The Grounds for Seafood Pricing

Sonia - June 14, 2017

You may have noticed that prices of seafood are on the rise everywhere. If you’ve ever wondered why this is happening and how prices are set, we’ve got the inside scoop below.


It takes a lot to unravel seafood prices. Our family has been fishing for almost 50 years and we’re still learning about how seafood pricing works.


World seafood markets involve long, convoluted supply chains, fluctuating seafood scarcity and abundance, international consumer demands, and regulations that vary from country to country. In a nutshell, the seafood industry works hard to pay as little as possible for seafood at its point of origin making room for additional costs and profit margins along the way. Where Skipper Otto’s differs is starting with a fair, living wage for fishing families, keeping our costs as low as possible, and offering competitively priced seafood to our members. It’s a fairly radical departure from business as usual in the seafood industry! Read the story of why we started the CSF model on our site.


BC fishermen are typically paid based on something called the “grounds price.” This “going rate” for any variety of seafood fluctuates from day-to-day and week-to-week throughout the fishing season. Can you imagine going to work with no idea of what you’ll be paid? That’s what happens to independent fisherman, who also pay a lot of money up front for licenses and quotas, boat repairs and maintenance, insurance, fuel, gear, and monitoring equipment. They fish when and where the Department of Fisheries and Oceans (DFO) allows them. Then they offload to a buyer who sometimes announces the price to them when they are offloading and pays them the grounds price on the spot. But it’s also quite common for fishermen to offload their fish and not be told the grounds price – they’re just paid a deposit, and then have to wait to be “topped up” to whatever price the company eventually decides upon, sometimes up to 9 months later.


Grounds prices are set by world market buyers, influenced by such complex global economics as US exchange rates, demand in Asia, and fluctuations in abundance of various seafood species around the world.


And while it costs a fisherman roughly the same to catch a variety of species of fish throughout the year, the grounds prices can fluctuate wildly and without warning. Let’s use sockeye salmon as an example. In 2010 there was a record-breaking return of sockeye salmon on the Fraser River, and international markets were flooded with sockeye, which meant the grounds price dropped to 90c/lb! In contrast, this year, when sockeye returns are expected to be low, our friends fishing the very first world sockeye salmon opening in Copper River, Alaska, reported that the grounds price started at $8USD/ lb (that’s $10.75 Canadian/lb)! That price dropped after just a couple of weeks when other sockeye salmon began to come onto the markets, and it will drop even further if there is an abundance of sockeye anywhere in the world this year.


Whether they’re getting paid 90c/lb or $10/lb, a fishermen’s costs remain the same. When there aren’t as many fish to catch, they may be paid more per pound, but when the price/ lb drops they have to catch twice as many fish, working twice as hard, just to make the same wage. You can imagine how hard this makes it for fishing families to make a predictable, stable living wage year after year! And why there are fewer and fewer independent fishermen in an industry that’s rapidly becoming dominated by big business and aquaculture.


At Skipper Otto’s, we’re a tiny player in the global seafood industry. We endeavour to pay a fair price to fishermen and still charge a competitive price to our members. But we’re still tied into global market prices. In an ideal world, fishermen would be paid the same for a sockeye or a chum or a pink salmon, because they work just as hard and their costs are the same to catch each of those species. And in that ideal world, customers would be happy to pay the same fair price for all five species of salmon, based just on what it costs to catch them. But we’re realists and we know folks would be delighted to pay less for sockeye, but naturally, they wouldn’t buy pink salmon if it was priced significantly higher than they could get it at the grocery store.


And so we work a careful juggling act, using our values as a compass to ensure that we are treating both our fishing families and our member families with the respect they all deserve. We pay our fishermen as well as we can while keeping our member prices as low as we can, never sacrificing our values to do so. There will always be someone who finds a particular piece of fish for less than we charge at Skipper Otto’s, and we can’t promise you that our prices will always be the lowest, but we can promise you that they are the most fair. And we can promise that we will always explain why prices are what they are.


Thank you for giving us your trust! It’s because of members like you who share our values and trust us to make the tricky decisions based on our values and our knowledge that we are able to make small but real, incremental change toward a more just and sustainable seafood system!


Interested in learning more about why seafood prices fluctuate the way they do? Then you might be interested in the following stories from our blog:


Sonia - June 14, 2017

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The Grounds for Seafood Pricing

Sonia - June 14, 2017

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