This is a timeline that accounts the incredible growth of the anchovy industry from the early 1900s to its collapse in the 1970s, and then examines the struggle to recover. Use it to help orient yourself to the case.

 
  • 1910s. Guano Administration Company lobbied against expansion of the fishing industry.
  • 1920s. Proposals for industrialized development of fishing in Peru unsuccessful.
  • 1930s. First successful cannery established.
    • Canned fish was the main product with fishmeal and fish oil produced as by-products from cannery residues.
    • State-owned Compania Administradora de Guano become interested in fishmeal as possible supplement to inadequate supplies of guano.
(Thorp, 1978)
 
  • World War II. U.S. market cut off from main suppliers of fish products (Japan and Scandinavia)
    • Canned fish and fish-liver oil were main sources of Vitamins A & D for U.S. troops.
  • 1942. First fish-liver canning enterprise financed from commercial banking sector
  • 1945. Fish products comprised 1% of exports.
    • There were 23 canneries in operation along the coast, of which six were plants of considerable size.
  • 1946. Wilbur Ellis Company (major U.S. fish products dealer) earns substantial profits from productions of fish liver and smoked and salted fish for the European recovery program
(Thorp, 1978)
Table 8.3 Percentage shares of major exports by value, 1930 to 1950 (based on values at current prices)
Percentage shares of total export earnings

Cotton & sugar
Wool & coffee
Fish products
Copper & silver
Lead & zinc
Oil
1930
28.5
3.3
-
20.1
6.8
29.7
1935
34.4
3.0
-
17.7
2.2
37.8
1940
28.2
5.2
-
22.3
3.1
24.8
1945
52.9
3.3
0.9
9.6
7.4
12.5
1950
50.5
4.6
2.9
9.4
11.7
13.1
This compares the values of the major exports from Peru between 1930 to 1950. Cotton and sugar clearly dominate, and fish products trail far behind.
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  • Peruvian entrepeneurs lobbied for government support of the fishing industry.
  • Private firms begin to specialize in processing fishmeal with anchovy. Over 90% of the 49 plants controlled by middleclass entrepeneurs of Peruvian and immigrant origin.
  • Improved fishing technology and increased demand for livestock feed propel fishmeal as a valuable global commodity.
    • Peruvian fishing fleet became equipped with sonar equipment to locate fish shoals.
    • Lightweight nylon nets introduced to fishing industry to replace less efficient cotton nets.
    • Anchovy accounted for about half of the world's fishmeal production.
  • Collapse of sardine industry in California bring good quality and modern efficiency to Peruvian fishers at cheap, second hand prices.
  • Peruvian commercial banks were willing to finance new fishmeal enterprises by means of short-term loans, renewed annually.
(Thorp, 1978)
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Peru has become world's leading fishing nation in terms of volume

  • Fishmeal processing plants peak at 154 plants.
  • 1964. Peru harvested 18% of total world fish catch, and produced ~40% of total world supply of fishmeal.
  • Fish products account for 25 to 30% of total export earnings, and becomes leading export sector.
  • Anchovy account for 99% of fishmeal production.
  • mid 60s. Signs of overfishing in north and central coasts. Fishing fleets begin to explore untapped fishing grounds of the south coast.
    • Fishing companies struggle to remain competitive by increasing investment in new, larger fishing boats. Firms fight to meet quotas before their competitors do. Industry now able to process 16 million tons of anchovy annually.
  • 1968. Annual anchovy catch soared above 10 million tons, meanwhile the Guano bird population plumeted from over 15 million in the early 1960s to under 5 million.

 

 

 

 

 

(Thorp, 1978)
Table 12.5 Growth of Peruvian fish catch & production of fishmeal & canned fish (1000 metric tons, annual avg)
Peruvian catch of
Peruvian production
all fish varieties
anchovy
canned fish
fish meal
1940-4
19
-
n.a.
<1
1945-9
53
-
6
<1
1950-4
153
21
13
10
1955-9
1,027
638
21
117
1960-4
6,551
6,103
18
1,046
1965-9
9,215
8,964
9
1,622
1970-1
11,610
11,272
11
2,095
1972-3
3,534
3,108
12
663
1974
3,644
841
This compares fish catch with fish production. Anchovy comprised more than half the fish catch by 1955-59. During that same time interval, fish meal production also increased dramatically. Notice the huge drop in anchovy catch and fish meal production in 1972-3.
Table 12.6 Value of fish-product exports, 1940-74 (million dollars, annual avg)
Canned fish
Fish meal
Fish oil
Other
Total
1940-4
0.2
-
-
0.1
0.3
1945-9
2.0
0.1
-
0.8
2.9
1950-4
5.3
0.8
0.2
1.5
7.8
1955-9
7.6
11.3
1.5
2.2
22.6
1960-4
6.3
87.5
10.9
2.0
106.7
1965-9
3.4
13.2
19.4
2.3
208.3
1970-3
4.8
188.7
32.5
4.6
222.1
Comparing the value of the Peruvian fish-product exports. Fish meal became a much more valuable commodity compared to the other products by 1960.
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  • Industry possessed capacity for a 30 million ton annual catch.
  • 1970. FAO (Food and Agriculture Organization of United Nations) warned that maximum sustainable yield for anchovies could not exceed 9.5 million tons annually.
  • Anchovy catch rose above 12 million tons in 1970, and 10 million in 1971.
  • Annual catch of anchovies plunged to 4 million in 1972 and 1.3 million in 1973.
  • The Peruvian Anchovy Industry no longer economically viable.

What makes the industry "economically viable" in the first place? This will be important to consider for your company's investment concerns.

(Glantz, 2001; Thorp, 1978)

source: Data for figure from FAO Fish Stat 2001.
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  • The anchovy population has been struggling to recover for 30 years, since the early 1970s.
  • Anchovy catch dropped further from 1982 to 1985 with an all time low of only 22,000 metric tons in 1984.
  • Recovery finally looked promising during the early 90s as evidenced by increased anchovy catch, but catch plummeted again in 1998.
  1. What happened around 1982 that could have led to incredible drop in 1984?
  2. What about the 1998 drop? But that also seemed to show a fairly quick recovery.
  3. Could the causes be related to each other as well as the initial decline in 1972?

 

(Glantz, 2001; Thorp, 1978)

source: Data for figure from FAO Fish Stat 2001.
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glossary
 

This web site was created by Lynn Tran at the North Carolina State University, Department of Mathematics, Science, and Technology Education on 7/12/03. Faculty advisor Dr. David Eggleston, NCSU, Department of Marine, Earth, & Atmospheric Sciences. Last updated December 29, 2003 .