Testing for market power in the UK salmon retail sector

Abstract

This paper presents an investigation into the structure of the salmon retail market in the UK. Evidence of the potential for market power is analysed using non‐linear three‐stage least squares to estimate a dynamic error correction model (ECM) following Bresnahan (1982) and Lau (1982) theoretical approaches. Results indicate that the system is well represented by the model and that the market is competitive in both the short and long run. This is the first study using this approach for the UK fish market and our conclusions support findings from previous empirical analyses of the food retail market, albeit using a different methodology.     

The spot-forward relationship in the Atlantic salmon market

This study examines the Fish Pool salmon futures contract with respect to how well the market performs in terms of the futures price being an unbiased estimator of the spot price and whether the market provides a price discovery function. Using data for 2006–2014 and with futures prices with maturities up to 6 months we find that spot and lagged futures prices are cointegrated and that the futures price provides an unbiased estimate of the spot price. We also find that, with the exception of the front month, that the causality is one-directional. The spot prices lead futures prices between 1–6 months maturity. Hence, while the spot and lagged futures prices are unbiased estimates, we do not find support for the hypothesis that futures prices provide a price discovery function. Rather, it seems that innovations in the spot price influence futures prices. This finding is not uncommon in new and immature futures contracts markets. Hence, the salmon futures market is still immature and has not yet reached the stage where futures prices are able to predict future spot prices.     

Forecasting weekly salmon prices: Risk management in fish farming

Abstract

Production of farmed salmon has increased substantially during the last decade. Most of the salmon production is sold spot, resulting in large price fluctuations both for the producer and for the exporter. No derivative markets exist; consequently, no one can hedge prices. If prices could be forecasted within reasonable confidence bounds, risk would be reduced. This study used six easily applicable procedures to forecast weekly producer prices for salmon. The procedures tested were Classical Additive Decomposition (CAD), Holt Winters Exponential Smoothing (HW), Auto Regressive Moving Average (ARMA), Vector Auto Regression (VAR) and two different naïve models: post‐sample predictive accuracy was evaluated. Results indicated that the CAD model forecasted the direction of price movements best, whereas the VAR model performed best according to accuracy measures.     

From Atlantic to Pacific: Price links in the US wild and farmed salmon market

Abstract

In 1990, the US International Trade Commission stated that Atlantic and Pacific salmon species did not share a substitute relationship in any of the product forms. This result is contrary to economic demand studies that show a substitute relationship for Atlantic and Pacific salmon species. Time‐series results reported in this paper are consistent with the earlier demand studies and show evidence of an equilibrium price system that includes Atlantic, chinook and coho salmon species for the US market. For these three salmon species a substitute relationship cannot be rejected. However, we observe only weak price links across the three different species in the different US regional markets.     

Price transmission among different Atlantic salmon products in the U.S. import market

The cross-commodity price transmission is an approach to derive meaningful results from the price information, and is mostly influenced by the substitutability and complementary relations among products. Using time series data collected from the National Marine Fisheries Statistics, the present study specified and estimated cross-commodity price transmission models for 13 salmon products imported in the U.S. market. The salmon products are differentiated by form, cut, source/origin, and production environment. The estimated cross-product price transmission elasticity and degree of substitutability among them varied considerably. Whole fresh farmed Canadian and Norwegian Atlantic salmon did not have any close import substitutes in the U.S. market among the salmon products considered in the study. A reduced pricing strategy would result in an increase in U.S. salmon import market share of Chilean and U.K. Atlantic fillet fresh, if the U.S. import demand for it is relatively own-price elastic.     

