Grieg Q4 hit by steep rise in production costs

Revenues for salmon producers may be on the rise, but so too are production costs. The 2022 final quarter trading update from Grieg Seafood today shows costs are up sharply on a year ago.

Grieg has reported a reduced harvest from both its Norwegian and British Columbia operations, with Canada down by more than half.

The 2022 Q4 harvest is as follows (Q4 2021 figures in brackets):

  • Norway Rogaland 6,900 tones (7,300 tonnes);
  • Norway Finnmark 12,800 tonnes (12,400 tonnes) and;
  • British Columbia 1,500 tonnes (4,000m tonnes).

This makes a total of 21,200 tonnes for Q4, against 23,700 tonnes in the same period 12 months ago.

But it is average farming costs per kilo in both countries which is likely to raise a few eyebrows. In the case of Finnmark and British Columbia, they have gone up by around 40% over the past 12 months. The Norway Rogaland increase is less, but still high enough, at round 25%.

While revenues remain healthy, the Grieg figures certainly dispel the belief held in some political quarters that salmon companies are currently raking it in.

Cost inflation, which centres around feed, energy and transport, is becoming a big problem for many breeders with little respite in sight.

The Q4 2022 cost per kg figures are (Q4 2021 comparisons in brackets):

  • Norway Rogaland NOK 54.6 (NOK 43.6);
  • Norway Finnmark NOK 54.1 (NOK 38.1) and;
  • British Columbia CA $13.3 ( CA $ 9.4).

The full Grieg Q4 report, including revenues and operating profit, will be published on 16 February.