Anchovies
July 5, 2026
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NOTE TO READERS:
Due to compliance issues, I will not be publishing my daily/weekly notes on this site henceforth. I may publish articles like the one below, that are more for personal entertainment.
I began writing my notes as a way to organize my own thoughts. I never put my notes behind a paywall, because I personally am sick of having to subscribe to everything. I don’t like it, so I don’t do it, though in the future I might find it necessary to create a subscription for weekly pieces.
If you like my daily notes and are in the trading community, email me at alex.manzara@stonex.com and I can add you to my email list. I DO make my income from commissions, so I DO once in a while remind people that I can clear your business and or/execute listed interest rate options. I do NOT use personal information for any other purpose and I don’t spam out notices unrelated to market info… again, I don’t like that so I don’t do it.
Thanks, Alex (MNZ)
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Last week, Bloomberg’s energy/opinion columnist Javier Blas wrote an article on anchovies. Mr Blas is a top-notch energy source, but I always enjoy the more colorful stories like this one and previous pieces on the price of olive oil. In any case, the stats in this article related to farm-fishing are quite surprising.
In 2010, I also wrote an article relating to anchovies, but mine was more of a trading-floor lore piece, which I reproduced (edited) below. But first, here are a couple of excerpts from the Bloomberg piece ‘Beyond Oil, This Is the Commodity to Watch Now’.
Due to El Nino:
Global production has plunged as much as 40% from a year ago; prices are up 80% over the same period to an all-time high. The commodity in question? The humble anchovy.
The anchovy sits at the bottom of a crucial supply chain that sustains the $500-billion-a-year global
aquaculture industry. Anchovies are the main ingredient in fishmeal, and without enough of it, global production of salmon, seabass, shrimp, oysters and other seafood will suffer, pushing
up supermarket prices.
With demand from the aquaculture industry still strong, the cost of fishmeal in the wholesale market has nearly doubled over the last year to an all-time high of $2,990 per metric ton in late June.
…today the world consumes more than half of its fish and seafood from farms, requiring a huge
fishmeal supply. At the same time, fish consumption per capita has also jumped, reaching 21.3 kilograms per year in 2024, up from 14.3 kilograms on average in the 1990s
The 2026 anchovy crisis is a reminder of the surprising ways in which the world is wired today, where a weather event in Peru pushes up fish costs in supermarkets in Europe and elsewhere. It’s a warning sign that El Nino will have significant impacts on global food prices — far greater than those from the war in Iran.
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One of the great things about the trading floors is some of the market lore that is handed down…maybe a lot of it falls under the heading of ‘urban legend’…but I keep thinking about a story I heard about the O’Connor brothers making a fortune…probably in the 1970’s.
The Chicago Board of Trade building, which sits at the base of Lasalle Street on Jackson, is an art deco gem. Limestone façade with a clock in the center, flanked by huge bas-relief carvings of a Mesopotamian trader and American Indian holding sheaves of wheat and stalks of corn. Doesn’t take a genius to figure out where that money came from (the Mesopotamians!). Currently, the street on the east side of the CBOT is a mall, with the new (1997) concrete box trading floor across from the old building.
I recall walking up to the CBOT in the late 1980’s and seeing a black Lincoln limo turn off Jackson onto this side street and glide up to the curb. Out jumped one of the O’Connor brothers. Spry like a leprechaun, white hair, trimmed mustache, impeccably tailored suit. But what really struck me was the interior upholstery. Blue plaid, undoubtedly the tartan of his family’s county. I still smile when I think of that image.
I never knew the O’Connors. Their firm became an option trading powerhouse, eventually sold to Swiss Bank. Of course, living in Chicago I did know a bunch of other O’Connors. And Walshes. And Murphys. And O’Briens. Etc
In any event, the tale I heard, which I can attribute only to memory, is the following: The O’Connor brothers were visiting Peru. Why? I have no idea… And they kept hearing downbeat stories about the local economy and wondered why. It was due to a weather phenomenon, either la Nina or el Nino, I can’t remember which*… that had ruined the fishing industry for the season. The importance of this problem was that the fish in question, anchovies, are ordinarily hugely plentiful. The change in ocean current had diverted the catch far away from the South American coast. The fish was dried and ground and used for meal to feed cattle…critically important not only to Peru, but the entire South American economy. [At the time I doubt aquaculture was even a word]
So, the O’Connors placed orders to buy up all the soybean meal they could on the CBOT, and of course the market exploded. Hence the black limo.
*At the time I heard the original version, there wasn’t as much instantaneous information. Now I just looked up a couple of things online and realize it was el Nino, which creates warmer ocean surface temps on the western S American coast that reduces the anchovy population. And I further discovered it must have been the 1972-73 el Nino which virtually destroyed the Peruvian fishing industry.
https://www.nytimes.com/1973/01/28/archives/perus-day-of-reckoning.html
Of course, that was also the time of the oil crisis/OPEC embargo when all commodity prices shot up due to inflation. Soybeans went from around $3 bushel to $8 (and now only around $11.50, amazingly enough). From mid-1973 to early 1974, WTI went from $2 to $10. For all the caterwauling about recent energy prices, a similar move would have taken us to $300/bbl.
Again, I don’t know if this story is accurate or not. But I DO know what I saw!
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Monday: ISM Services and Waller
Tuesday: Trade and 3y auction. NATO summit begins
Wednesday: 10y auction, FOMC minutes, Cons Credit
Thursday: Existing Homes and Williams, 30y auction
Warsh in front of House Financial Services on Tuesday, July 14
Next FOMC July 29
Jackson Hole Symposium is 27-29 August
