SPC 2nd Advance / Payment methods
We received our 2nd advance summary from the SPC today... Just like last year I can't quite figure out how it works.
Please correct me if I"m wrong.
1st Advance: 70% of current SPC 'dock' price.
2nd Advance: 15% less than the total of your full SPC settlement. (85% of year-end price)
Final Settlement: 100% of year-end price.
So to find the final settlement amount you could divide the total of your 1st and 2nd advances by .85?
For example:
1st advance: $7000
2nd Advance: $3000
Final settlement would be $7000 + $3000 / .85 = $11,764
Is that correct?
Carol W
2009-01-27 00:18:02
Jon
First advance is 70% of dock price.
Second advance is 85% of final value so if you receaved 85 cents per pound total on 2nd then you should receave 15 cents on final.
That having been said i will tell you that the 2nd was on the conservative side based on current economic conditions.
Keep your hand on it
Tom
So the 2nd this year isn't 85% of final value?
Carol W
2009-01-27 00:30:39
look at it this way if final was a 1.00 a pound and you receaved .65 during season then you would receave .20 on second.
or if you receaved .75 during season then you receave a dime during 2nd your final is still a dollar i always figure i am going to get somewhere between a 3rd to 50% of the second on my final
Thanks for explaining, I definitely get it now :)
Using that calculation it looks to me like my final settlement is 4% less than actual dock prices. :(
Carol W
2009-01-27 00:44:07
I am not sure as to how much i can share but i stress to you that these prices on the 2nd advance were set so that we aren't overvalueing our inventory. The other thing to remember as a new member is that the conditions have changed dramatically since these fish were harvested. And being a Coop member you get to see changing market conditions faster than someone selling to a for profit company. In other words, other processors overpaid for their fish when you look at market conditions today verses July.
Yea, I certainly understand -- I would not have expected big returns when the economy has taken such a turn for the worse. I'm glad it's not worse! If I had to do it again, i'd still pool them knowing that over the long run it will pay off in more ways than just the money.
Carol W
2009-01-27 00:57:17
Cool and have a good day!
codfoot
2009-01-27 22:38:47
Jon,
Carol W has done a good job of explaining the sometimes confusing guidelines about how SPC pays the 2nd and final settlements. Although it is disappointing to consider the possibility of receiving less than dock price,the thing to remember is that in a downward sliding economy the Co op takes the hit first (this winter). Cash buyers who overpaid last summer will be looking to make up their losses this coming summer. The Co op, having already absorbed losses during a falling market, will be able pay what the fish are really worth in the future. I think the real worry, no matter who you sell to, is what effect stagnant processor inventories will have on the market. As soon as somebody dumps product at panic prices we will all feel the effects. If hindsight was foresight we'd all be well off; however, since my crystal ball is usually cloudy I pool all my production to take advantage of unforeseen price increases. Over the years the Co op has always averaged ahead of the cash buyers. If you're comitted to the fishery for the long run the Co op is going to make you more $. One of the hardest accomplishments in fishing is being able to hold on to a little piece of that settlement check.
Good fishing,
Codfoot
squarehead
2009-01-28 02:13:23
well, I can't say that I'm happy with my check down 50% from last year. and I know that some of the guys that cashed out loads to small time buyers are happy that they did, and I don't really buy into the theory that the other guys are going to pay for it next year,
but I know that when there are good profits I get a good return, the CO-OP gives me a slice of the pie and gravy on the side, if there is gravy to be had. the other guys don't . so even though I feel like I got sand bagged with this sad little check, and will have to take a beach job to fund some of my boat work this year, I still believe in the idea that is the CO-OP, we share in the good years, and the bad; a good bunch of fellow fisherpersons doing an above average job.
When does the final settlement check get sent out?
Carol W
2009-03-07 16:46:51
The SPC board is meeting on the 17th and we will approve the final settlement then, last year I think it was deposited into my loan account about the 27th of March.
