Loch-ed Profits: Forecast farmed salmon industry growth not converting to stable profit margins
Our latest Tracker Report, Loch-ed Profits, shows that while salmon production is fast approaching the practical physical limits permitted by current coastal farming methods, the industry is still some way from moving to more sustainable and cost-effective methods at scale.
Environmental threats such as climate change, disease, sea lice and harmful algal blooms, compounded by issues such as collapsing wild-catch feedstock fisheries, leave the industry and its investors facing growing financial and concentration risk in the face of increased environmental constraint-based losses and price volatility.
Such price volatility is already apparent due to the COVID-19 pandemic, which has reduced demand for farmed Atlantic salmon (the second most commercially valuable farmed aquatic species and accounting for over 92% of total farmed salmon) and resulted in a 14% decline in spot prices in Q1 2020.
Planet Tracker estimates that if historic trends continue and coastal ecological health continues to decline, total production forecasts for coastal farmed Atlantic salmon to 2025 may be 6% to 8% lower than predicted, equivalent to US$4.1 billion.