Starting high or low in English auctions? The case of frozen saithe in Norway

This study investigates the role of starting prices in sequentially ascending (English) auctions. Applying binary logit and hedonic price models on a unique data set comprising 8217 auctioned lots of frozen saithe, an important species in Norwegian fisheries, we find support for three hypotheses; that low starting prices will lead to a higher share of successful auctions, a higher number of participating bidders, and higher final prices. These results indicate that starting prices in English auctions are important for both seller revenue and auction efficiency and are important with respect to strategic behavior in auction markets for food commodities.Starting high or low in English auctions? The case of frozen saithe in NorwaypublishedVersio

The impact of parasitic sea lice on harvest quantities and sizes of farmed salmon

Sea lice infections are recognized as a primary challenge for both salmon farming and adjacent stocks of wild salmon and sea trout, triggering strict regulations at farm sites and in larger coastal production areas. In 2017 the Norwegian government implemented the Traffic Light System (TLS), where green, yellow, and red lights imply that salmon farmers can raise, maintain, or must reduce production quantities depending on estimated sea lice-induced mortality of wild salmonids. Past research has explored the impacts of sea lice on the growth rate of salmon, indicating a possible link between sea lice numbers and harvest practices. This study evaluates the impact of sea lice on salmon farmers' harvest behavior focusing on production quantities and fish sizes while controlling for market prices of salmon and fish meal. We also investigate whether and to what extent the TLS implementation affects harvest behavior. Our empirical results indicate that farmers tend to harvest marginally faster in response to increasing levels of sea lice and slower during delousing operations. The implementation of the TLS strengthened the negative impacts of delousing operations on harvest quantities. Fish sizes at harvest are negatively associated with sea lice levels and delousing operations, regardless of the implementation of the TLS. Control variables, such as seawater temperature, salmon prices, and fish meal prices, also influence harvest quantities and fish sizes.publishedVersio

Competition in a fish auction: The case of Atlantic cod in Northern Norway

This study investigates the role of bidder numbers in fish auctions, a neglected area of past research and one that is of key importance for optimal use of limited marine resources. The study of a Norwegian auction for Atlantic cod shows that prices increase when two or more bidders participate in the auction. Holding other variables such as lot size, quality grade, and seasonality constant, price increases of 4.51 %, 6.47 %, 7.18 %, and 9.88 % in auctions with two, three, four, and five plus bidders were found, compared to auctions with only one bidder. The increasing prices following from higher bidder numbers also indicate that fishers should be incentivized to provide high-quality fish at the right time of importance for optimal resource use. Increased competition also means that, over time, winning bids will be placed by the buyers that are the most capable of adding value and earning profits, which also contributes to optimal resource use. Findings also show to what extent factors such as lot size, quality grade, fishing method (bottom trawl, longline, Danish seine), and seasonality influence the probability of two or more participating bidders in auctions, which should be highly relevant information for fishers and policy makers.publishedVersio

Large-scale fisheries during the COVID-19 pandemic: The case of the oceangoing groundfish fleet in Norway

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Fishing methods for Atlantic cod and haddock: Quality and price versus costs

This study explores trade-offs between fish quality, fishing efficiency, costs and profitability across three different vessel groups in the Norwegian groundfish fishery, that is, vessels fishing with bottom trawls, longlines and Danish seines. The results of hedonic price analysis at the ex-vessel level of the value chain indicate substantial differences in fish quality as Atlantic cod caught with longlines obtain price premiums of 15.0 % and 12.6 % compared with bottom trawling and Danish seining, respectively, holding other variables constant. For haddock, longlining obtains a price premium of 20.0 % compared with Danish seining and 13.3 % compared with bottom trawling. However, despite better quality and prices, the costs of fishing are substantially higher for longliners than for bottom trawlers and Danish seiners, which explains the differences in profitability favoring the more technically efficient bottom trawlers and Danish seiners. Policy implications are discussed considering trade-offs between fish quality, ex-vessel prices and vessel profitability. In a highly regulated fishery such as the Norwegian groundfish fishery, with individual vessel and vessel group quotas based on historical fishing rights, policy intervention is important for optimal use of limited fish stocks but is not necessarily straightforward.publishedVersio

Large-scale fisheries during the COVID-19 pandemic: The case of the oceangoing groundfish fleet in Norway

Small-scale fisheries have received most of the attention in the literature investigating negative impacts of the COVID-19 pandemic on seafood production. Larger fishing vessels are often perceived to be more resilient as they are better able to alter harvest patterns in response to supply shocks than smaller, less mobile vessels. In addition, larger fishing vessels often deliver storable frozen products contributing to resiliency. The supply and demand shocks caused by the COVID-19 pandemic provides an opportunity to test this hypothesis and is investigated here on the large-scale groundfish fleet in Norway. The results indicate that during the first two whole years of the pandemic the impact on price was small, but also that there were several secondary effects showing how negative shocks in some supply chains/markets are overcome.publishedVersio

Norwegian Farmed Salmon: A Commodity in Need of Differentiation?

