A Key Peninsula geoduck farm on the tidelands of Case Inlet, managed by Taylor Shellfish Co. Photo: Lisa Bryan, KP News
The ultimate impact of the novel coronavirus that has taken the world by storm is still uncertain, but for the shellfish industry in Washington state, at least short-term, the results are in. It has been devastating.
“The coronavirus has had a huge impact on geoduck harvesting. Nearly all the harvest goes to China, so the closure of that market in January meant that all but a small portion that goes to the local market ended,” said Eric Sparkman, shellfish biologist for the Squaxin Island Tribe.
Jim Gibbons, president of Seattle Shellfish, said that about 90 percent of their business is the Chinese geoduck market and with closure of the restaurants there, they have had to cut operation costs.
“We have laid off a lot of people,” Gibbons said. Half of his workforce lost their jobs.
Bill Dewey, Taylor Shellfish director of public affairs, said their sales of oysters and geoduck to China stopped just before the Lunar New Year, one of their biggest times. The result was a 20 percent decrease in income compared to last year.
“We have laid off a lot of people.”
Geoducks are farmed in intertidal beaches throughout South Puget Sound, including many sites on the Key Peninsula. Seattle Shellfish has two small farms on the KP, and Gibbons said that they are fully planted and should not be affected. If the market does not rebound soon, the clams will simply be left to grow until it does. “Geoducks live for 100 years, so if they don’t get harvested, they will just get bigger,” he said.
Native geoducks are harvested from subtidal tracts, with harvests shared between the tribes and commercial companies that purchase harvesting rights from the Department of Natural Resources. There are tracts at the mouth of Henderson Inlet, at McMicken Island State Park and Dougall Point on Harstine Island; near Fox Island; off McNeil Island near the site of the former penitentiary and Still Harbor (on the east side of the island). The Wyckoff Shoal tracts have been closed since 2016.
“But if the crisis continues, a full year could have impacts of $2 million or more.”
Sparkman said that harvesting native geoduck is a relatively new business and they are still determining how best to sustainably harvest this natural resource. Current practice is to identify tracts, harvest one until it is depleted and then allow it to recover naturally. “Recovery is highly variable but takes at least 15 years and perhaps as long as five times that, judged by the desired density based on the initial survey of the site and, more importantly, the rate of recruitment of new geoducks on each site,” Sparkman said.
The coronavirus came relatively late in the harvest of native geoducks, somewhat limiting the economic impact on the Squaxins. Their geoduck business employs about 90 people, though most are part-time. Sparkman estimated that losses could be as high as $150,000 by the end of the season.
“But if the crisis continues, a full year could have impacts of $2 million or more — this is highly dependent on the market price of geoduck, which fluctuates greatly,” he said.
The coronavirus crisis led to a loss of income of as much as $1million a month from Taylor Shellfish’s Washington operations, leading to a workforce reduction of about 40 people from a workforce of approximately 700, primarily in the shellfish growing part of the business.
“The majority of the reductions are classified as ‘standby,’ meaning these employees will be allowed to collect unemployment without having to document efforts to seek new employment, and those eligible for benefits will maintain their insurance coverage through the standby period. We hope that all standby employees will have returned to work by April 9, dependent on improved sales demand,” Dewey said.
DNR communications manager Joe Smillie said that the coronavirus compounded a market downturn already underway due to the tariff war with China. The state auctions the right to harvest six times a year. Companies bid by the pound and pay at the time they sell their harvest.
“In 2017, we got $16.05 per pound for the wild geoducks. The 2018 average was $11.31 per pound,” Smillie said. “Our auction prices started seriously dropping in July 2018 when China instituted 25 percent tariffs in retaliation for the tariffs the U.S. put on Chinese goods.”
Last September, China added an additional 10 percent tariff, and that dropped prices even lower, he said.
“We got $6.11 per pound in that October’s auction, and $4.06 per pound at our auction last December. Prices rebounded at an auction we had last week, where we got an average of $5.78 per pound, but we also offered to refund buyers for days they can’t harvest given the uncertainty of the markets,” he said.
Smillie said that state revenue from geoduck sales, historically more than $20 million each year, is projected to fall to $13 million in 2020.
“For us, the money is key because it’s how we fund our aquatic restoration projects and marine science. It also hurts other restoration efforts because most of our geoduck auction money goes into the Aquatic Lands Enhancement Account that funds Puget Sound restoration.”