Salty
2009-03-07 18:11:43
Tom,
Really appreciate all the work you do and the clear explanation of how SPC works on this site. Another beautiful day here in SE Alaska. Great ball game at the gym last night as Klawock beat the Yakutat boys in a thriller for the 2A SE championship.
I do have an observation. For several reasons I was unable to deliver nearly all my production to the co-op last year. In 2007 I managed to give SPC nearly all my deliveries. In most years my settlements cover my taxes. This year, because of the hefty 2008 second and final based on my 2007 production, and the paltry 2009 second and likely paltry final because I delivered my fish elsewhere, my tax bill is up and my bank account is down. Just another reason to deliver to SPC.
Watch out for me on the coho drags and the SPC unloading hoists this summer.
squarehead
2009-03-08 00:32:48
I have heard that several buyers are still holding fish they bought last year. Is the co-op?
Carol W
2009-03-08 23:09:50
Yes unfortunately we are holding inventory, however if this were a normal year (without an economic crisis) the amount in inventory would not be much of an issue. I will point out that we are in a much better position than most of our competition as we have no long term debt. It will definately be interesting to see what happens with our competition this year with credit hard to obtain will the competition be able to get their pack loans they need to pay for fish during the season is one question that comes to mind. The coop has a very good relationship with the bank that we use for our line of credit plus our members lend us money through the loan account.
As to Eric I will keep my eye out for you however don't be surprised if I spend the first part of the season off Noyes. And I expect you to deliver all your chums to the coop. I will try to give guys an update as to the tender and outport situation after the board meeting.
I started putting putty in the seams this week and learned something new for anybody who may be interested and that is if your old wood boat has been out of the water for some time instead of cement to fill seams use a mixture of 60 % cement to 50 % bearshit and a dab of linseed oil to thin the mixture this keeps the seams pliable so the damage to the seams is minimized when the planks swell.
Keep your hand on it.
Tom
tacorajim
2009-03-09 00:46:03
As pertains to Tom's last paragraph, I second the motion. Generally you would use 50:50 portland cement and Atco. But it gets so stiff It'll wreck your wrists mixing it. And use raw linseed oil instead of boiled. The boiled has a hardener like 'jap drier', whereas the raw penetrates those seams. Not that you'd notice the difference if you sell the boat in 5-10 years. It sure goes on easier than the old mortar.
squarehead
2009-03-09 00:54:20
bearshit, cement, and bottompaint is the mix I've been gluing my wooden tub together with, this year lI'll try linseed.
so FAS boats might get a check or a bill? I can wait to find out, but if ya know..... thanks
Carol W
2009-03-09 17:10:27
I have not heard that the FAS boats will be getting a bill, I know that the other FAS buyers are crying the blues. One notable FAS boat/buyer based in Port Townsend stops buy the boat each week and tells me how he could have bought his FAS fish from the COOP instead of his boats and been better off, however I think he is just crying rhetoric. We at the board level have amongst ourselves discussed the importance of NOT SENDING BILLS OUT and to make sure that we acheave dock price. So it may not be a whopping check but I am fairly confident the board will do what is needed to avoid sending a bill. I know this is a very murky response and am sorry for that but at this point it is the best response I can give.
Keep your hand on it
Tom
squarehead
2009-03-09 18:19:53
thank you!
salmontroll
2009-03-18 21:05:23
How was the board meeting? Did we at SPC at least return dock price??? It looks like the economy could be strengthening, and salmon is in demand and selling for a good price here.
Salty
2009-03-20 17:00:48
I have heard second hand that decisions have been made. Maybe someone who knows better what the results of the recent SPC Board meeting were can inform us here.
Carol W
2009-03-23 03:15:42
The final check should come out this Fri, unfortunately it is not as much as we would all like, how ever it is a check and not a bill. We didn't get to dock price however we are fairly close and that is pretty good in todays economy when you consider all the factors. The meeting was a tough meeting and the market situation is bleak to say the least, it sounds like there is inventory piled up at every processor. We will see lower prices for all species this year and in some cases I would not be surprised to see our competors turning boats away.
