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The falling growth rate in salmon production

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Norwegian seafood producers are earning more than ever despite significant reductions in amounts sold, both because of a weak currency and high seafood prices. The value of the Norwegian seafood export has hit a new record at 15.7 billion NOK in March. This is a 26 percent increase in revenue from the same time last year. Meanwhile, export volume has fallen by 25 percent compared to the same period last year. The issue is production rather than demand, which has remained high. Export volume has fallen since the talks about the salmon tax began, giving credence to predictions that it will reduce investment in the industry. There has been heavy debate about the tax, many arguing that it will reduce the competitiveness of Norwegian producers. Norwegian banks have also indicated that they will be less inclined to lend money to the industry because of the salmon tax, creating more investment difficulties. The aquaculture growth has however been declining for several years even without the ...
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  How does the future of the Norwegian salmon industry look like?           In September 2020, the Norwegian administration proposed a new tax idea for salmon and trout producers, and it would come into introduction from 1 st January 2023. A new proposal is expected in March 2023, with a view that the bill is likely to be fully operational by late Q2-2023. The tax incentive was to ensure that some of the value-added profits generated by the industry will contribute to greater social benefits, especially to the coastal communities that accommodate salmon aquaculture. However, fears for industry growth and investment opportunities remain questionable as the salmon tax could harm the industry in terms of production, investment, and prices. Lower capital investment & value-added production           The Norwegian Seafood Federation estimates that approximately 35 billion NOK worth of capital investment were cancelled duri...
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Forecast uncertainties in the soy market

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The outlook for soybeans for 2023 is one of growth, with an expected increase in acreage used, according to estimates by the World Bank. Combined acreage of corn, wheat and soy is projected at nearly 3 percent higher than 2022. Prices are expected to fall relative to 2022 but remain high compared to the historical average. There are however uncertainties in the market which could drive up prices. Continued forecast of la Niña weather conditions could cause drought and bad harvests in the USA. The US produces 34 percent of the global output of soybean. There have also been historically low export levels of soybeans from the US due to prices there being above the world market. This is because demand is driven up by the biofuel industry, which uses soy oil. Competition in the biofuel industry is expected to increase and be a key driver of soybean prices in the US. Meanwhile, China, the biggest consumer of soy, has low reserves and need restocking, according to S&P Global. Demand from...
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Salmon Evolution or Plant-based Alternatives?

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While the debate between land-based, offshore, and wild salmon farming is raging, a new approach is currently trending within the aquaculture industry: plant-based salmon substitutes. Offshore farming carries high transportation costs and might still have sea lice problems, land-based production has high energy costs, and wild salmon has a very limited supply. And now, new Swedish research shows that the environmental impact of salmon production in Norway has been underestimated. The Swedish researchers found issues such as heavy metals and toxins from fishmeal, the use of pesticides to combat diseases, as well as farming conditions that can cause eutrophication (excessive richness of nutrients in the seabed, causing harmful algal blooms, dead zones, and fish death). Fishmeal now contains a much higher percentage of vegetable ingredients than it used to, which affects the level of Omega-3 fatty acids, selenium, and vitamin D, making farmed salmon less nutritious. Although the transiti...
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Is salmon farming moving away from the coast?

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Salmon Evolution is now reporting that they expect to make the first profitable land-based operation of salmon farming in the second quarter of 2023 . Within the third quarter, they expect to be competitive against sea-based farming, says CFO Trond Haakon Schaug-Pettersen. Profitability on a large scale has not yet been achieved for land-based production, and we may be seeing the beginning of a shift in the industry in the near future. The main reason why this is happening now is the maturity of technologies which reduces the cost of land-based farming. The main advantage of this technique is the complete control over the environment, which means no sea lice or other diseases, as well as no flooding or escaped salmon. Sea lice in particular is a very significant cost of farming on the coast, and the number of fish deaths from diseases increased in 2022 compared to 2021 . And new research indicates that the danger of sea lice has been underestimated . In addition to this, the use of co...
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Welcome to Salmon and Soy commodity blog!

Welcome onboard! We're three students at the NMBU School of Economics and Business specializing in Financial and Commodity market analysis. In this blog, we focus on analysis concerning the Salmon and Soy market based on news/events/discussions. We hope to gain insights into the market and help readers get immediate updates in the next couple of weeks. Engagement and criticism are strongly encouraged by our readers. Enjoy!
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