The cost of feed accounted for 65% of the increase in production cost in 2022.
Since 2016, the production cost per kilogram for farmed Atlantic salmon has surged by approximately 45%, as reported by consulting firm EY’s annual Norwegian Aquaculture Analysis.
The salmon farming industry in Norway has grappled with a series of challenges, including disease, sea lice, extreme weather, and escalating raw material costs, according to the report.
In 2020, a combination of increased production per kilogram and reduced revenue per kilogram led to the lowest EBITDA margin (~20%) since the inception of reporting on the industry.
Despite record-high revenues in 2022, production costs per kilogram also reached unprecedented levels, hitting NOK 49 ($4.67).
The report, anticipating the impact of a high inflation regime, forecasted in its 2021 edition that the cost of stock would rise—a prediction confirmed in 2022 with the release of stock reflecting elevated costs.
“While all cost components have experienced an increase, it is primarily the cost of goods sold, particularly the cost of feed, that drives the cost escalation,” noted the report.
Statistics from the Norwegian Directorate of Fisheries reveal that the cost of feed accounted for 65% of the increase in production costs in 2022.