Despite much innovation and development in the Norwegian salmon industry, the focus has largely been on building volume and reducing costs. Limited attention has been paid to develop value added products and differentiation strategies in Norway to reap stable profits associated with such strategies. In depth-interviews with a supply chain containing Norwegian salmon producers, one exporter and one feed producer, industrial buyers representing two Polish processing companies and two German retailers, aimed to provide insight into why more differentiation is not happening in the Norwegian salmon industry. Results from this supply chain reveals lack of communication and asymmetric power-dependence relations between the Norwegian salmon business actors and their industrial buyers.publishedVersio

Certify or not? The effect of the MSC certification on the ex-vessel prices for Atlantic cod in Norway

There is strong evidence that ecolabeled seafood commands a price premium in the retail market in Northern European countries. At the same time, there is significant uncertainty as to whether these markups are passed on to the fishers. This is important because producer benefits are required for an ecolabel to provide incentives for sustainable fishery management and fishing practices. Therefore, we investigate whether fishers obtained price premiums for certified cod in Norway. A unique setting for this investigation was created when a part of the fishery, the one conducted within the Norwegian territorial waters, lost its certification by the Marine Stewardship Council (MSC), while it was maintained for the offshore part of the fishery. Using a difference-in-difference approach, analyzing a large and detailed dataset, we find that on average, there is no premium for certified cod, and that other factors are more important. When controlling for buyer types, the loss of the MSC certification resulted in a price reduction for cod sold to producers who make fillets for Northern European markets. However, we found no significant price effect for cod sold to the other buyer types. This highlights the difficulty of obtaining a price premium when there are alternative sources of the product

Evaluering av auksjonsplikten for fryst torsk og sei - Faglig sluttrapport

Denne rapporten evaluerer prøveordningen med delvis auksjonsplikt for fryst sløyd og hodekappet (H/G) torsk og sei som ble igangsatt ved årsskiftet 2021/2022. Muligheten for å overta egen fangst ble også fjernet. Ordningen har sin bakgrunn i lav andel fryst H/G hvitfisk solgt på auksjon gjennom de to største salgslagene for fryst hvitfisk, Norges Råfisklag og Sunnmøre og Romsdal Fiskesalgslag (Surofi). Formålet med prøveordningen er derfor å sikre en mest mulig åpen konkurranse om råstoffet, herunder at industrien som bearbeider fisk i Norge får tilstrekkelig tilgang på råstoff til sin virksomhet. Evalueringen er basert på to hele år (2022 og 2023) med delvis auksjonsplikt. Resultatene viser at auksjonsplikten har fungert etter hensikten ved at andelen fryst råstoff av torsk og sei tilbudt i auksjonene til Råfisklaget og Surofi økte betraktelig i 2022 og 2023 sammenlignet med tidligere år. I 2022 var konkurransen om fryst råstoff spesielt høy fra utenlandsk industri og det fryste råstoffet betydelig dyrere enn ferskt, noe som bidro til at industrien i Norge i større grad benyttet ferskt råstoff i sin produksjon. Videre finner vi eksempler på at auksjonsplikten kan omgås ved at partier som tilbys i auksjonen legges ut med startpris satt lik aksept- og referansepris, noe som gir lav sannsynlighet for oppnådd salg i auksjonen, særlig i et nedadgående marked slik vi hadde for sei i store deler av 2023. Partiet kan deretter kjøpes på kontrakt av selskap i eget konsern, noe som bidrar til at råstoffet blir mindre tilgjengelig i et åpent marked. Justeringer av regelverket vil trolig kunne bidra til at en høyere andel av tilbudt kvantum i auksjonen også blir solgt.Evaluering av auksjonsplikten for fryst torsk og sei - Faglig sluttrapportpublishedVersio

Kartlegging av konsekvenser ved bortfall av MSC-sertifikat – Faglig sluttrapport

Bortfallet av MSC-sertifisering for deler av fisket etter torsk og hyse, og hele fiskeriet etter NVG-sild, ga en unik mulighet til å studere betydningen av bærekraftssertifisering for norsk fiskerinæring. Resultatene viser at sertifiseringen er viktig for torsk i enkelte markedsregioner hvor vi finner en betydelig prispremie. Videre fant vi at høyverdiproduktet hyseloins oppnår en betydelig prispremie med MSC-sertifisering i eksportmarkedet. Dette er interessant fordi denne premien – gitt at den deles oppstrøms med produsenter og fiskere – kan bidra til økt fokus på høyverdiprodukter i filetproduksjon og dermed også økt etterspørsel etter høy råstoffkvalitet fra fangstleddet som kreves for slik produksjon. For NVG-sild er analysene begrenset til eksportleddet, men vi finner ingen prispremie for MSC-sertifisering i eksportmarkedet. Samlet sett viser disse resultatene at det finnes prispremier for MSC-sertifisering i noen eksportmarkeder for noen arter og noen produkter. Men for betydelige kvantum fisk (all NVG-sild, filetprodukter av hyse (utenom loins), hel sløyd hyse med og uten hode, og torsk til Øst-Europa) finner vi altså ingen prispremie for MSC-sertifisering i eksportmarkedet. Resultatene for torsk viser også at prispremier deles med fiskekjøpere/produsenter, men også at disse, med unntak for filetprodusenter, men ikke videre med fangstleddet. Dette tyder på at hovedideen med MSC sin markedsbaserte bærekraftssertifisering – at forbrukeres etterspørsel skal lede til prispremier som gir insentiver til mer bærekraftig forvaltning og fiskepraksis – ikke holder. På sikt kan dette være problematisk for MSC fordi de risikerer å miste støtte fra fangstleddet som dekker sertifiseringskostnadene.Kartlegging av konsekvenser ved bortfall av MSC-sertifikat – Faglig sluttrapportpublishedVersio