OC, You are correct in the statement that much of the worlds fish production is going into pellets for fish farms. A whole lot of other thing are going in there too, besides "forage fish". North sea draggers harvest everything they are allowed, just to feed the processing plants for Norways farms fish pellets.
The offal from plants in north america that are processing fish is some times added to make Pellets that go into domestic farms, mostly from Kodiak.
The production in Chile is rising so fast I can't imagine where there getting the volume of food they need. Talk about an economy of scale the Chilean Farmers can deliver a 6lb. Coho salmon to Japan with the shipping included for $.90 US per pound. This was nearly $3.00 just a few years ago.
By the way when you lump all comercial fisherman together as one large group screaming about fish farms and then running of to deplete the worlds forage fish you sound about as prejuidiced as me when I see people fishing with styrofoam floats on there Spey Rods.
Seriously an awful lot of blame for overharvest should be layed at the feet of Fisheries Managers for they are the ones who allow the various fisheries to proceed.