A metapopulation perspective for salmon and other anadromous fish

Salmonids are an important component of biodiversity, culture and economy in several regions, particularly the North Pacific Rim. Given this importance, they have been intensively studied for about a century, and the pioneering scientists recognized the critical link between population structure and conservation. Spatial structure is indeed of prime importance for salmon conservation and management. At first glance, the essence of the metapopulation concept, i.e. a population of populations, widely used on other organisms like butterflies, seems to be particularly relevant to salmon, and more generally to anadromous fish. Nevertheless, the concept is rarely used, and barely tested. Here, we present a metapopulation perspective for anadromous fish, assessing in terms of processes rather than of patterns the set of necessary conditions for metapopulation dynamics to exist. Salmon, and particularly sockeye salmon in Alaska, are used as an illustrative case study. A review of life history traits indicates that the three basic conditions are likely to be fulfilled by anadromous salmon: (i) the spawning habitat is discrete and populations are spatially separated by unsuitable habitat; (ii) some asynchrony is present in the dynamics of more or less distant populations and (iii) dispersal links populations because some salmon stray from their natal population. The implications of some peculiarities of salmon life history traits, unusual in classical metapopulations, are also discussed. Deeper understanding of the population structure of anadromous fish will be advanced by future studies on specific topics: (i) criteria must be defined for the delineation of suitable habitats that are based on features of the biotope and not on the presence of fish; (ii) the collection of long‐term data and the development of improved methods to determine age structure are essential for correctly estimating levels of asynchrony between populations and (iii) several key aspects of dispersal are still poorly understood and need to be examined in detail: the spatial and temporal scales of dispersal movements, the origin and destination populations instead of simple straying rates, and the relative reproductive success of immigrants and residents.     

On the drivers of cost changes in the Norwegian salmon aquaculture sector: a decomposition of a flexible cost function from 2001 to 2014

Abstract

Since 2005, Norwegian salmon farmers have experienced increasing unit costs, contrasting pre-2005 trends characterized by innovations, rapid productivity growth, and diminishing unit costs. This article investigates these cost changes using a panel of salmon producers. The drivers behind cost changes in the industry are identified for the period of 2001–2014 using a flexible cost function. In particular, it is explored how cost changes can be attributable to scale economies, negative productivity shocks, production expansion, and input prices. The results indicate that cost increases in the sector are affected by external factors out of the control of individual firms such as input prices and environmental conditions like sea lice.     

Management actions in relation to the controversy about salmon lice infections in fish farms as a hazard to wild salmonid populations

Risk analysis provides a logical strategy for the identification of hazards in an area of concern leading to their management. This approach has rarely been used for research studies on the possible links between salmon lice in fish farms and variations in wild salmonid populations. Although correlation has been found between some data sets, a series of international meetings of experts has not been able to establish cause–effect relationships between lice on farms and the current low level of salmonid stocks in Europe and eastern Canada. Research in this area is currently in progress in western Canada. Views on the meaning of the correlations found have become highly polarized in both the scientific and non‐scientific communities, with the same data often being interpreted in different ways. Farm lice levels are being managed by industry codes and by official strategies in Europe, but these programmes have not so far resulted in associated benefit to the size of wild salmonid stocks. The large array of factors that cause variations in both the size of fish stocks and the level of fish diseases is frequently overlooked. Using a risk analysis approach, the key contributory factors may be identified and appropriate remedial management actions designed to meet achievable objectives. Regular assessment of the effectiveness of the measures introduced would then be possible.     

Dietary protein/energy ratios for Atlantic salmon in relation to fish size: growth, feed utilization and slaughter quality

Four extruded diets differing in protein/fat concentrations, 378/389 g kg^?1, 425/346 g kg^?1, 480/308 g kg^?1 and 524/256 g kg^?1 were tested in a digestibility trial and a growth study. Apparent digestibility of protein and fat were not significantly different among the diets when tested in 1-kg Atlantic salmon, Salmo salar L., in sea water. The diets represented a range of digestible protein to digestible energy ratios (DP/DE ratios) of 14.1, 16.4, 18.8 and 21.9 g MJ^?1. The 138-day growth study was performed with triplicate groups of Atlantic salmon of 1.0 and 2.5 kg initial weight. Irrespective of size; growth, feed conversion ratio (FCR), nitrogen and energy retention were poorer in fish fed the diet with DP/DE ratio of 14.1 g MJ^?1 compared with the fish fed the other diets. A DP/DE ratio of 16.4 g MJ^?1 was sufficient to produce maximum growth for the large fish, while the DP/DE ratio of 18.8 g MJ^?1 produced the highest growth in the small fish. In the large fish, the lowest FCR was obtained on a DP/DE ratio of 16.4 g MJ^?1, while there was no clear difference in FCR within the small fish when diets of DP/DE ratios of 16.4–21.9 g MJ^?1 were fed. The carcass-to-body ratio in the small fish decreased with decreasing DP/DE ratios. The fish fed the diet of 21.9 g MJ^?1 had significantly lower fat and dry matter and higher protein content than fish of similar size fed the other diets. Increased dietary lipid content seemed to improve astaxanthin deposition in the small fish, while the large fish showed no significant differences in astaxanthin deposition due to dietary treatment. This study indicates that a DP/DE ratio of 14.1 g MJ^?1 in high-energy diets for Atlantic salmon in sea water is below the optimal DP/DE ratio for growth and feed utilization, and that the optimal DP/DE ratio decreases with increasing fish weight. DP/DE ratios around 19 g MJ^?1 for fish weighing 1 to 2.5 kg, and 16–17 g MJ^?1 for fish weighing 2.5 to 5 kg, are suggested to be optimal.     

