Alaska Seafood Industry Update

Prepared by: McDowell Group, Inc.Presenter: Andy Wink

2017 Board Meeting05.08.17

Historical Ex-Vessel Value & Harvest Volume2005 - 2016

*2016 is a preliminary estimate.Source: NMFS, ADF&G, and McDowell Group estimates.

3.5

4.0

4.5

5.0

5.5

6.0

6.5

$1.0

$1.5

$2.0

$2.520

05

2006

2007

2008

2009

2010

2011

2012

2013

2014

2015

2016

*

Harv

est (

Billi

ons l

bs.)

Ex-V

esse

l Val

ue ($

Billi

ons)

Harvest Volume (Billions lbs.) Ex-Vessel Value ($Billions)

Changes: 2011 vs. 2015Value ($M) Value (%) Harvest (%)

Salmon - $149 - 24% + 40%Pollock + $20 + 4% + 16%Halibut & Bcod - $151 - 44% - 29%Cod - $13 - 6% + 5%Flatfish - $42 - 37% - 25%Crab - $8 - 3% + 21%Herring - $4 - 39% - 29%Total - $362 - 17% + 8%Dollar (Index) - + 27% -

Note: Federally managed fisheries are based on preliminary data.Source: Investing.com, NMFS, and ADF&G.

Ex-Vessel Value in Recent Years

*Includes sole/flounder, rockfish, and Atka Mackerel. Note: 2016 figures are preliminary estimates. Source: ADF&G, NMFS, and McDowell Group estimates.

Species 2013 2014 2015 2016ESalmon $741 $602 $481 $440Pollock 456 474 480 456Cod 167 204 186 172A80 Species* 148 149 130 136Crab 256 257 269 220Halibut 112 107 100 116Black Cod 91 95 94 92Cukes & Geoducks 11 7 8 10Herring 17 11 6 5

Figures in Millions of Dollars

Historical Ex-Vessel Value & Dollar Index2000 - 2016

*2016 is a preliminary estimate.Source: Investing.com, NMFS, ADF&G, and McDowell Group estimates.

70

80

90

100

110

120

130

$1.00

$1.25

$1.50

$1.75

$2.00

$2.25

$2.5020

00

2001

2002

2003

2004

2005

2006

2007

2008

2009

2010

2011

2012

2013

2014

2015

2016

*

Dolla

r Ind

ex

Ex-V

esse

l Val

ue ($

Billi

ons)

Inflation-Adj. Ex-Vessel Value ($Billions) Dollar Index

STRONGUSD

(BAD)

WEAKUSD

(GOOD)

Major Buyers’ Currency – YoY vs. USDEuro-5.8%

Japan-0.2%

Canada-4.1%

Competitors’ Currency – YoY vs. USDRussia+18.1%

Norway-4.2%

Chile+2.7%

Note: Positive figures are good for Alaska producers, and negative figures are bad. Source: OANDA.com, April 2016 vs. April 2017.

Historical U.S. Dollar IndexJanuary 1973 – March 2017

Source: Federal Reserve.

Value of Commercial Salmon Permits1985 - 2016

Note: Figures are not adjusted for inflation. Source: CFEC, compiled by McDowell Group.

$0

$200

$400

$600

$800

$1,000

$1,200

$1,40019

8519

8619

8719

8819

8919

9019

9119

9219

9319

9419

9519

9619

9719

9819

9920

0020

0120

0220

0320

0420

0520

0620

0720

0820

0920

1020

1120

1220

1320

1420

1520

16

Mill

ions

of D

olla

rs

Resource Value Summary

• Five years of lower ex-vessel value, good chance we see improvement in 2017• Better salmon prices/harvest expected• Bump in halibut & black cod TACs• Still problems with pollock & crab

• Ex-vessel value is down 2011-2016, but not as much as the dollar is up

• 90% of harvest volume comes from species with first wholesale value/lb. under $1.50 (in 2015).

Alaska Whitefish Supply Summary• Pollock harvests likely flat-to-down in 2017 after

increasing trend, Russian harvests/TACs up• Cod TACs down, harvest volume steady in 2017,

steady competing supply expected• Sole harvests up slightly but TACs down• Rockfish & Atka Mackerel TACs up, but YTD

harvest is down substantially• Black cod TACs up, more early season supply• Halibut TACs up, early season supply steady

Alaska Whitefish YTD Harvests

*Including yellowfin, flathead, rock, and rex sole, and Alaska plaice. Note: Based on non-confidential harvests through 4/15/17 (through 4/22 for halibut). Halibut weight in H&G terms, all others are in round-weight terms. Source: NMFS, compiled by McDowell Group.

Species 2015 2016 2017 YoY TACPollock 532.3 506.8 522.2 -1%

Cod 144.7 150.1 151.8 -6%

Sole* 70.3 59.8 64.0 -3%

Rockfish 3.0 3.8 1.8 +5%

Atka Mackerel 13.1 16.9 11.7 +19%

Black Cod 1.36 1.40 1.97 +11%

Halibut 1.04 1.47 1.47 +6%

Thousands of Metric TonsYear-to-Date Harvest (through Mid-April)

Competing Whitefish SupplyHarvests & Outlook

Source: Groundfish Forum & trade press outlets, compiled by McDowell Group.

2014 2015 2016 2017Russia Pollock 1,681 1,755 1,841 1,891

Barents Cod TACs 1,300 890 890 894

Iceland Cod TACs 214 216 239 244

Tilapia 3,677 3,931 4,086 4,269Pangasius & Channel Catfish 2,015 2,043 2,063 2,030

TACs in Thousands of Metric Tons

Pollock Notes:Russian scientists recommend 6% TAC cut in 2018 (-110K MT)

Alaska Salmon Supply

Note: 2016 data is preliminary. 2017 data represents forecasted/estimated harvests.Source: ADF&G , Groundfish Forum, trade press, and McDowell Group estimates (Chinook forecast).

Species 2013 2014 2015 2016 2017FSockeye 29.3 44.1 55.0 52.9 40.9Pinks 219.2 95.8 190.6 39.6 141.9Keta 18.6 11.3 18.2 16.0 16.7Coho 5.4 6.3 3.9 3.9 4.7Chinook 0.28 0.49 0.52 0.42 0.30Total 272.6 157.9 268.2 112.7 204.6

Competing Supply:Atlantic Salmon: 7% decline in 2016, 5% increase expected in 2017Russian Salmon: Pink harvest up in 2016, expected to fall in 2017Chilean Coho: 11% decline in 2016, 4% increase expected in 2017

Figures in Millions of Fish

Global Salmon Harvest by Key Producers

Source: Groundfish Forum and McDowell Group compilations.

Species 2013 2014 2015 2016

Sockeye 294 386 402 397

Pink (2yr. Avg.) 1,061 939 832 858

Keta 714 706 724 566

Coho 64 85 60 43

Chinook 20 26 21 14

Atlantic 4,615 5,175 5,249 4,873

Farmed Coho 346 379 311 276Figures in Millions lbs.

Alaska Seafood Industry Update

Prepared by: McDowell Group, Inc.Presenter: Andy Wink

2017 Board Meeting05.08.17