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Algae Blooms in Chile - What it Means for the Salmon Market

Chilean salmon farmers have been hit with some of the most destructive algae blooms since 2016. As a direct result we are seeing very high prices coming out of all regions that farm Atlantic salmon from Norway to Canada. Already, the market demand for farmed salmon is set to outweigh the supply throughout the first half of 2022 and into the second half, but this recent loss of fish could significantly affect the market for the rest of 2022 and into 2023. With the impact of the recent algae blooms still being tallied, we are sure to see prices continue to rise as a result of the decreased supply.

Harmful algae blooms, (or HAB’s) are natural phenomenon that typically occur in coastal regions each spring and fall. They are caused by phytoplankton or algae being restricted to the surface layer, (or the mixed layer) and they bloom under specific conditions. In the spring, there is an increase in solar irradiance from the sun, and this increased sunlight causes more photosynthesis to occur creating ideal conditions for phytoplankton to grow. Additionally, the mixed layer where the phytoplankton exist becomes shallower, restricting the algae to an area with more light while simultaneously experiencing upwelling events. These upwelling events pull up nutrient rich water -- which phytoplankton require to grow -- from deep water towards the surface. The increased sunlight in turn increases the surface water temperature and, along with the upwelling, provides the proper nutrients and ideal conditions phytoplankton need to enable fast growth. There are many factors that can lead to HAB’s, which makes them difficult to monitor.

These HAB’s can cause many issues for organisms around it, especially when it occurs on aquaculture farms. During a bloom, it can completely deplete the oxygen in the area, and depending on the type of phytoplankton, can harm or even kill organisms around it. Some species of phytoplankton produce neurotoxins which are potentially fatal to fish, and others have mechanical barbs that irritate the gills of fish, further preventing their intake of oxygen from the water. In Chile specifically, warmer waters favor short term salmon grow out cycles compared to Norway and Canada; however, their phytoplankton challenges are extensive. The occurrence of El Nino along with the positive phase of the Southern Annular Mode (SAM) allow for the perfect mix of water conditions, which was the cause of the super bloom Chile saw in 2016 that resulted in the death of 39,000 tons of Atlantic salmon and trout.

Chile’s Salmones Blumar was the first to report on HAB’s impacting three of their farms beginning on the evening of January 7th of this year. These three farms were Orestes, Isla Ester, and Punta Rouse, and are still tallying their losses, but can already confirm the bloom has caused the death of nearly 760,000 Atlantic salmon in the last week alone, resulting in at least $3.3 million in damages. Salmones Blumar has activated mitigation measures in response to the bloom and have deployed two fishing vessels and two remote underwater vehicles to aid in the response. Salmones Pacific Star, a subsidiary of Salmones Austral, reported one of their grow centers, Centro Ester, was impacted by HAB on January 8, just one day after Salmones Blumar. So far, they have reported an estimated death of around 200,000 fish, which is roughly 25% of the farms total fish with an estimated value of around $1.15 million. Contingency and mitigation protocols have also been activated by Salmones Pacific Star, and the removal of effected fish have been implemented in the affected area.

The total impact of these HAB’s has not been fully felt yet, but you can expect salmon prices to continue to creep up over the coming weeks. Luckily, salmon is still one of the most affordable proteins available and should continue to maintain its popularity.

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