Production Costs vs Market Value Fishyness
Updated: Mar 9, 2019
Scottish Salmon Exports Down 16% !
You’d be forgiven for expecting exports of Scottish Salmon to be through the roof, considering the Government & private investment, the “huge demand”, the “growth” and other PR spin the SSPO keeps feeding the public. But now the figures are out, is this just another example of the industry running like a Ponzi scheme, or cartel at the very least?
Right now, production costs for Salmon are about £3.35/kg and it sells for about £6/kg. Yes, you can pay over £55/kg in Harrod’s or wherever, but it’s pretty much all the same poor quality fatty, dyed pink sludge.
Some commentators have suggested that Salmon could be a “loss leader”, enticing shoppers in to budget supermarkets for their cheap protein fix and hoping they might panic-buy a canoe on the way out....
The reality is that production costs look set to overtake market price. The desperation for investment, offering “R&D” deals which in turn present tax relief opportunities for investors, is palpable. It’s almost embarrassing. This, after all, is supposed to be Scotland’s “most lucrative food export”.
One more devastating year of “poor weather”, “hot weather”, “lice infestations coming from wild fish” (🙄) etc and they will have to push the market price beyond the “cheap protein” mark. Unfortunately, as the product is so bad, there is zero chance of hyping it to the “luxury” status that wild Salmon once was - despite the efforts thus by the SSPO.
There is something fishy going on. How long will it be before production costs exceed market price and some kind of "price fixing" is evident. That's if it hasn't happened already.
Anyway, here’s the industry news on why exports dipped: