By Kolter Kalberg and Dawn Kotowicz
The majority of commercial landings for domestically caught ahi (bigeye and yellowfin tuna) sold in Hawaii go through the United Fishing Agency (UFA) auction. An auction setting, such as UFA, is often an effective means of quickly reaching short-term price equilibrium in a market characterized by volatile supply and varying degrees of quality for a perishable product – both of which typify the Hawaii ahi market.
In this post, a time-lapse week over day snapshot of the market is presented to depict certain market characteristics and dynamics that exist between commercial ahi fishers, ‘the supply’, and wholesale buyers, ‘the demand’. Besides the total quantity landed, there are many other market drivers that influence the ex-vessel price of ahi that are difficult to capture independently. Such factors include the quality of ahi, individual fish size, and buyers’ proclivity, just to name a few.
By clicking on the video link below, the relationship among some of these factors can be observed through a graphical visualization of Hawaii’s ahi market using daily data between 2010-2014.
Key notes regarding the animated video
- The top half of the animated graph is a calculated using a moving sum of a seven day period.
- The bottom portion animates the average daily price for the four fish size groups and the average daily price (black line) of all fish along with a trend (red line) accounting for the variations of several statistically significant cycles, such as seasonality and lunar effects (for smoothing resolution of the line, weekly variations were not included in the trend.)
- The Weight by Price density graph has a y-axis that is approximately linear from zero to 15,000 lbs. and then increases in a geometrically declining rate. The scale was modified to include the full range of the data without periodic adjustment to the scale.
- Prices are represented as the price per unit of weight (lbs.) and not per fish, since individual fish weights varies significantly. However, average price per pound (bottom graph) is the weighted average by number of fish for comparison.
Social science research on the Hawaii tuna market provides evidence that fish dealers buying fish from the auction show preferences for different size and quality, depending on a dealers’ market niche. Related research has found that demand fluctuates with the seasons and certain holidays. These variations occur not only in the total market quantity but also the quality and size per individual fish landed. While average supplies over the course of a week or month are relatively stable, day-to-day supplies are quite variable as is price.