‘Dark clouds’ threatening salmon profits
THE recent golden era for salmon and rainbow trout farming could be coming to an end – at least for the time being, said the Norwegian Directorate of Fisheries. The main reason would seem to be the rising cost of production.
The Directorate said the last year was the best period for operating profit margins since figures started to be compiled in 1982, increasing from 19.4 per cent in 2015 to 36.3 per cent in 2016.
But it warned that ‘dark clouds’ are threatening future profitability.
Liv Holmefjord, the Directorate’s chief officer, said that only twice before has the industry recorded operating profits of more than 30 per cent – in 2006 and 2010.
She said that despite a very good economic performance in 2016, profitability results showed cost levels were increasing and now becoming quite high.
This meant the industry was more dependent on high salmon prices in order to achieve good profitability.
The Directorate found that average production cost per kg had risen by 18.6 per in the 12 months between 2015 and 2016 and was averaging just over NOK 31 per kg at the end of last year.
Other kinds of costs were also rising. The Directorate’s survey showed that production per ‘man years’ had also fallen over the same 12-month period, which meant that more employees are now needed to produce the same amount of fish.
The Directorate said it will publish fuller details of salmon farming production costs and profit performance in the late autumn.
Picture: Liv Holmefjord, the Norwegian Directorate of Fisheries chief officer