Economic values of supply chain productivity and quality traits calculated for a farmed European whitefish breeding program

Economic values of different fish traits are needed to direct breeding programs to optimize economic benefits for aquaculture industry. The aim of this article is to highlight and calculate how different traits affect the value of farmed fish supply chain. Supply chain approach is needed to calculate economic impact of fish traits because several fish traits affect costs and returns not only in fish farming but also at the processing and retail level. In this article, economic values are calculated for 14 productivity and product quality traits in European whitefish (Coregonus lavaretus). Productivity affecting traits, such as growth, mortality and different yields, are included in the study. In addition, economic values are calculated for several quality traits like fillet gaping, appearance and fat content of flesh.

Productivity traits had the highest economic importance if the traits could be improved. However, quality traits may cause even higher economic losses, if the quality decreases. Thus, the management of the breeding program should pay simultaneous attention to both quality and productivity traits.     

Studies with experimental transmission of heart and skeletal muscle inflammation in Atlantic salmon, Salmo salar L.

Heart and skeletal muscle inflammation (HSMI) is a transmissible disease causing mortality in farmed Atlantic salmon, Salmo salar L. It is characterized by epi-, endo- and myocarditis and myocardial necrosis, as well as myositis and necrosis of red skeletal muscle. The present paper describes two infection experiments, with the aim of further exploring the infectivity and pathogenesis of HSMI. In both experiments, Atlantic salmon were intraperitonally injected with putatively infective material. The first experiment was carried out in fresh water, using cardiac tissue, blood plasma and cell cultured material as inoculates. In the second experiment, various tissues sampled from fish in the mid-outbreak phase were used to inoculate experimental fish in sea water. Also, cardiac tissue sampled before and after the outbreak phase was used. Finally, cardiac tissue pre-treated with chloroform was tested. In both experiments, all inoculates resulted in cardiac inflammation during the study period of 8 weeks. Early cardiac changes included perivasculitis and endocarditis, which were observed from 1–3 weeks post-challenge (p.c.). Focal myocarditis first appeared 3 weeks p.c., and the number of fish showing myocardial changes at 8 weeks p.c. was high in all groups. A possible mechanism for the development of HSMI is discussed.     

Effects of graded levels of medium chain triglycerides and cysteine on growth, digestive processes and nutrient utilization in sea water reared Atlantic salmon (Salmo salar, L.) under ad libitum feeding regime

Fifteen experimental diets with five levels of medium chain triglycerides (MCT) (0, 39, 78, 117 and 156 g kg^?1) and three levels of cysteine supplementations (0.0, 2.5 and 5.0 g kg^?1) were fed ad libitum to Atlantic salmon (mean weight at start 846 g) in sea water for 71 days. Nutrient digestibilities and protein retention improved significantly with increasing dietary MCT level following simple linear regression models. Positive effects were also observed on proteolytic enzyme activities in chyme of the pyloric region with peak value around 117 g kg^?1 MCT. However, strong inverse relationships were observed between MCT level and feed intake, growth, body lipid and energy retention, and these effects accelerated with increasing MCT level. Also chyme dry matter decreased with increasing MCT level which also seemed to stimulate pancreatic and bile secretion. MCT did not significantly affect condition factor, dress out percentage, relative liver size or pH in gastrointestinal contents. The only significant effects of dietary cysteine supplementation were increased enzyme activities in chyme of the pyloric region with peak values for the intermediate cysteine level. The results elucidate the importance of diet composition for digestive functions, production efficiency and composition quality.     

