Are Prices or Biology Driving the Short-Term Supply of Farmed Salmon?

The short-term relationships between the supply of farmed salmon and its market and biological determinants are not fully understood. In this article an econometric model of salmon supply is estimated exploiting monthly data on Norwegian salmon aquaculture. Our estimates indicate that supply has shifted over time due to innovations in several areas. We find that the price of farmed salmon has a limited effect on supplied quantity, giving a highly inelastic short-run supply elasticity. The biomass and seasonal factors are the main determinants of shifts in salmon supply in the short term.