Report: Morro Bay Fishing Industry on the Upswing

Predicting how good the fishing will be in Morro Bay next year—amid shifting markets, changing ocean and ongoing regulatory constraints—is tricky business. However, even if the October report on state of the industry, “Morro Bay Commercial Fisheries 2014 Economic Impact Report,” covering the 2013 calendar year, is a fair-weather snapshot of current trends, Morro Bay fishing is in for some good economic times ahead.

By ED OCHS

Predicting how good the fishing will be in Morro Bay next year—amid shifting markets, changing ocean and ongoing regulatory constraints—is tricky business.

However, even if the October report on state of the industry, “Morro Bay Commercial Fisheries 2014 Economic Impact Report,” covering the 2013 calendar year, is a fair-weather snapshot of current trends, Morro Bay fishing is in for some good economic times ahead.

“In 2013, the commercial fishing industry in Morro Bay continued a powerful trend in increased earnings and landings from a 20-year low in 2007, states the report. “In the last seven years, earnings have increased over 350% and landings have risen more than seven and a half fold.”

“That the earnings are spread across a broad range of fishery types, aimed at differing habitats using different gear, is another indicator of sustainability,” according to the April 2104 companion report, “City of Morro Bay Fishing Community Sustainability Plan.” “Fishermen in Morro Bay target Spot prawn, Pacific hagfish and sablefish with traps, groundfish with hook and line and trawl, squid with purse seine nets, swordfish with drift gillnets, and salmon by surface troll.”

The 2014 editions of the “Economic Impact Report” and “Sustainability Plan” were prepared by San Luis Obispo-based Lisa Wise Consulting Inc., in partnership with the Morro Bay Commercial Fishermen’s Organization (MBCFO) and funded by the Central Coast Joint Cable/Fisheries Liaison Committee.

Morro Bay’s steady climb in fishing earnings was part of a statewide trend, the report notes. Commercial fishing earnings in the state nearly doubled between 2007 and 2013, and, significantly, at the same time, this growth overlapped the recent recession/depression, which bottomed in 2009, according to the National Bureau of Economic Research. In other words, Morro Bay fishing suffered the same downtown as did practically every business in the U.S. at that time, and is now in full recovery.

Leading economic indicators place the commercial industry in Morro Bay at near-record highs. Landings by weight—the amount of seafood offloaded at the dock—reached almost 6.8 million pounds in 2013, a 33% increase from 2012, and the highest landings by weight since 1993. Earnings at the dock exceeded $7.1 million in 2013, a 9.3% increase from 2012, marking the third year of dock earnings over $6.5 million, and a 275% increase from the 20-year low in 2007.

According to the report, sablefish, Dungeness crab, hagfish, salmon, Market squid and halibut accounted for approximately 80% of the top-10 earning species in 2013. Shortspine thornyheads, Spot prawn, Petrale sole, Dover sole and Gopher rockfish made up the remaining 20% of the top 10 for a total of $6.25 million.

A top-15 port and statewide leader, Morro Bay led California in 2013 in hagfish with 42% of the state total; Aurora rockfish with 58% of state total; Bank rockfish with 68% of state total; and sablefish with 25% of state total.

Falling Price Per Pound

While earnings increased 9.3% and landings 33% from 2012 to 2013, the “Economic Report” notes, “Price per pound has fallen sharply, reflecting Morro Bay’s increasing participation in the Market squid fishery. Price per pound for Market squid in Morro Bay averaged $0.33 per pound in 2013. Morro Bay’s overall average price per pound in 2013 was $1.05, down from $1.27 in 2012.”

By comparison, species much more valuable than Market squid also hit the docks, though in far less volume. For example, the still-strong sablefish fishery (27% of overall dock earnings in 2013) averaged around $2.50 per pound in 2013. Dungeness crab (17% of earnings) registered its highest total in 24 years, nearly doubling 2012 when it averaged upwards of $5.04 per pound. White seabass averaged an all-time high of $4.62 per pound in 2012 (2013 figures unavailable). Chinook salmon (5%), long a key fishery in Morro Bay, averaged $7.54 per pound last year. In 2013, Nearshore species, including Cabezon, Gopher rockfish, Grass rockfish, Brown rockfish, Black and Yellow rockfish, Kelp greenling and Copper rockfish, fetched about $6.79 per pound. California halibut averaged $6.53 per pound. Spot prawn averaged around $13.31 per proud in 2013, making it the most valuable species to hit the dock.

