Is Argentina Really Changing? Ask Its Salmon

[Rich One]

What are the logistics of getting something (anything) out of the Beagle Channel? I've seen the articulated trucks loaded with live salmon (they have portholes to see inside) on the dock in Niebla, on the coast near Valdivia, in Chile, having taken the ferry across the bay from Corral where the farms are located going south along the coast. From there, it's about 100km to Ruta 5 (Panamerican Highway) and then maybe an hour to the major port of Puerto Montt where processing for export will take place.

Is it even possible to compete with that supply chain?

Chile has now 31% of the world export markets, exporting to USA, Brasil, China among others. In 10 years may duplicate the annual production, will becoming the number one exporter of farmed Salmon. See attachment

https://www.ex-ante.cl/informe-de-consultora-estadounidense-proyecta-que-la-industria-del-salmon-chilena-se-duplicara-en-menos-de-10-anos/#:~:text=De%20acuerdo%20con%20el%20documento,solo%20por%20detr%C3%A1s%20de%20Noruega.

Organic Salmon is now produced in Chile

Cooke Chile

Pescado a Domicilio — Encuentra salmón premium en sus distintos formatos: orgánico, filete, porciones, con piel, sin piel o ahumado en frío. Camarón.

cooke.cl

 

[Ries]

What are the logistics of getting something (anything) out of the Beagle Channel? I've seen the articulated trucks loaded with live salmon (they have portholes to see inside) on the dock in Niebla, on the coast near Valdivia, in Chile, having taken the ferry across the bay from Corral where the farms are located going south along the coast. From there, it's about 100km to Ruta 5 (Panamerican Highway) and then maybe an hour to the major port of Puerto Montt where processing for export will take place.

Is it even possible to compete with that supply chain?

sure, its possible.
In Alaska, there are on shore packing plants, including canneries, and plants that just clean and freeze salmon steaks or sides.
But a lot of the Alaskan salmon is cleaned and flash frozen on the boat, which can range from a 40 foot boat to a 300 foot processing ship.

Farmed Salmon is usually done in land based plants, but it could be done shipboard.

 

[Ries]

I have to admit I prefer farmed, I find it fresher. I've always assumed this is because it is easier to manage supply chain with anticipated culling amounts and dates.

Have you ever tasted Copper River Salmon? King which is cleaned and frozen within hours of being caught?
There is a reason that Copper River can sell for close to a hundred dollars a pound in some places.
They actually feed the farmed salmon a coloring agent, because other wise it would be gray.

 

[QuilmesSlo]

Have you ever tasted Copper River Salmon? King which is cleaned and frozen within hours of being caught?
There is a reason that Copper River can sell for close to a hundred dollars a pound in some places.
They actually feed the farmed salmon a coloring agent, because other wise it would be gray.

Tbh, the only thing I am sure of is that I’ve never paid a hundred dollars a pound so probably not.

The coloring agent thing is kind of gross but doesn’t really bother me.

my personal choice is that I find farmed better, even from a premium supermarket in the us like Whole Foods.

 

[FrankPintor]

sure, its possible.
In Alaska, there are on shore packing plants, including canneries, and plants that just clean and freeze salmon steaks or sides.
But a lot of the Alaskan salmon is cleaned and flash frozen on the boat, which can range from a 40 foot boat to a 300 foot processing ship.

Farmed Salmon is usually done in land based plants, but it could be done shipboard.

Is it even possible to compete with that [Chilean] supply chain?

Well, I guess the answer to my question is no, then If processing on board a ship or close to the fish farm was a viable option, the Chileans would already have done it. As it is... say 6 hours from farm to factory and ready for export is difficult to beat. Any Argentinian farmed salmon production, while it might be very very good, is likely going to be a niche product, when confronted with the economies of scale and superior logistics on the other side of the border. As someone almost said, "It's nice to be idealistic, but you need to be practical otherwise you end up" doing things that make no economic sense.

Having said that, Patagonian trout, aka. truchón is amazing and I would have it every day of the week if I could manage the 45k Pesos per kilo.

 

[FrankPintor]

The coloring agent thing is kind of gross but doesn’t really bother me.

my personal choice is that I find farmed better, even from a premium supermarket in the us like Whole Foods.

Yes, the colouring thing is a bit gross. Is Patagonian trout / truchón also coloured? I may be being silly, but the strong red colour of Alaskan (Sockeye?) salmon looks more artificial and off-putting to me than farmed salmon.

 

[SlowWalker]

Well, I guess the answer to my question is no, then If processing on board a ship or close to the fish farm was a viable option, the Chileans would already have done it. As it is... say 6 hours from farm to factory and ready for export is difficult to beat. Any Argentinian farmed salmon production, while it might be very very good, is likely going to be a niche product, when confronted with the economies of scale and superior logistics on the other side of the border. As someone almost said, "It's nice to be idealistic, but you need to be practical otherwise you end up" doing things that make no economic sense.

