Fishmeal & Fish Oil

Fishmeal and fish oil are the input commodities of aquaculture, and they explain a lot about the other seafood sheets in this book. Small, oily, fast-reproducing wild fish, principally anchoveta, along with menhaden, sardine, and capelin, are caught, cooked, pressed, and dried into a high-protein meal and a separate oil. The meal is a protein concentrate of around 65 percent protein, far richer than soybean meal, and the oil is the main commercial source of long-chain omega-3 fatty acids. Roughly five million tonnes of meal are produced a year. It is a small market by tonnage that sits underneath much larger ones.

Peru is the pivot, supplying on the order of a fifth to a third of world fishmeal depending on the season and exporting over a million tonnes a year. The Peruvian anchoveta fishery is among the largest single-species fisheries on the planet, and that concentration is the market's central feature: one country, one species, two fishing seasons a year, and a government that sets the quota.

Why Peru specifically, rather than any other coastline, is a question of oceanography. Southeasterly trade winds blow along the Peruvian coast and push surface water offshore; cold, nutrient-rich water rises from the deep to replace it. That is coastal upwelling, and the Humboldt Current system off Peru and Chile is the most productive example of it on earth. The rising nitrate and phosphate fuel enormous phytoplankton blooms, and the anchoveta is a filter feeder that eats plankton directly, which makes the food chain about as short as a food chain gets. Every step up a food web throws away perhaps ninety percent of the energy, so a fish that eats plankton converts sunlight into harvestable protein with far less waste than a predator does. Stack those two facts and the numbers become absurd: the Humboldt system covers roughly 0.1 percent of the world's ocean surface and yields up to 15 percent of the global fish catch and something like half of all the fishmeal made anywhere. The northern Humboldt delivers five to eight times the landings per unit area of any other upwelling system. Peru is not a big fishing nation because of its fleet. It is a big fishing nation because of a wind, a current, and a fish that eats one trophic level down.

The same mechanism explains the fragility, and 2026 is the live demonstration. Peru set its 2026 anchovy quota at 1.9 million tonnes, the lowest in a decade and 36 percent below the 3 million tonnes allowed in 2025, then repeatedly extended fishing suspensions because of a high presence of juveniles alongside warming water from a coastal El Nino, with weak warm conditions expected to persist into early 2027. The price response has been violent. Fishmeal reached about 2,580 dollars a tonne in June 2026, an all-time high, up roughly 80 percent year on year and above the previous record set during the 2014-15 El Nino. The squeeze is worse in fish oil than in meal, and because these are the base ingredients of aquafeed and of omega-3 supplements, the cost is now working through salmon and shrimp farming worldwide. Note what the quota cut is protecting: juveniles are next year's spawning biomass, so Peru is choosing a smaller catch now over a damaged fishery later, which is precisely the decision that keeps this fishery alive after the 1972 collapse taught everyone what the alternative looks like.

That is also why this is the cleanest El Nino trade in commodities. The anchoveta depends on the cold Humboldt upwelling; warm-phase El Nino events disrupt it, and Peru's response is to cut or cancel a season outright rather than fish into a damaged biomass. Supply is therefore not merely reduced in a bad year, it is administratively switched off, and the price responds violently. The 2023 cancellation is the recent example. No grain market has an equivalent: a drought reduces a harvest, it does not delete it by decree.

Demand comes almost entirely from feed, and it has migrated over time. Fishmeal was once fed heavily to pigs and poultry, but as the price rose relative to soybean meal those users substituted away, and the remaining demand concentrated where nothing else works as well: farmed carnivorous fish and shrimp. Salmon needs the amino-acid profile and the omega-3; shrimp performs better with it in the diet. Fish oil demand splits between aquafeed and a human nutraceutical market for omega-3 supplements that can outbid the feed sector. So fishmeal is the input to salmon and shrimp, and its price passes directly into theirs, which is why a fishmeal spike shows up months later in the cost base of two other sheets on this site.

The industry's constraint is biological, not commercial, and this is the fact that shapes its future. The forage-fish catch cannot grow: the stocks are fully exploited, quota-managed, and removing more would damage the ecosystems and the larger fish that depend on them. Aquaculture, meanwhile, keeps growing. The gap has been closed by reducing inclusion rates, so a modern salmon diet contains a far smaller percentage of fishmeal than it did twenty years ago, and by substitution into soy protein concentrate, rendered byproducts, algal oil, and insect meal. The fish-in fish-out ratio has fallen sharply as a result. The direction of travel is clear: a fixed input feeding a growing industry means the input gets diluted, and the interesting question is what replaces it.

Pricing is cash and origin-based, with no futures market anywhere. Peruvian export prices are the world reference, quoted in dollars per tonne by protein content and freshness grade, alongside quotations from Chile, Denmark, and Iceland. IFFO, the marine ingredients trade body, publishes the production and stock data the market watches. A long-history price series exists, which is more than most of the seafood complex can say, so the fishmeal price is one of the few places where the economics of aquaculture can be seen directly.