Taking Advantage of the Salmon Boom Sustainably

Salmon Farm

The backlash against salmon farming is just beginning. Not all salmon farms are dangerous though, and one Norwegian company has found a safer way to do this.

One of the reasons why salmon or any seafood doesn’t come close to the volume of sales that chicken, pork, and beef do is that the supply for salmon is so much more limited. While we do produce 3 million tons of salmon per year, this is way behind the 100 million tons of both chicken and pork or the 60 million tons of beef that goes to market every year.

We’ve historically relied on catching wild salmon to satisfy this demand, where we just raise the livestock that we use for meat on farms. Someone got the idea to raise salmon on farms as well by keeping them in a cage in the water, and this allowed us to increase the production of the fish beyond what we could achieve by fishing wild salmon in any sort of sustainable manner.

This has not been without its problems, and even though commercial farming has things that people find objectionable, where the animals are very overcrowded and live in conditions that many find cruel, the issues with salmon farming are of a particularly nasty nature.

We’ve known about the big problems with salmon farming for years now, but these things have a way of staying out of the popular media, which serves advertisers primarily and tend to avoid portraying commercial enterprises in too much of an unfavorable light.

We can’t rely on the government to police these farms themselves, as industries spend a lot of money lobbying politicians to act in their interests, and use the carrot of jobs as part of their pitch. It’s not that there isn’t any regulation with salmon farms, but thus far it has been pretty minimal compared to what it would take to protect us properly, and what little there is isn’t often enforced that much.

We have the internet now though, and the word about this is getting out more by way of people communicating with each other more without the filter of big media, and we also have social media to help spread the word around more about these articles and videos that actually tell a more accurate story of what goes on with these farms.

One of the big problems with salmon farms is that they keep the salmon in, but that’s all they keep in, and everything else escapes from the “farm” through the mesh. This includes all the waste from the farm, both organic and inorganic, which simply enters the oceans and rivers that the salmon farm is located in.

Salmon farms also concentrate things like bacteria, viruses, environmental toxins, and all the man-made ones that we use on them as well, including a lot of drugs and pesticides, serving as a cesspool for a lot of harmful water-borne pollutants.

Aside from the environmental pollution that comes out of this, including a lot of toxins, this also spreads disease to other fish, particularly wild salmon. The salmon farm is putting wild salmon at extreme risk these days in areas where we have this farming going on, with the fish usually dying before they get a chance to spawn.

Salmon farms have also been observed spraying large amounts of pesticides which are known to be dangerous, which the salmon consume, and this and more gets passed up the food chain to us. Farmed salmon is considered the most toxic food on earth, even though we normally consume it unaware of what is actually in it.

Farmed Salmon Will Indeed Replace Wild Salmon Because the Farms Kill the Wild Salmon

Keeping fish in a small enclosure just isn’t healthy for them, and these farms are a breeding ground for diseases. Up to 20% of farm salmon die on the farm, of various things including sea lice and viruses, and both have spread from the farm to the wild, and wild fish are now dying of these diseases as well. As the crisis worsens, we’re bound to hear more and more about this, and this makes salmon farming look very bad.

Wild fish are already known to have concentrations of toxins in them that should at least concern us, including the well-known ones of mercury, PCBs, dioxin, and the like, as well as some lesser-known toxins that may be an even bigger concern, and all this gets even more concentrated in fish farms.

We also often feed these farm fish the same thing that we feed the farm animals, corn and soy, which are even further away from the natural food of fish as they are from farm animals. Normal salmon are pink, but farm salmon are grey, and the farms either rely on petroleum-based supplements to make them pink or even use harmful dye in some cases.

Fattening up salmon like they do with livestock makes farmed salmon three times higher in fat than wild salmon, and it is fat that carries toxins. With all the extra fat plus all the extra exposure to toxic pesticides and other harmful agents, this makes farmed salmon far more toxic than any wild fish could be, and 5 times more toxic than anything you could buy at the supermarket or order in a restaurant.

