Is salmon farming moving away from the coast?

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 copper in farms along the coast has gained more attention, as it can be toxic to animals. Salmon farming is considered an environmentally friendly way of producing meat, but land-based farming is better than sea-based, it appears. Land-based farming will have advantages in fish welfare and environmental impact, which should have benefits for their reputation and possibly government regulation. and some costs, cost, fish welfare, and potentially government regulation.

One such government regulation is of course the salmon tax. This certainly won’t hurt the competitiveness of land-based farming either, as it is a tax for the use of coastal resources and does not apply to land-based farming. Nor does “konsesjonsavgiften”, a tax for the regulation of development of hydropower, which sea-based farming also must pay.

The main disadvantage of land-based farming is the use of electricity to maintain water temperatures at suitable levels for the salmon. Although prices are expected to fall a bit in 2023, they are still expected to be higher than normal in Norway.

Mowi maintains in their Salmon Industry Handbook for 2022 that land based farming is still very high risk and with slightly lower potential for industrialization, but this may be about to change. As the world population grows, land-based farming could meet the growing demand for seafood, and then some. But whether supply or demand is the stronger force remains to be seen and the long term effects on salmon prices is not certain. It is nevertheless exciting times ahead for the salmon industry!

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