The “Economic Report” commends fishermen’s “ability to adapt” to shifting markets and seize new and emerging opportunities. “Maintaining the upward momentum,” it states, “commercial fishermen met drops in key fisheries such as sablefish with increased landings and earnings of salmon, Market squid and Dungeness crab.”

Fishermen’s Reaction

“The Morro Bay fishing community is doing very well,” says Jeremiah O’Brien, former president and present director of the MBCFO. “Most of the guys are doing well financially because the fish stocks are there. As we see improvements in the landings, as we see improvements in the opportunities, and we see younger guys coming into the business.

“I’m very optimistic about the future,” O’Brien says. “What’s happening now is that the fish stocks are catching up with management efforts. The management has been very heavy for the last 25 years, and what we’re seeing now, finally, is an upswing in all of the fish stocks right across the board, because some of the efforts were necessary, some were not…”

“I don’t see anything currently that would impede the direction the growth has been traveling,” he says about room for future growth. “It’s steadily moving up the (earnings) chart very nicely. I don’t see anything currently that would impede those numbers. At some point, there more than likely would be a leveling off, and I don’t know when that would come.”

What complicates that picture is the Rock Conservation Area stretching from Canada to Mexico that is currently closed. “That area, between 30 and 150 fathoms, is the primary spawning area for all of the Rockcod on the West Coast,” he says. “It’s been closed since 1999. It’s going to have to open one day soon, and there’s already been rumblings and little tests. In fact, some tests were done here locally. When it does open I believe we’re going to see all of those numbers on the (landings and earnings) charts go up considerably.”

O’Brien feels optimistic about the future of the business.

“The markets look good. I believe we’re going to remain healthy for a long time to come,” he says, especially since the local fishing community has always enjoyed the strong support of the community at large, from the Harbor Department to the city councils. The coming and goings of the fishing boats are an integral part of the rhythm of daily life in Morro Bay.

“We need to ensure (the younger fishermen) are going to make a good living and that there’s opportunity in the future,” O’Brien says. “Management is keeping up with the industry and the stocks are looking healthy… as long as management keeps their eye on things and manages properly. We’ve got to make sure that we have fish for the future while ensuring that we are utilizing the stocks available to us properly now. It’s a fine line.”

Mark Tognazinni, a MBCFO director and business owner, says that while “we have had some great successes, all isn’t a glowing bed of coals in Morro Bay fisheries.”

He questions the largely squid-based economy.

“Let’s do the math,” he says. “6.8 million pounds (in landings), but remember 4 million pounds were squid… All out of town boats, less than five or six boats, mostly ran by non-owners selling to out of town markets, and most all that is consumed ends up leaving the U.S. to be processed. Other than the dock and dock workers who unload the squid there is very little economic gain for Morro Bay. The harbor loves it because it artificially inflates our landings and that keeps tax dollars flowing to the harbor. Squid production does little for Morro Bay other than disrupt other fisheries.

“So, in a year we have no squid landings, and there are more of those than not, do we say the landings have collapsed?”

“Fishermen have it better than we did five years ago,” Tognazinni says, “(but) certain doors are closed behind us as far as limited entry and limited access, (and) lots of active fishermen have manipulated the system and have become owners of very valuable permits for free.

“Morro bay fishermen really don’t need help,” he adds, “but we need to have organizations stop hurting us. Give us reasonable access to resources. Allow fishermen, real fishermen to have access without paying $100,000 of dollars to fish. Get rid of limited entry, individual quotas, and anything else that allows large corporations to own fish that should belong to all of us.”

Key indicators point to a similarly prosperous 2014. Landings and earnings at the dock, species mix and trends, price per pound, number of trips and vessels operating in the harbor; demand for offloading, staging, refrigeration/ice, processing, bait, gear storage, a chandlery and other marine services; as well as for retail space, employment generation, and synergies with tourism and other related businesses—all point to the local industry’s overall good health. Morro Bay is expected to build a boatyard/haul-out facility within the next few years, and that should further stimulate new economic activity at the docks, new taxes revenues, and more dollars spent in town.

And the new faces: “In the last three years [ending in 2012],” states the “Sustainability Plan,” “it is estimated that 12 new participants have entered the commercial fishing industry in Morro Bay, attracted by five years of steady economic growth and increased earnings.” Even more have entered the business in the last two years.

The “Economic Impact Report” “is a tool to give a very small snapshot of a blink of an eye in time,” Tognazinni counsels. “Fisheries are cyclic just like farming and other food producing businesses.

“Ride the highs and prepare for the lows.”

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