Reducing the levels of dioxins and dioxin-like PCBs in farmed Atlantic salmon by substitution of fish oil with vegetable oil in the feed

Atlantic salmon were fed extruded diets based on either 100% fish oil (FO) or 100% vegetable oil blend (VO) substitution for 22 months. A total of seven distinct feeding periods were studied that incorporated higher levels of dietary oil inclusion, and larger pellet size as fish size increased. Whole fish levels of polychlorinated dibenzo‐p‐dioxins and dibenzofurans (PCDD/F) and dioxin‐like PCBs (DLPCB) were analysed at the beginning and end of each of the seven feeding periods. The PCDD/F and DLPCB concentrations in the FO diets increased from 2.43 to 4.74 ng WHO‐TEQ kg^?1 (TEQ, toxic equivalents), while VO diets decreased from 1.07 to 0.33 WHO‐TEQ kg^?1 as oil inclusion increased. Partial least square regression analyses identified feed concentration, growth rate and feed utilization, but not variations in lipid content, as factors significantly affecting fish PCDD/F and DLPCB levels. Accumulation efficiencies for DLPCB (740 ± 90 g kg^?1) were significantly (P < 0.01) higher than for PCDD/F (430 ± 60 g kg^?1), explaining the increasing dominance of DLPCB levels over PCDD/F levels in whole fish (DLPCB : PCDD/F ratio of 2.4 ± 0.1 for both VO and FO fed fish) compared with feed (DLPCB : PCDD/F ratio of 1.5 and 0.34 for FO and VO feed respectively). Vegetable oil substitution significantly reduced the level of PCDD/F and DLPCB (eightfold and twelve‐fold, respectively) in the fillet of a 2 kg salmon, but, also negatively affected beneficial health components such as fillet n‐3/n‐6 fatty acid ratio.     

From salmon to shad: Shifting sources of marine‐derived nutrients in the Columbia River Basin

Like Pacific salmon (Oncorhynchus spp.), nonnative American shad (Alosa sapidissima) have the potential to convey large quantities of nutrients between the Pacific Ocean and freshwater spawning areas in the Columbia River Basin (CRB). American shad are now the most numerous anadromous fish in the CRB, yet the magnitude of the resulting nutrient flux owing to the shift from salmon to shad is unknown. Nutrient flux models revealed that American shad conveyed over 15,000 kg of nitrogen (N) and 3,000 kg of phosphorus (P) annually to John Day Reservoir, the largest mainstem reservoir in the lower Columbia River. Shad were net importers of N, with juveniles and postspawners exporting just 31% of the N imported by adults. Shad were usually net importers of P, with juveniles and postspawners exporting 46% of the P imported by adults on average. American shad contributed <0.2% of the total annual P load into John Day Reservoir, but during June when most adult shad are migrating into John Day Reservoir, they contributed as much as 2.0% of the P load. Nutrient inputs by American shad were similar to current but far less than historical inputs of Pacific salmon owing to their smaller size. Given the relatively high background P levels and low retention times in lower Columbia River reservoirs, it is unlikely that shad marine‐derived nutrients affect nutrient balances or food web productivity through autotrophic pathways. However, a better understanding of shad spawning aggregations in the CRB is needed.     

