Alaska Salmon Byproduct Utilization Project Original Scope
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Original Scope

Abstract
The The Juneau Economic Development Council was the lead organization for the economic scoping of multiple fish waste products including fishmeal, bone meal, fish oil and fish hydrolysate. The cost structure from resource input to market will be determined. Viability of mixing fish waste with wood byproducts (sawdust) will also be explored. The project will benefit southeast Alaskan salmon fishermen; processors, the business community and governmental agencies by providing solid economic information for value added salmon waste products. The two year (2003 and 2004) project was completed with $175,000 and partnerships with the public and private sectors. Also during the course of the project over $8 million was invested by the private sector in by-product projects in the region.

Cooperating Entities:
In the preparation of the project description the following companies and organizations were contacted for input. Industry steering committee: Alaskan Brewing Company, Armstrong-Keta Inc., Alaska Seafood Company, DIPAC, Douglas Indian Association, McDowell Group, Norquest Seafoods Inc., Northern Keta , Alaska Protein Recovery, Seley Corporation, Taku Smokeries, Trident Sea Foods, Southeast Alaska Fisherman's Alliance, Wards Cove Packing Co.

Research support group: Fishery Industrial Technology Center (FITC), National Marine Fisheries Service (NMFS), Scott Smiley, Director, University of Alaska Fairbanks Fishery Industrial Technology Center, Kodiak, AK., Jerry Babbitt, Director, NMFS Utilization Research, Kodiak, AK. 99615.

Agency Cooperators: Department of Environmental Conservation, Ketchikan Gateway Borough

Project Contact: Juneau Economic Development Council

Duration:
Summer of 2002 through the fall of 2004.

Geographic Area:
The project will focus on management and utilization of fish processing wastes at various locations in Southeast Alaska. The population served will be fisherman, processors and businesses in Southeast Alaska. The research, assessment, and development of appropriate utilization technologies will be conducted in part at the Fishery Industrial Technology Center, Kodiak, Alaska.

INTRODUCTION

Many individual fishermen, processing workers and others in fishery support businesses will lose their livelihoods in the next few years if aggressive action is not taken immediately to ensure Alaskan fishery industries remain competitive and profitable. The huge production worldwide of farmed salmon has permanently altered the economics of the salmon fisheries, very noticeably so in Southeast Alaska. Prices for cohos have dropped so low that it is difficult for most trollers to operate at a profit. The availability of year-round inexpensive, fresh salmon has put further downward pressure on already declining consumption and prices for canned salmon as well as fresh and frozen markets for net-caught chum, pink and sockeye salmon. The viability of so many processors is threatened such that many fishermen are facing the daunting prospect of having no buyers at all this coming season. Pink and chum flesh has become a low-value protein commodity that must compete with other protein on world markets. The change in the marketplace, where Alaskans used to be able to treat all species of salmon as a premium product commanding a premium price, to a global market where wild salmon face stiff competition with farmed salmon is undoubtedly permanent.     

One of the competitive advantages farmed salmon enjoy is that 100% of the fish are utilized. Meal companies own many of the largest salmon farms; most of the rest sell all their waste to meal plants to derive value from the entire fish. In contrast, a significant percentage of each wild fish caught in Alaska is thrown away in processing. Besides representing a potential income opportunity, the salmon waste presents a discharge challenge to processors. The federal government has been pursuing enforcement on several major processors in Southeast Alaska with an intensity that may increase over time. The issue of what to do with salmon waste products is a huge one looming on top of the depressed salmon prices.

A bright spot for the industry is the growing market for salmon roe. While roe now represent the main value for both chums and pinks, that value is still capable of supporting only the current depressed prices in our traditional commercial fisheries. There is substantial additional potential value in the harvest of very mature fish with high roe content in terminal fishing areas, such as the late fall pink terminal fisheries held last year in Southern Southeast Alaska or the terminal fisheries at hatcheries. The roe yield can rise significantly in these terminal areas as the fish mature for spawning; the eggs become larger and their quality increases at the same time. Implications for raising the value of the harvest are enormous. The flesh of these mature fish is of little value for traditional markets. Alaska wanton waste laws prohibit the dumping of the carcasses of these fish. Extracting the roe value from these fish without violating wanton waste laws is the crux of this problem.

Addressing the issue of fish waste needs to be a top priority of the salmon industry in Alaska. Currently, no ready buyer of carcasses for fishmeal exists in Southeast Alaska. An alternative process of hydrolyzing salmon carcasses has demonstrated great potential despite problems in its implementation in Southeast Alaska over the past two years. Market development, transportation costs, and the way in which fishing vessels deliver their catches are all variables that pertain to this issue. A comprehensive study of the problem and the range of potential solutions are the focus of this proposal. We propose a scoping study to investigate the economic viability of several waste products including fishmeal, bone meal, fish oil and fish hydrolysate.    

It is important that we strive to fully utilize our fishery resources, but the driving force is economics. The major components of fish wastes are protein, oil, and ash (bone). Production of fishmeal is one way to utilize fish processing wastes since protein is the major component of the wastes. Fishmeal is big business. Last year, total world production of fishmeal was approximately 6.2 mmt (million metric tons) that was produced mainly from direct fisheries, such as anchovy, menhaden, etc. Alaska's production of fishmeal was 57,000 mt (7 shore-side plants- 41,000 mt, 3 motherships- 4,000 mt, and 7 factory trawlers- 12,000 mt), less than 1% of the total world production.

Alaska's fishmeal producers are using conventional fishmeal technology developed for producing fishmeal from whole fish. Consequently, the meal produced is high in ash and low in protein, causing the meal to be low in value. If Alaska is not a major player in the fishmeal business and the value of their meal is low, why are they doing it? It is because shore-side and mothership processors were required to reduce their waste discharges by regulatory agencies. All the factory trawlers with meal plants were built in Norway and when these boats entered the U.S. fisheries, the fishmeal plant came with the boat, hence the meal plants are largely outdated.

Alaska can produce very high-quality products from fish processing by-products because the fish are harvested and handled for human consumption and, therefore, the wastes are fresh. However, the remoteness of the fisheries, availability of space and fresh water, and the high costs of energy (steam and electricity) and transportation present unique challenges to seafood waste recovery and utilization. In addition, demand for specialized products for use in livestock, pet and fish feeds require that new technologies to produce by-products from the processing wastes be developed.

By identifying higher valued markets and developing processes to produce products for these markets, our fish processing wastes can become economical because Alaska has one important advantage. Fish harvested in Alaska is handled carefully because it is intended for human consumption. Thus, the processing wastes are of high quality because they are "fresh". For example, in the mid-1980's, eel farmers reported that their eels liked Alaska's whitefishmeal (meal produced from fish processing wastes) and that they would pay a premium price for the meal, however, the protein content was too low. Thus, the FITC developed a screening system to increase the protein content (and value) of the meal by removing some of the ash. Incidentally, most fishmeal producers in Alaska are using this system today.

Nonetheless, much more can be done with salmon. Large specialty markets are emerging. For example, in 1995, the Fishery Industrial Technology Center conducted a demonstration project using a new technology (an Alfa Laval CONDEC system coupled with a Brown refiner and a KIX dehydrator) to produce a high protein (low ash) meal and high quality oil and bone meal. The project was very successful. They demonstrated that we could make products that would meet the product requirements of these emerging specialty markets. In addition, they are in the final stages of installing a pilot-scale Asta Ltd. hydrolyzing unit in the research facility. Coupling the analytical capabilities of the research facility with over $1.5 million worth of pilot-scale equipment, the Fishery Industrial Technology Center has the capability of producing and characterizing any type of value-added product from fish processing wastes that one could want.

NEED FOR THE PROJECT

A. Statement of Problem

Approximately 60% of the salmon harvested in Alaska is used for human consumption when the fish is canned, fresh or frozen. The remaining 40% is waste (head, fins, viscera, etc.). If salmon are harvested for roe (e.g. chums) as much as 90% of the fish by weight is waste. Historically the waste products were dumped back into the ocean. The Magnuson-Stevens Fishery Conservation and Management Act Title III, 1996 mandated greater utilization of harvested species. EPA and DEC have begun the process to implement changes to how fish processing waste can be handled with the threat that unless significant capital improvements are made at plants they will not be allowed to operate (EPA - Draft General Discharge Permit). Most of the processing plants cannot comply with proposed new EPA rules given existing technology. Economic impacts of decline in this industry would be significant. Seafood harvesting and processing is the largest private sector employer in Alaska. In Southeast Alaska alone over 2,000 jobs can be attributed directly to the salmon industry.

