Canada bucks production cost trend
Canada is the only area within the Marine Harvest Group where production costs fell between Q3 of 2015 and the third quarter of this year, according to the company's latest report.
The report, which was published on Wednesday, shows harvested volume in the Group's Canadian operations increased to 10,284 tonnes – up from 8,668 tonnes in the third quarter of 2015 – resulting in an operational EBIT of EUR 2.63 per kg (EUR 0.14).
The report explains that the increase this year is to a large extent “due to improved spot market prices”, as well as “improved growth resulting in larger fish and a higher harvest volume, as well as larger fish fetching a higher price”.
The North American market for fresh whole Canadian salmon remained strong in the third quarter due to low export volumes from the Chilean market into the US.
According to the report, “The average price per lb gutted weight (Urner Barry 10-12 lb) was USD 3.39 per lb, which is an increase of 44% from USD 2.36 in the third quarter of 2015.”
It appears that reduced costs compared to last year are a key factor in the improved performance. As the report explains, “Biological costs per kg salmon harvested in the quarter decreased by 1.5% compared to the third quarter of 2015. The main drivers for the positive cost development are better growth, better feed conversion rate, less time spent in sea and improved health cost."
This decrease in production costs was unique to the Group's Canadian operations. Problems with sea lice, infectious salmon anemia virus, and amoebic gill disease were mentioned by the report as negatively affecting production costs in Norway, Chile and Scotland.
“Production costs for all regions except Canada have increased in 2016 due to challenging biology and higher feed costs," states the report.
