Interannual and seasonal variations of the Falkland Current were studied using oceanographic data from a transect crossing the Current to the east of the Falkland Islands between 1999 and 2004. It was revealed that in austral autumn–winter of 2000 and 2002 the Falkland Current shifted from its normal offshore position westwards and entered the feeding grounds of the spring-spawning cohort of the Patagonian squid Loligo gahi located in the north-eastern part of the Falkland Shelf (at 50–51°S). A good correspondence was observed between the inshore movement of the Current in May–July with the squid abundance (in terms of CPUE) in the following September–October much further north ‘downstream’ on the Patagonian Shelf (46°S). Both age structure and earlier genetic studies revealed that squid occurred in both regions (51° and 46°S) belonged to the same cohort. Analysis of the dynamics of the Falkland Current with catches of L. gahi in both regions suggested that in years when the Current was intensified and shifted westwards (2000 and 2002), a part of squid population was likely to be displaced from their common feeding grounds much further north and aggregated on the shelf at 46°S. Reduction of fishing effort and its re-allocation to other areas is recommended in years of such displacements.