Controlled expansion for the Spanish livestock sector
After years of increased production of animal protein, Spain is taking a different approach for the livestock sector. The Spanish livestock sector's strategy is now focused on a more controlled expansion and diversification of export markets. The overall Spanish meat sector, including cattle and swine, is willing to invest around €3.63 billion USD, partially through the European Union (EU) Next Generation funds, to improve animal welfare, sustainability, efficiency, and modernize the sector.
Spanish livestock production contributes more than $17 billion to the country’s agricultural production, while Spain’s meat industry has a turnover of more than $30 billion. This represents 22.6% of the total Spanish food industry, making it the leading sector with exports of $10.4 billion.
However, the new approach may lead to a contraction in livestock inventories for 2022, as producers are looking to minimize the environmental impact and to find alternative export markets for China, the largest buyer of Spanish pork.
In 2020, Spanish official data for cattle and beef showed a slight decrease in production derived from the COVID-19 pandemic and higher feed prices. In 2020, Spanish cattle slaughter declined 3.5% to 2.4 million animals. Spanish beef production also decreased by 2.6% to 677,740 tons, while carcass weight rose one percent to 279.5 kg from the delays to slaughtering because of the closure of the hospitality sector.
According to the sector, Spain’s cattle slaughter may also decrease 2.4% in 2021, mainly due to the reduction of calf slaughter, and 3.5% in 2022 due to low economic performance and Spanish cattle growers’ intention to reduce production. Spanish cattle herd ending inventories for 2022 may decline 1.1%.
In 2020, Spain ́s beef exports grew 4% to 231,000 tons and $903 million, mainly fueled by an 8% rise in exports to the EU, especially to Italy and Greece. This level of exports and a decrease in imports led to the second positive trade balance since 2000 of $289 million. This positive trend continued from January to July 2021. In 2020, Spain exported 85% of its beef to other EU Member States, mainly to the Mediterranean countries. Additionally, since 2020 Spanish beef exports experienced significant increases to Canada, Indonesia, Vietnam, and Hong Kong. According to the Spanish beef industry, in 2020 Spanish beef exports experienced a change in trade flow from North Africa to new markets. Additionally, the Spanish beef sector is still working to open China and South Korea. According to industry sources, Spanish beef exports to non-EU markets are expected to rebound to normal levels in 2021, continuing with its positive trend in 2022.
Pig production is expected to remain flat next year, as the industry looks to open new markets to compensate a decline in China's demand for pork. at the same time, the ASF outbreak in Germany has left 350,000 tonnes of pork in the EU market. Eurostat data for December 2020 shows the Spanish pig population hit another record level of 32.8
million swine animals, a five percent increase compared to the previous year. The Spanish sow population also grew 2.2 percent to 2.635 million sows and, according to the sector, Spanish sows are also expected to grow slightly in 2022. The piglets/sow ratio stands at around 27 for Spanish white pigs and 13-15 for Iberico sows, giving an average of 21 piglets/sow. According to the industry, Spanish pork production may continue growing in 2021, although at a lower rate because of reduced demand from China. Chinese demand for Spanish pork in the first semester of 2021 continued to be as strong as in 2020, but since mid-June 2021, Spanish pork exports to China experienced a decline as China’s demand lessened.
While the Spanish pork sector is still economically profitable, industry contacts remained conservative on forecasts for 2022 as a result of uncertainties in the current pork market. For this reason, Spanish pork production (at around five million tons) and exports may remain flat.
Spain is a net exporter of pork, and exports 55% of its total pork production. In 2020, total Spanish pork exports increased 21.5% to 2.7 million tonnes valued at €6.2 billion. This was mainly supported by increased exports to Asia, mainly to China. Last year, the Spanish pork sector witnessed a 60% jump in shipments to non-EU markets reaching a total of 1.6 million tonnes, of which 1.2 million tonnes were directed to China.