Cracks in the Permanent Scarcity Paradigm – why salmon licenses may be the next taxi medallion bust
At NOK 305,000 per mt, a Norwegian salmon farming license now costs more than a Manhattan taxi medallion did at its peak—before Uber broke the scarcity model overnight.
That’s not a metaphor. It’s a mirror.
Over the past decade, regulated scarcity turned salmon licenses into financial assets. Lenders underwrote them. Equity models capitalized them. Scarcity wasn’t just priced in—it was collateralized.
But salmon isn’t the first market to confuse regulation with permanence. And it won’t be the last.
Act 1 – Boom and Bust (1990–2007)
In salmon’s first “Blue Revolution,” the industry scaled fast. Global farmed supply grew ≈15 % per year, far outpacing demand growth. The result? Prices collapsed. Spot NOK/kg peaked at 32 in 1997 and dropped below 17 by 2001.
The financial fallout was just as brutal. Fjord Seafood collapsed. Pan Fish merged in desperation, then rebranded. Margins evaporated. Investors fled. I lived through that salmon farming era, and it wasn’t pretty. Here on the east coast of Canada, dozens of local farming businesses collapsed and only a few survived.
The lesson they took away? “Supply growth kills the party.”
Act 2 – Scarcity Turns into Strategy (2013–2024)
Then came the great slowdown. Sea lice caps, traffic-light regulation, and a frozen license pool stalled growth to under 3 % per year. But prices surged. Spot hit an all-time high of NOK 111/kg in 2023. EBIT/kg broke records. Scarcity became strategy and salmon farming became a high margin earner for those companies still in the game.
Banks took note—and started lending 50–60 % loan-to-value against licenses themselves. The asset wasn’t the fish. It was the right to grow them. In the majority of publicly traded Norwegian salmon companies, farming licenses constitute the second largest asset class on their balance sheets.
In the 2024 Norwegian license auction, the signal was clear: Licenses cleared at NOK 305,000 per mt.
Translation: Investors believed in structural scarcity. And they priced it like they believed it would last – buying a 20-year salmon license at these prices suggests a belief that high prices and margins were here to stay.
Act 3 – The Next Flip (2027–?)
But what if it doesn’t?
Enter offshore vessels. Chinese companies have launched several in the past couple of years, the latest with a projected capacity of ~15,000 mt HOG, built outside Norwegian MAB, outside the lice rules, and outside the license system entirely.
By 2029, eight hulls are scheduled to be in the water. Together, they’ll add more volume than Norway’s entire 2024 green-zone expansion. Without bidding a single krone. Once they have a model they are happy with, they have more than enough shipyard capacity to scale rapidly.
Oslo’s May 2025 Fremtidens Havbruk white paper proposes scrapping the tonnage‑based MAB licences altogether and replacing them with tradable ‘environment‑impact’ quotas that expand or contract with each site’s real‑time sea‑lice score—potentially releasing significant new capacity as early as 2026 if Parliament backs the plan.
According to Kontali’s rule-of-thumb, a 1 % swing in global supply moves spot prices by 6–8 NOK/kg. So yes—this matters.
If regulation created scarcity rent, and drove prices into the stratosphere, technology and changes to regulation can unwind it.
And once investors stop believing in the ceiling, the floor can collapse.
Just ask anyone who bought a taxi medallion in 2013.
Three Questions Every Investor Should Be Asking
What happens to NAV if license prices revert to 2013 levels?
How will you refinance license-backed debt if LTV ratios are breached?
What’s your Plan B if salmon becomes the new milk—abundant, cheap, and unloved?
This isn’t a forecast. It’s déjà vu.
Scarcity was the bet. Offshore scale is the catalyst. The story is flipping—again.
Are you ready this time?