Having said that, Patagonian trout, aka. truchón is amazing and I would have it every day of the week if I could manage the 45k Pesos per kilo.

You seem to think the barrier to entry is insurmountable.
It appears that the industry thinks it is not.

It is not the government investing in any of the facilities, therefore, if it does come to fruition, and likely based on the lobbying to even get this far, I would be inclined to believe that the industry sees an opportunity.

Instead of continuing to invest in only Chile to expand production, spreading their base to another country, also reduces risk exposure in the future should a government want to limit operations in Chile.

 

[Rich One]

sure, its possible.
In Alaska, there are on shore packing plants, including canneries, and plants that just clean and freeze salmon steaks or sides.
But a lot of the Alaskan salmon is cleaned and flash frozen on the boat, which can range from a 40 foot boat to a 300 foot processing ship.

Farmed Salmon is usually done in land based plants, but it could be done shipboard.

While the main destination for Chiean Atlantic salmon is the United States (42%), Coho salmon is primarily exported to Japan (58%). This market diversification strengthens the position of the Chilean salmon farming industry by adapting to consumer preferences in different regions of the world.

 

[FrankPintor]

You seem to think the barrier to entry is insurmountable.
It appears that the industry thinks it is not.

You didn't read what I wrote: "Any Argentinian farmed salmon production, while it might be very very good, is likely going to be a niche product, when confronted with the economies of scale and superior logistics on the other side of the border. "

Not "insurmountable", but "niche". Small-scale artisanal production. Almost certainly very, very good. But, and @Rich One has been helping us with statistics, no competition for the juggernaut that is Chilean salmon production.

It is not the government investing in any of the facilities, therefore, if it does come to fruition, and likely based on the lobbying to even get this far, I would be inclined to believe that the industry sees an opportunity.

I'm inclined to believe this is some more libertarian jumping up and down to attract attention. Maybe it will employ a small number of people, make an adequate return for a few investors, bring pleasure to the palates of a couple of connoisseurs (I include myself), but this is not something to make a big deal about.

Instead of continuing to invest in only Chile [...] also reduces risk exposure in the future.

Right. I hadn't heard that one before, reduce risk exposure by investing in Argentina. I hope you'll forgive me if I say that we have a way to go before we get to that point

 

[SlowWalker]

You didn't read what I wrote: "Any Argentinian farmed salmon production, while it might be very very good, is likely going to be a niche product, when confronted with the economies of scale and superior logistics on the other side of the border. "

Not "insurmountable", but "niche". Small-scale artisanal production. Almost certainly very, very good. But, and @Rich One has been helping us with statistics, no competition for the juggernaut that is Chilean salmon production.


I'm inclined to believe this is some more libertarian jumping up and down to attract attention. Maybe it will employ a small number of people, make an adequate return for a few investors, bring pleasure to the palates of a couple of connoisseurs (I include myself), but this is not something to make a big deal about.


Right. I hadn't heard that one before, reduce risk exposure by investing in Argentina. I hope you'll forgive me if I say that we have a way to go before we get to that point

1) your first point seems to be mixing quality ("niche product") with the production/processing facilitise in Chile already. I am not really sure why this is the case.

2) It is not a matter of competing with the existing Chilean production. If the market is growing, then the question is can you continue to expand existing facilities and if so, by how much? Do you continue to expand existing facilities in the same place or look to other locations to diversify. The locations for this species are limited globally.

3) I doubt this is being pushed 100% by the government as an avenue to increase industry but rather being pushed by industry to what they see as a favourable governing party at the moment. Considering that the legislation requires studies and impact assessment, it gives the companies time to complete such works, and by the time any real investment comes up it will be election time and they will see by then how things have progressed and which party is expected to win by then. They won't have to commit to investment until after next election.

4) The risk is the Chilean government. If another party comes in and wants to limit expansion, or reduce industry due to the inherent risks with farmed fishing. If so, the companies may want to have other places that they can easily swap to at the time, possibly just the farming aspect, and keep processing in Chile, or move/parallel operations in Argentina. As a business its a risk mitigation exercise for them to know if they have opportunity to operate in Argentina. Whether they choose to or not is a separate issue.

5) As mentioned in 3) they will have time until investment is needed to see how the economy and politics goes. I would include in this that the Venezuelan situation will be interesting as well as its implications for Latin America. It is still the same governing party, but if under pressure from the US things were to change there and the quality of life and economy improves, it will be a point of interest in why things have gone so slow here. It will probably provide more support for the right than the left in Argentina.