 (NMFS 2016, PFMC 2015, Figure 1). Commercial fishermen received an average ex-vessel price of $4.74 per pound at the dock. Recreational angling had an economic impact of approximately $73 million in 2014, and fishers harvested 75,225 fish from the ocean and 47,726 fish from the state’s rivers (NMFS 2016, PFMC 2015, Figure 2). In order to compare the relative value of commercial fishing and recreational fishing on a per-fish basis, we developed an estimate of economic impact for each fish caught in the state. This estimate incorporates a metric developed by an economist with the USDA Natural Resource Conservation Service, which was adjusted to reflect inflation and an increased ex-vessel price. Based on this estimate, each salmon caught in-river in 2014 had an economic impact of approximately $1,202* for California in terms of jobs, sales, gross regional product, and ripple effects to the economy. Each recreationally caught ocean salmon in 2013 had an economic impact of approximately $287* for the state, and each commercially caught salmon had an economic impact of $138*.
2014 Economic Impact Per FishFigure 2. Estimated California commercial and recreational economic impact of marine and in-river harvest of salmon source. NMFS 2016. Fisheries Economics of the United States; Ransom, M.M. 2001. Economic Impacts of Salmon Fishing.
While this estimate of the value of a commercial fish is more than our previous estimate because of the increase in ex-vessel price, it is still much lower than the value of a recreationally caught fish. This is primarily a function of fishing effort and the necessarily higher efficiency of commercial fishing: one day of commercial fishing yields many more fish than one day of recreational fishing. We previously suggested that California could use these economics to its advantage by relying more on other Pacific states for commercially harvested salmon, while allowing more salmon to escape to the in-river fishery and natural spawning. Our colleagues from England suggested the same might be true in the UK, where each recreationally caught salmon is thought to contribute 3,000 £ to the local economy – a much greater value than a commercially caught fish. Whatever way you look at it, salmon in California are an economically important and culturally iconic species, and understanding their economic impact can only help in a state where water and fish can be such contentious issues.
This post featured in our weekly e-newsletter, the Fish Report. You can subscribe to the Fish Report here.
*Editor’s note: These values were updated after this Fish Report was originally released to reflect increases from inflation.

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