A Salmones Austral processing plant in Quellon. The company sold 25% more fish in Q3 2020 than Q3 2019 but got much less revenue. Photo: Salmones Austral.

Low salmon prices send Chilean farmers into the red

Two Chilean salmon farmers have recorded losses for the third quarter of 2020 because of low prices caused by Covid-19’s impact on markets.

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Salmones Austral and Multiexport Foods both ended Q3 in the red after making profits in the same period the year before.

In the case of Salmones Austral, the company made US $45.8 million on sales of 11,800 tonnes of salmon – 25% more volume than in Q3 2019. That revenue total is $7.4m less than in Q3 2019, largely because of much lower prices. The average price achieved in Q3 was just $3.63 per kilo whole fish equivalent (WFE), more than 30% less than the $5.53 per kilo average in Q3 2019.

$17.3m losses

The cost of sale reported by the company to the Financial Market Commission amounted to $55m, meaning Salmones Austral recorded an operating loss of $10.1m.

Likewise, the firm went from profits of $1.8m in Q3 2019 to losses of $17.3m in the third quarter of this year. 

Christian Samsing: Price crisis has been deeper and longer that first anticipated.

Diversified markets

“Although the price crisis in the industry, as a consequence of the Covid-19 pandemic, has been deeper and longer than was estimated at the beginning of the year, we have taken advantage of this situation to diversify our markets and sales channels,” said company president Christian Samsing in a press release. 

“This is how the volume of salmon sold in September is 25% higher than that sold in the same period in 2019.”

Samsing stated that “the company has continued with its strategic plan, which includes the construction of a new RAS technology fish farm that includes an investment of $36m, and with the opening of new farming centres in the Magallanes region”.

Multiexport Foods reported good biology and higher harvest weights, but low prices hit the bottom line. Photo: Multiexport Foods.

Less demand, more fish

Meanwhile, Multiexport Foods reported Q3 operating income of $106m, 21% lower than in the same period of 2019.

The producer blamed this on a 21.5% drop in prices to an average of $3.87 per lb (fillets).

“The effect that the pandemic has had on lower demand, mainly in the HoReCa segment (hotels, restaurants and cafes), as well as the higher production in Chile with a growth of 15.4% for the quarter compared to the same period of the year last year, are the main factors that explain the drop in prices,” Multiexport announced yesterday in its report to the Financial Market Commission. 

Good biology

Volume sold by the company reached 22,040 tonnes WFE, increasing 2.7%, and total harvest was 25,055 tonnes WFE, up 2%.

Average weights contributed positively to this rise with 5.40 kilos WFE for the case of Atlantic salmon, compared to 5.23 kilos WFE in the same period last year. 

“The good sanitary conditions, especially in Magallanes, and the good performance of the harvested centres have made it possible to achieve these values,” Multiexport reported. 

The firm made an operating loss of $18m, mainly due to the drop in sales prices, which was partially offset by lower ex-farm costs (-13.1%), as a consequence of a better performance in general. 

The consolidated loss for the period was $16.8m before fair value adjustment, compared to a profit of $4.5m in the third quarter of 2019.