<p>Permit broker Olivia Olson says Alaskan fisherman tend to buy into fisheries when they have high profit margins and sell their permits when the value drops. </p>
<p> “In Alaska, now this isn’t just Alaskans, but the guys with Alaskan permits, they’re moving around. They’re watching what are the hot fisheries and they’re more aggressive fisherman when it comes to following the new trends and the hotter fisheries.” </p>
<p>The ‘hot’ fish this season is salmon and Southeast fishermen are certainly following the trend. So far this year, Southeast seine permits are at their highest levels since 1993. The average value of a permit in the first five months of 2011 was $123,000, $36,000 more than the 2010 average. </p>
<p>Economist Gunnar Knapp says the price reflects fishermen’s optimism about the season. </p>
<p> “It sounds like people are feeling pretty good if they keep bidding up the price. What people pay for permits reflects how profitable they think the season will be.” </p>
<p>With the Alaska Department of Fish & Game predicting an above-average pink harvest and analysts predicting high prices on the docks, seiners are certainly optimistic. But they might also have a hand in their own good fortune. </p>
<p>Salmon seining is a limited entry fishery, which means the State issues permits which can be bought, sold, and traded, but whose overall number stays the same from year-to-year. </p>
<p>But in 2008, Congress approved $23.5 million in federal loans to buy back a large number of Southeast seine permits. The Southeast Revitalization Association is coordinating the proposed plan. According to SRA manager Rob Zuanich, permit prices have increased in anticipation of a potential buyback. Zuanich says the reason is simple supply and demand. </p>
<p> “If those latent permits are removed, then you have a smaller supply and like any commodity, if there is demand for it, then that’s going to increase the price. And this program would certainly reduce what I think is now an oversupply of permits, given that not all the permits are being fished.” </p>
<p>But with forecasts for a good season this year, the number of permits being fished might be on the rise. </p>
<p> “Rumors are talking 300. Last year it was 250. So, a lot more.” </p>
<p>That was seiner Rick McKay. According to the Alaska Department of Fish & Game, 247 boats fished in 2010. Fish & Game predicts that number could climb this year because of a strong pink run and high ex-vessel prices. McKay says the buyback program came too late. </p>
<p> “We should have done it five, six years ago, but it took so long to get through the system that here we are not, it might be too late.” </p>
<p>Seiners who are willing to be bought out have already submitted their asking price or ‘bid’ to the SRA. The seven-person SRA Board will review the bids by July 21st and determine whether the buyback can move forward. If it does, seiners will have to vote in the fall on whether to approve the plan, which would result in a 3% annual tax on the fleet’s catch. </p>
<p>Other factors are at work for gillnet permits, which are selling for almost 30% more than last year. According to broker Olivia Olson, predictions of above-average harvests and high dock prices are likely responsible. </p>
<p>The Commercial Fisheries Entry Commission reports the estimated price for a Southeast gillnet permit was $83,000 in May, but Olson says she sold one last week for $90,000. The same permit sold for about two-thirds that amount last year. </p>
<p>Olson says many fishermen feel the current price is not high, just fair. </p>
<p> “The uptick is unusual, but the permits have been at that price before. And many people feel they have been undervalued for a while. With better prices and ex-vessel values, those permits are right where they should be. “</p>
<p>Adjusted for inflation, the average price of gillnet permits in the past three decades was $82,000, almost exactly their current value. Permit prices peaked in 1989, the same year the fishery netted record profits. </p>
<p>Olson says that while the fishing is good, higher permit prices are unlikely to deter anyone from buying in. </p>
<p> “It’s more about the fishery than it is about the price. They’ll look at the fishery and calculate what it’s going to cost them and what they’re going to make off it. And then, is the price of the permit reasonable?” </p>
<p>According to Olson, demand for permits has boomed this year, reflecting fishermen’s optimism that buying in now will pay off in the long-term. </p>