These new laws, combined with a dramatic decrease in the price of salmon due to fish farming, have created a necessity to develop value-added products for economic sustainability of the fishing industry. Increased? Enhanced? Additional? Fish waste products is one solution.

B. Benefit

The project has the potential to keep the industry profitable and prevent unemployment for Southeast Alaskan fishermen and others in the fishing industry. The project will have very tangible and direct benefit to salmon fisherman, processors and communities in Southeast Alaska. As an example, if a value added product with demonstrated economic benefit is identified it will create additional business opportunities as well as provide an economic solution for salmon waste issues. In addition, the list of cooperators in the industry steering committee includes businesses already engaged in by-product utilization, thus the project will benefit these companies immediately by increasing their by-product utilization.

C. Location

The project will focus on the needs and utilization of fish processing wastes at various sites in Southeast Alaska. The production and characterization of value-added byproducts from the fish processing wastes will be conducted at the Fishery Industrial Technology Center, Kodiak, Alaska. Based on need, various equipment components could be placed and operated in plants in Southeast Alaska. For example, the pilot scale Asta Ltd. Hydrolyzing unit is self-contained and capable of handling up to 1,000 lbs of raw product per hour.

PROJECT DESIGN

A. Objectives

The ultimate objective of the project is to identify economically viable means of disposing of salmon waste to optimize the profit potential in the harvested fish. An important piece of this objective is to provide a comprehensive industry analysis to interested businesses that can put waste processing plants into production as soon as possible. Additionally, governments are potentially going to be eager to throw funding at the fisheries crisis when its magnitude has become more apparent to the public. It would be wise for the industry to be ready with viable solutions.

The project will determine the economic feasibility of the use of fish processing byproducts by developing and testing the technologies, develop new technologies and assessing the costs to produce several different end products (fishmeal, bone meal, fish oil and fish hydrolysate) from the fish waste streams in Southeast Alaska. In addition, the potential and strength of the markets for those end products, as well as the cost to get products to the marketplace will be determined. Another objective of the project is to assess the demands for specialized products from salmon waste in Southeast Alaska for use in fertilizers, livestock, pet and fish feeds, human consumption and human personal health care products with their cost structure and applicability.

B. Project Description

Technical Aspects

The work being proposed is best described as a Technology Transfer Project. Coupling technology with a strong analytical component is essential to demonstrate new technologies to the seafood industry. The Fishery Industrial Technology Center is a state-of-the art research facility with all the analytical capabilities to document the chemical, nutritional, quality, and wholesomeness of our fishery wastes and byproducts. In addition, the pilot plant with over $1.5 million worth of pilot-scale equipment can be used to produce any desired by-product from fish wastes; i.e., fishmeal (press cake with or without stickwater fraction), solubles, bone meal, oil, silage, hydrolysate, concentrated hydrolysate, as well as other value-added byproducts. Where the fish wastes are properly handled, a number of byproducts can be produced for human consumption.

Funding being requested will be used to help cover the costs of operating different pilot-scale systems while working with the industry to produce various byproducts, and to determine the best system for handling their fish wastes.

Measurements of success

Overall the goal of the project will be to provide a summary of the economics of salmon waste products and demonstrate the potential for adding value to the waste stream. Investigation of specific products (meal, oil, hydrolysate, etc.) will provide an opportunity to evaluate individual methods. Markets will be researched which will help determine the potential growth of salability for the products. By conducting a market study, Southeast Alaskan salmon products will be measured on a global market scale. If one or more waste product lines are shown to be feasible then the value will be in creating baseline information for Alaska based businesses to capture greater margin from the salmon wastes.

Sustainability of the project

The fundamental information generated and gathered in this project will be a critical foundation to future economic evaluations of salmon waste products. By JEDC coordinating the project, the information will be located in a central place and thus easily added to the knowledge base of the Southeast Alaska fishing industry and disseminated as appropriate in the future. A matrix will be developed for costs and markets for the various products. The inputs for the matrix will be easily revised as market forces change over time. Given trends in the prices of salmon and increasingly widespread discharge regulations the importance of critical evaluation of salmon waste-handling methods is anticipated to grow in the future.

 
Juneau Economic Development Council 612 W. Willoughby Ave., Suite A Juneau, AK 99801-1732 (907) 523-2300 phone; (907) 463-3929 fax www.jedc.org