It looks like the cut in the Halibut quota is not a cut in supply, meaning that there is so much halibut piled up in various freezors that the supply stays the same. With peolpe not buying and restuarants pulling it from the menu Halibut could lose 2 bucks or greater a pound.
There seems to be some hope for salmon in the fact the Chileans should be out of fish very soon with no new supply so there is some posturing and interest but one should be cautious. The other thing that clouds this renewed interest is that most of SPC's fish go to high end restuarants and with the recession the people who dined high end now have stepped down a notch thus creating a domino if you will in that everybody just traded their dining down a notch.
I remind you as coop members we feel the pain first and I think it is reasonable to expect lower buyer interest and prices this coming season. How low on prices is still hard to get any handle on however it will be down and quite drastically.
We did spend considerable time on outports and while plans are still being formulated the situation in Craig should be improved this coming season. We are also exploring avenues to increase service in Chatham this coming season.
Sorry to be the bearer of bad news.
Tom
Salty
2009-03-23 16:54:43
Tom, I have really come to appreciate all the good work you do in the last year or so. I really appreciated your presence and your abilities at the BOF meeting. I really appreciate your informative posts on this site. I am sure you do a great job for us on the SPC Board.
And thank you for the spoon so I can't reveal the one gaffe at the BOF. As co-op members we will be fine. I am already hearing good things about the salmon price on the species that can make a difference for trollers......chums.
salmontroll
2009-03-23 21:18:04
Thanks Tom for filling us in. Shoot, looks like things are going to be tough. High fuel price, low fish price..... Maybe Obama will bail us out? hmmmm Better yet, let's just all go out and catch twice as many fish!
Katlian
2009-03-24 03:53:24
So, does the final settlement reflect what the 2008 fish were really worth? Or was the reality worse than the membship would find palletable.
I heard rumor that the co-op was propping up the 2008 prices to make the pill a little easier to swallow. Is this pure rumor and conjecture. Part of the allure of the co-op is its reputation for not playing games with the prices. I would prefer a bill than a slide toward the shell game.
slr
Carol W
2009-03-24 15:09:17
The final settlement is a reflection of what the fish were truely worth and it wasn't that bad looks like we will average between 92% and 96% of dock. We are still holding inventory in all species except B Cod, and we are not sure as to the price the inventory will be valued at when it is gone. Lowering our price doesn't move inventory this year as the restuarants and grocery chains won't lower their prices, they insist on protecting their margins, consequently we receave less and the inventory still sits there.
The thing to keep in mind is with new fish coming into the market even though you may have receaved a slightly higher price from another buyer the coop is financially strong and we will weather this economic mess. The other buyers will definately be looking to protect themselves and to not only make up for their losses in 08 but also not put themselves in the same position in 09.
The other thing to remember is with every downturn there is an upturn and the coop is position to take advantage of the upturn.
Now is the time to stick with your company and not go down the road for the promise of a nickel that well may not be there.
Tom
Salty
2009-03-24 19:54:46
Great answer Tom but I am not sure it was to the question Katlian asked.
Carol W
2009-03-28 15:50:42
sorry i spilled coffee on the puter the final settlement is actual prices and not a shell game.
Salty
2009-03-28 17:00:19
I like this answer better. Boy did we do good on round chums and troll lingcod bycatch.
The spilled coffee is why I have gone to replaceable keyboards and even though a laptop is now my desktop it is safely back where spilling can't get it and I have a nice ergonomic keyboard and 21" flat screen plugged in.
Thanks again Tom.
squarehead
2009-03-29 00:49:51
how many boats can the dog patch support? with the way you been talking it up you may have a lot of company.
Salty
2009-03-29 04:12:01
Dog patch extends from Dixon Entrance to Cape Spencer most years. I have targeted troll chums myself from Cross Sound to Neets Bay including in Icy Straits, at Excursion Inlet, at Hidden Falls, off Redfish Cape, at Cape Omaney, off Yakobi Island, off Biorka and Kruzoff Islands, and in Sitka Sound.
