The Dynamics of Profitability among Salmon Farmers—A Highly Volatile and Highly Profitable Sector

Abstract

Salmon farming stands out from many other industries with its very high profitability, but it is also highly volatile. The main question is whether the profit of individual firms is stable, or whether profitable firms change from year to year. The purpose of this article is to apply the theory of profit persistence to answer this question for salmon farming in Norway. By using panel data from 2010 to 2019, available from public statistics, we study the relative deviation from the average profits. We estimate the speed of adjustment to the profit norm by using a dynamic GMM estimator. We find a high degree of convergence to the average profit among salmon farmers. For companies belonging to the group with below-average profit, there is a positive correlation between growth and profitability and a negative link between debt ratio and deviation of profit rate. Our finding is that although the Norwegian aquaculture industry has large profits, there is large volatility in the profits of this industry. This is useful knowledge for investors, lenders, public authorities and others who need to know something about the risk in the aquaculture industry.

Antimicrobials in global salmon farming: Resistance, effect on human health and the environment, and future perspectives

“…Este crecimiento se ha dado con el desarrollo de infraestructura, tecnología, investigación y con la implementación de estrategias de manejo sanitario para la cría de estos animales a gran escala (Poblete et al, 2019). Por el contrario, aunque la demanda de esta carne también ha ido en aumento, también es de conocimiento público las problemáticas económicas y medio ambientales que enfrenta este sector (Opstad et al, 2022). El uso de insumos químicos como los antimicrobianos aumentó durante la última década en países como Chile (Quiñones et al, 2019), aun cuando estas cifras no son exactas debido a los bajos reportes respecto a cantidades usadas en un área y tiempo determinado (Millanao et al, 2018); mientras que se redujo considerablemente en Noruega y Canadá (Trueman et al, 2022;Morrison & Saksida, 2013), la principal razón se debe a enfermedades que son de difícil control y uso sin prescripción de un profesional.…”