Similar to many people, if offered a type of fish to eat, the first choice would be salmon. Outside of eating it, how and why it reached the table were never really thought about. Many books have been written about salmon, but the one which was recently read was called Salmon – the Decline of the BC Fishery by Geoff Meggs published by Douglas & McIntyre, Vancouver, BC, 1991. The book is a history of mismanaging one of the world’s greatest natural resource – the salmon. The history of the Pacific salmon reads similar to any other resource in North America – everyone sees miles and miles of resource and believes there can be no limit to the resource. A combination of greed, technology of the day and not being concerned about the future leads to many ups and downs of the resource. In the case of BC, originally Europeans were looking for a easier way to the spices of South Asia, but they found North America in the way. In British Columbia the search for furs was fruitful but the real harvest was fish, forests and mining. Similar to California joining the rest of the states with a railroad, the country of Canada was connected together with a railroad and since then – frozen salmon have been on many plates. The real money in fish is canning it – those tins of tuna and salmon which many people buy and expect to see at their supermarket.

In British Columbia, there were the early canners who made considerable profits and for the most part shared money with the reasonably independent fishermen and the people who worked in the canneries. As time goes by, consolidation of canneries happen – the fishermen are no longer independent for they essentially have one or two places to sell their fish to for they are nominally employees. Being employees means a different wage scale and wage pressures come into play.  This pattern is typical of how many industries change to ensure reasonably consistent profits from a resource.

In between, is the new machinery or innovations in the fish plants (which allows to process more fish with less people); in relatively resource rich areas there is the seemingly conflict of interest of government ministers (who are getting rich) from the resources, the method of harvesting the resource and given the terrain or the mountains of the west coast – what is more important moving mountains or the environment. In BC and other places from Alaska to Mexico – stories about which resource is more important and the effect of railway building or road building or mining wastes on the rivers are easily found. Generally the rivers tend to lose until they are cleaned up and thank goodness the fish and other wildlife can return to do their thing. In the case of Salmon – their life cycle includes born upstream in the river, billions are born, the ones that survive swim to the ocean for a few years and when their time to reproduce comes they find the river and the stream they were born in and swim upstream to reproduce. Logically there are many challenges – both natural and man made along the way. Man produces more challenges than nature.

Linking to dividend paying stocks, often times we think of industries that happen in the past 20 years, but an industry such as canning salmon has been going on since the 1800’s. small at first and then growing, over expanding due to the size of the salmon runs – a seemingly inexhaustible supply, consolidating and still existing as we see it today. Attitudes have changed over the years, the early years there was little conservation and use of fish hatcheries – there was the fish are there we should harvest them for profit. In the case of a dividend paying stock, they have to evolve so they reflect the consumers desires. Today we expect the sea food to be sustainable, the grocers had to evolve to do that and then we worry about eating the fish rather than the industry. In every industry there are multiple challenges, how does management rise to the occasion?

There are more questions than answers, till the next time – to raising questions.