Trollers need to develop the attitude that they can catch all five species of pacific salmon and that there is good reason to target all of them at times. Humpies have been an important part of the financial equation for lots of us including my mother and Bill George when they first bought the I Gotta. While I have never been successful targeting sockeyes specifically I have had numerous trips where they were an important part of the paycheck.
Dog patch becomes crowded in some years with as few as a dozen boats depending on how the fish and the guys behave. Other years fifty of us can all work in different areas with little conflict. There are several different styles of fishing and some work better some seasons than others. Some of the regulars are an absolute joy to fish around and we all do our own thing at about one knot. Others just can't seem to find their own fish or resist following some of the long time chum fishermen around. While we all understand people flowing to the fish or the drag where the fish are it gets real old when some guys are in your float bags no matter where you go every day.
Chum fishing seems to be different every year and at every site. The same troll rules and ethics apply except that no one can go too slow on the chum drag because the slower you can fish the better. Many guys can't slow their boats down as far as others so there is no regular drag so to speak. Often different guys are using different strategies as far as depth to get the most bites so you can have guys fishing 50 and 15 fathoms of gear on the same drag going anywhere from less than a knot to nearly two knots. Some guys have sonar and are tracking and trying to stay on schools while other guys are just towing back and forth up the channel. Some guys will get a school on their gear and be making figure eights to keep them biting and following while others will slow down and keep dragging straight while they are getting bites. Some guys will run around hours looking for fish before they put their gear in while others plop it in at the same place every day. Some guys seem to prefer digging the chums out of rockpiles while others prefer dredging them up from the deep channels.
Add to that a whole bunch of shrimp and subsistence halibut buoys and Cruise Ships in Eastern Channel and you have the makings for a whole bunch of fun. I personally have had a close encounter with a cruise ship, the Nordam, and ended up replacing a shaft and stern bearing after running over a shrimp pot buoy line.
Because of all these factors it is a much different fishery than trolling Chinook or coho. But it is nothing like the crazy herring seine fishery that I just witnessed today. One guy ended up with his skiff wheel tangled in another guys net, his own net hung up and in his wheel and a third guys skiff tangled in his net. All on the first set. He had two dive boats working for over an hour getting him untangled. It was the most intense cluster ----- I have ever seen and I have witnessed numerous herring openings.
Some years the chums come in and start biting over a large area and the fishery is relatively pleasant. Some years they pop up day after day in about one square mile and drive everyone crazy. But, that is fishing. Some of us love the chaos while others can not stand it and would rather starve than troll chums.
I would rather that we did not need to promote this fishery. I would love it for 20 or so of us to be able to peck away in relative obscurity. The political dynamics are such that we will lose the fishery and a good percentage of our enhanced salmon allocation unless more trollers take more advantage of the chum opportunities at the different sites. Or a few of us started catching at a much higher rate.
For those who are already fishing chums and are aghast at my unabashed promotion I say this: without the chum trollers and other trollers including ATA's political work over the last few years we would not have the chum troll opportunities we have in Eastern Channel and at other areas. Without the troll fleet believing chum trolling is an important part of the troll fishery we will lose it and millions of dollars. I would rather battle other trollers for the fish than lose them to the nets.
squarehead
2009-03-29 06:06:03
so we will have to get some dog tenders and have a plan for FAS eggs, if boats are going to target dogs days away from the plant.
Salty
2009-03-29 16:44:36
My experience is that it is best to keep personal business plans confidential. If you have not already arranged tender service and FAS egg markets for this season you are probably late. The best tenders have already been contracted and the best freezer boat deals have already been sealed. But, it is not too early to be thinking about freezing eggs and contracting tenders for 2010.
Back to the topic of this thread. SPC has an excellent plan for freezing chum eggs and did well with their chum marketing last year. If you are not a member and plan to troll chums near Sitka it is another reason to join.