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Despite soaring wholesale prices, retail price increases for salmon have largely been modest over the past year. But don’t be fooled, suppliers are warning - with wholesale prices now at their highest since 2006, retailers have started pushing up prices over the past two weeks, and further hefty price hikes are on the cards.
As reported by The Grocer last week, wholesale prices for salmon have risen sharply over the past year. The average monthly spot price for salmon on Norway’s Fish Pool ASA index - the most comprehensive reference point for wholesale salmon prices - was €5.59/kg in May - 46.7% higher than in May 2012 and its highest level since at 2006.
Despite this, retail price inflation on many key salmon lines has remained in the single digits over the past 12 months. On 8 June, the average price of a 280g pack of salmon fillets - a key salmon purchase - across the big four and Ocado was £4.41, up 8.4% on the average price a year ago [BrandView.com].
But over the past two weeks, some retailers have started to push through more substantial price increases on individual salmon lines.
Meat and poultry wholesale prices still rising
With the exception of New Zealand lamb, meat and poultry prices remain on a firm upward trend. French beef prices have risen by 15.9% year-on-year to £3,178/t - up 1.9% over the past month - because of tight global supplies and high feed costs. The same factors have driven up UK beef prices, which are up 7.2% year-on-year and have been buoyed further by demand for UK-produced meat following the horsemeat scandal.
Higher demand for domestic fare has also contributed to rising chicken prices, with UK birds up by 7% year-on-year and 1.3% month-on-month. Chicken prices also remain firm overseas, with Dutch birds 6.5% more expensive than this time last year.
Meanwhile, UK lamb prices are up by 12% year-on-year to £4,730/t, although price increases have slowed recently as a result of new-season lambs coming to market and demand for lamb beginning to fall seasonally.
Tesco, for example, put up the price of its own-label counter salmon fillet by 29% - from £6.25/kg to £8/kg - and raised its 1kg pack of eight salmon fillets by 18.8%, from £8 to £9.50 [BrandView.com]. Meanwhile, Asda moved its 120g budget smoked salmon trimming from 98p to £1.30 - up 32.7%.
And suppliers are warning bigger hikes across a wider range of products are still to come, as retailers will be forced to pay higher prices to secure supplies. “Demand has continued to rise but at the same time, farmers stopped putting as many smolt [juvenile salmon] in the water while prices were low,” said one supplier source.
If salmon prices increased, shopper demand was likely to fall, he added. “When prices rose above £4.00 two years ago, volumes fell by over 20%.”
Prices are soaring because of rising global demand, higher fish feed costs and weather problems in some producing regions, which have hampered production.
Although total global salmon supply in the first quarter of 2013 was up by 5.3% year-on-year, output from Norway, Scotland, the Faroes and Ireland was down by a total of 6.3% to 275,000 tonnes, according to salmon farming giant Marine Harvest. In its third-quarter update, published at the end of April, the company estimated it would harvest 350,000 tonnes of salmon this year - 11% less than in 2012.
Production forecasts for wild salmon are looking more positive, with Alaska projecting a 2013 salmon harvest of 179 million fish, 14% above the most recent five-year average and 5% above the 10-year average [The Alaska Department of Fish and Game]. However, this is unlikely to compensate for the shortfall on the farmed salmon side.
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