The welfare impacts of Covid-19 on the U.S. salmon sector

ABSTRACT

This research estimates the effects of COVID-19 on the U.S. supply and demand for salmon over two distinct periods. The first period reflects the first year (2020) since the COVID-19 outbreak, and the second period covers the outbreak’s second year (2021). The effects of COVID-19 on salmon prices, domestic production, and imports are analysed through graphics, elasticities, and spatial welfare economics derived from the equilibrium displacement model of the U.S. salmon market. In the first year, COVID-19 caused a reduction in domestic demand. As a result, U.S. salmon producers and consumers lost $302 million. Consumer loss accounts for 87% of this value. In 2021, however, domestic consumption recovered, with a positive effect of $447 million on consumers, outweighing the negative impact from 2020. Together, the domestic producers and consumers gained approximately $512 million. The net market gain (a combination of the first- and second-year effects) was $210 million. These results are subject to the magnitudes of change in demand and supply due to COVID-19 and transportation costs.

KEYWORDS:

• COVID-19
• consumption
• supply
• welfare
• price
• salmon

JEL CODES :

• F10
• Q22
• Q27

Disclosure statement

No potential conflict of interest was reported by the author(s).

Notes

¹ Meat, poultry, and seafood (fish and shellfish) accounted for 51%, 42%, and 7%, respectively, of the 143.9-pound total per capita consumption in 2017 (USDA ERS 2020).

² The annual report by Alaska Seafood Marketing Institute (Seafood 2021) indicates sales have surged for frozen seafood at retail and indirect to consumer online sales.

³ This 5% was based on the statistical data by NOAA presented in Table 1.

⁴ This 8% was estimated based on the data of imports and exports in 2021 from NOAA and landing data in 2021 from Alaska salmon harvest updates end of season 2021 (https://www.alaskaseafood.org/industry/market-information/#2021).