ECONOMIC FEASIBILITY OF DOMESTIC GROUNDFISH HARVEST FROM 



WESTERN ALASKA WATERS: A COMPARISON OF VESSEL TYPES, 



FISHING STRATEGIES, AND PROCESSOR LOCATIONS 



C. M. Lynde' 



ABSTRACT 



An economic model relating fishing costs to vessel characteristics and operating conditions was used to 

 estimate the costs and benefits to U.S. fishermen of harvesting groundfish under a variety of conditions. 

 Comparisons were made between 1) two vessel types, 2) two modes of operation: delivering to a floating 

 processor and delivering to a shore-based processor, and 3) three fishing strategies in Alaskan waters. 



Fishing costs were about 50% less and fuel efficiency was 28% higher for the smaller of the two 

 vessels. Costs for either vessel decreased by 30% and fuel efficiencies increased by 35% when delivering 

 the catch to afloatingprocessor rather than delivering to port. Cost estimates for both sea delivery and 

 port delivery were sensitive to changes in fuel price. A $0,026/1 ($0.10/gallon) increase in fuel price 

 increased the break-even ex-vessel prices by $6/t for sea delivery and $8/t for port delivery in one 

 example. 



Given the ex-vessel prices currently offered by two joint venture firms and a fiiel price of $0,277/1 

 ($1.05/gallon), break-even catch rates were calculated for each vessel type and targeting strategy, 

 assuming sea delivery. All of the catch rates were considered highly feasible when compared with the 

 average catch rates of foreign trawlers and experimental U.S. fisheries in the area. Assuming similar 

 prices were offered by shore-based processors, the break-even catch rates, although higher than under 

 the sea delivery mode, were still considered feasible. However, the margin for profit is narrower and 

 could be negative with increases in fuel price. 



Since the implementation of the U.S. 200 mi 

 economic zone (public law 94-265, 13 April 1976), a 

 great deal of interest has been generated by the 

 large stocks of groundfish off the western Alaska 

 coast. The combined annual optimum yield of 

 walleye pollock, Theragra chalcogramma; Pacific 

 cod, Gadus macrocephalus; sablefish, Anop- 

 lopoma fimbria; flatfish, and rockfish from the 

 eastern Bering Sea, Aleutians, and western Gulf 

 of Alaska (Kodiak Island westward; Figure 1) has 

 been estimated to be over 1.6 million t (North 

 Pacific Fisheries Management Council 1978a, b). 

 In perspective, this potential is equivalent to 58% 

 of the total 1978 U.S. commercial landings of all 

 species from all areas (U.S. Department of Com- 

 merce 1979). Although the Fisheries Conservation 

 and Management Act of 1976 grants preference to 

 U.S. harvesters over foreign fishing fleets, a 

 domestic trawl fishery for groundfish has been 

 slow to develop, and the precise set of conditions 

 necessary to stimulate growth has been a topic of 

 considerable concern (Sullivan and Heggelund 



1979; Gorham^; Little^; Alaska Fisheries Devel- 

 opment Foundation"*; Combs^). 



In this paper I demonstrate the utility of an 

 economic model which estimates fishing costs 

 based on vessel characteristics and operating con- 

 ditions. The model is used to predict the fishing 

 costs and the catch rates required to cover costs 

 under conditions that are likely to occur during 

 future domestic groundfish harvests from western 

 Alaska. These catch rates are then compared with 

 actual catch rates observed in foreign and experi- 

 mental domestic fisheries in the area. In this way I 

 seek to contribute to the development of an appro- 

 priate methodology for evaluating the economic 

 feasibility of domestic groundfishery expansion in 

 Alaska. 



'Center for Quantitative Science in Forestry, Fisheries, and 

 Wildlife, University of Washington, Seattle, WA 98195. 



^Gorham, A. H. 1978. Interim report on an investigation of 

 joint U.S. /foreign ventures in the developing commercial fishery 

 off Alaska, 12 p. Submitted to the North Pacific Fishery Man- 

 agement Council. 



^Little, A. D. 1978. The development of a bottomfish indus- 

 try: Strategies for the State of Alaska, vol. 1, 33 p. 



""Alaska Fisheries Development Foundation. 1978. De- 

 velopment proposal for bottomfish off Alaska, 37 p. 



^Combs, E. R. 1979. Prospectus for development of the 

 United States fisheries. Alaska groundfish, p. 25-112, 327-362. 

 Prepared for Fisheries Development Task Force, NMFS, NOAA. 



Manuscript accepted November 1980. 

 FISHERY BULLETIN: VOL. 79, No. 2, 1981. 



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