Survival of Atlantic salmon captured in and released from a commercial trap-net: Potential for selective harvesting of stocked salmon

The major wild Atlantic salmon stocks in the Baltic Sea began to recover in the late 1990s. This recovery has been partly due to strict regulations in the Gulf of Bothnia that effectively prevent salmon fisheries during the peak migration. About half of the migrating salmon, however, are reared fish that could be harvested. We simulated a limited trap-net fishery that selectively harvested reared salmon and released wild fish, and studied the survival and migration of the released salmon. We tagged and released 1970 salmon caught in the trap-nets along the coast in 2001 and 2002. The mean maximum capture and release induced mortality of salmon was 11%, ranging between 4% and 21% in different release groups by year, sea age and number of releases. The cumulative mortality for the total salmon population on their spawning migration in the Gulf of Bothnia was below 5%, and it would not increase considerably after the first capture and release events, provided fishing effort is not excessive and fish are handled properly. Survival of trap-net captured and released Baltic salmon appears high and their migration behavior is not altered due to this handling. Several preconditions, however, should be considered before selective fishing is introduced in the Gulf of Bothnia salmon fishery.     

Effect of thyroid-stimulating hormone on the physiology and morphology of the thyroid gland in coho salmon,Oncorhynchus kisutch

Activity of the thyroid gland of the coho salmon,Oncorhynchus kisutch, was assessed by physiological, histological and ultrastructural criteria after treatment with graded doses of bovine thyrotropin (bTSH) in January and March. Average plasma thyroxine (T₄) levels increased from about 0.8 ng/ml in saline-injected controls to about 15 ng/ml in fish treated with four intraperitoneal injections of 0.8 lU bTSH. Light-microscope observations of one m-thick sections stained with methylene blue and azure II, showed that bTSH treatment increased epithelial height in both presmolts and smolts. Ultrastructural manifestations of increased activity owing to bTSH treatment were also seen, along with evidence of follicle proliferation. Cytoplasmic organelles and secretory granules increased in numbers with increased dosage of bTSH.     

Effect of gelatinized wheat and maize in diets for large Atlantic salmon (Salmo salar L.) on glycogen retention, plasma glucose and fish health

This publication reports on analytical data from a large-scale experiment, using 3360 Atlantic salmon, Salmo salar L., distributed into 12 sea cages. Salmon were grown from an average 600 g to an average 3.5 kg. Samples for analyses were taken when fish were in the range of 1.8 and 3.5 kg. Dietary changes between groups were increased starch from 24 to 230 g kg^?1 and balanced with protein. The diets were isolipic. All salmon showed small stores of glycogen in all analysed organs, and only in heart, gills and kidney of large fish (3.5 kg) were the levels correlated with dietary starch. Minor differences between groups were found in liver NADPH production, but with substantially decreased NADPH production per g protein as the fish grew from 1.8 to 3.5 kg, indicating that increasing dietary starch did not lead to induction of liver hexokinase, and that the activity of this enzyme may decline as fish size increases. An increase in plasma glucose concentrations was found as dietary starch increased, but all levels were moderate and ranged within reference values. Plasma total protein concentrations did not, however, vary according to decreased dietary protein, but increased substantially in all groups as the fish grew from 1.8 to 3.5 kg. Dietary treatments had no influence on haematological parameters, except for decreased haemoglobin concentrations as dietary starch increased in large fish (3.5 kg). No impared liver function was detected, evaluated by activities of ASAT, ALAT and LDH, and by histological analyses. Low serum lysozyme activities were recorded in all groups, and were not correlated with plasma glucose or liver glycogen concentrations.     

Marine ornamental fish imports in the European Union: an economic perspective

The marine ornamental fish trade (MOFT) is a worldwide industry that targets a remarkable quantity and diversity of reef fish species and provides an important source of revenue for exporting countries, particularly developing nations in Southeast Asia. Here we provide, for the first time, an economic assessment of the MOFT to the European Union (EU), one of the key players of the marine aquarium trade, along with the USA and Japan. Data from EUROSTAT (the European Statistical System) was analysed for the MOFT between 2000 and 2011. Results show that this industry was not affected by the economic crisis and accounted for a total of 135 million Euros during the study period. Both the UK and Indonesia have been reinforcing their importance as leading importer and exporter countries, respectively. The long‐term temporal pattern of the MOFT by EU and non‐EU countries is described, as well as its diversity and evenness between importing and exporting countries. The present economic assessment also identifies the key players of this industry, and ultimately contributes to management and conservation practices that may enhance the sustainable use of world's coral reefs.