New Zealand King Salmon, unsurprisingly farm king salmon. They are world’s largest producer, having farmed, processed, and branded king salmon for going on 30 years. 

But what has happened? Shares have dropped off a cliff and are currently sitting almost 40% down YTD. This is not sentiment driven.

Whether you believe global warming is a thing or not, king salmon do. The fish have a preferred growing range of 12-17C and Marlborough Sound where NZ King Salmon grow their fish is today ~19C, up about +2.5C on average temperatures. This follows a three year "heat wave" in the waters surrounding NZ.

The rise in sea temperatures has significantly impacted the fish with increased mortality rates, and downstream NZ King Salmon profitability. The latest guidance statement approximately halved the previous guidance. 

While the company is looking to mitigate the higher temperature risk with an application for alternate farming sites, it's a tough place to be when you are dependent on the environment and it is completely out of your control.