SMAM will be an integrated empirical modeling framework to estimate and simulate the effects of policy, economic and resource factors on the supply, demand, price and global trade of salmon. Based on this, we will also be able to predict future profitabil ity levels of the salmon farming industry, based on current production practice. In addition future scenarios based on policy changes can also be modeled. In late May 2006, the price of fresh salmon exported from Norway was 40 NOK. One year later the pric e was 26 NOK, a decline of 35%. Throughout the history of salmon farming, such volatile prices are a recurring phenomenon, and the industry has seen periods with both huge profits and losses. In essence, due to a fairly long biological production process and continuous productivity and market growth, a mismatch between supply and demand has led to these volatile prices and changes in profitability. This creates both short and long run production cycles. To understand future price movements we need to unde rstand both the supply and the demand side of the market in a joint framework. In this project, we intend to model and simulate the global production, demand and trade of salmon in a joint framework. Based on this, we will be able to predict future produc tion levels of salmon, in addition to future demand, trade and price levels. To do this is now possible, since we have access to unique data, both on the production side, and on the market side. As a part of this project, the three participating universit ies will establish a research centre
that will coordinate the research tasks, and the three PhD students. The research centre will be called SMAC, the Salmon Market Analysis Centre. This is a joint effort by the University
of Tromsø (NCFS), the University of Stavanger (UiS) and the Norwegian University of Life Sciences (UMB).