Some farm salmon are fed fish feed, which is made from very high fat fish such as eels and the feed itself contains very disturbing amounts of toxins such as dioxin, along with pesticides far in excess of allowable standards with food.

They also treat farm salmon with a lot of antibiotics, which is necessary given that they are raised in cesspools, while wild salmon who are exposed to the toxic output of these farms are left undefended. What is so different about this type of farm is that they exist in an open loop with nature, because it’s a lot cheaper to do this in the water than in an enclosed area which would prevent the farm polluting the water it is in.

It is the peril that salmon farming is placing the wild salmon industry in that will take this issue from one that few people are really aware of to one that becomes much better known, and at the rate we are going, with wild salmon dying so quickly from this, this should definitely be a concern if we’re looking to invest in the stocks of these companies that farm salmon.

The market is already pricing in greater regulation in Norway, which is the world capital of the salmon farming industry, which is expected to limit their growth. While the industry has grown in leaps and bounds, averaging 15% growth per year, more regulation is expected to limit the growth of the major salmon farming companies to just 5% per year over the next few years, and this isn’t even accounting for the more stringent regulation that is likely once the word is out more and a lot more people put pressure on governments to act.

Atlantic Sapphire Has Found a Much Better Way to Do This

There is one Norwegian company that is well ahead of the curve and is looking to make salmon farming both a lot safer and sustainable, with no impact at all to wild salmon. Atlantic Sapphire has been seeking this since 2010, and while they are still a very small company with only 70 employees total, and are still in the pre-profit stage, they already have $800 million in market capitalization with their stock and are planning a major expansion of their business with the huge farm that they are building in Florida.

With all of the recent focus on things like environmental impact and sustainability, Atlantic Sapphire has managed to work out a way where we can farm salmon with minimal impact on the environment, by locating their farms in tanks onshore.

They use both fresh and salt water, extracted from deep in the ground, and they also send their wastewater thousands of feet into the ground. It’s not that this is environmentally neutral, but it is much more so than the cage farms on the water, which are killing off all the wild fish among other problems.

The stock has done fabulously even though the company is still losing money, but they have a much grander plan and this has been priced into the stock. Atlantic Sapphire is up 59% year to date, and 331% over the past 2 years.

Given its small size and still small market capitalization, this is a thinly traded stock and is only really suitable for those who plan on holding it for a number of years, such as the endowment fund of the University of Michigan, a major shareholder. The company is hoping to get a bigger footprint in the American stock market, and as people become more familiar with the company, this should drive both more volume and more demand for it, meaning more upward price action.

Producing salmon in the U.S., which imports most of its salmon, is also being pitched by the company as a way to reduce the carbon footprint of salmon. This is a far lesser deal than what salmon farms are doing, but it does add to the appeal of the company among those concerned with such things.

Atlantic Sapphire not only raises its salmon off the grid, they also take measures to ensure that the amount of toxins and plastic in their fish is kept to a minimum, instead of magnifying them like traditional fish farms do. When people start paying even more attention to the toxins in their fish, Atlantic Sapphire are in a good position to stand much more proudly than other companies who are doing nothing about this.

David Marcus, manager of the Evermore Global Value Fund, is bullish on the salmon industry overall and especially bullish on Atlantic Sapphire. Marcus sees the company going from the red to $90 million per year in profits by 2022, and over twice that by 2026.

Atlantic Sapphire represents the future of salmon farming, and thus far offer the only viable way to do this longer-term. This is a company that is still in its infancy and represents only a tiny portion of the fast-growing salmon market, but as we learn more about the real issues with farmed salmon, they stand to benefit in an even bigger way.

This is a true growth stock that has a lot of potential and likely even more than is being priced into the stock. If you want to invest in the salmon industry, it’s just simply better to go with the one with the brightest future and is virtually immune from all the rain that is bound to come down on their competitors once the world wakes up more to what they are actually doing to the environment and the health of not only wild fish but people as well.

John Miller

Editor, MarketReview.com

John’s sensible advice on all matters related to personal finance will have you examining your own life and tweaking it to achieve your financial goals better.