From bratwurst to jamon: EU pork sector crown shifts to Spain

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  • Spanish growth fuelled partly by exports to China
  • Production in Germany falling as Spain’s output climbs
  • Germany’s largest slaughterhouse invests in Spain

MADRID/HAMBURG, Oct 6 (Reuters) – When he was a toddler in Avila province, Albert Pascual’s father purchased 100 pigs, however the firm he now leads has greater than 9,000 – a part of a significant growth that has put Spain on observe to take over because the European Union’s prime pork producer this yr.

“My father sold pigs at a time, in the 1990s, when this sector practically did not exist. Now we (Spain) are a world power, we have grown a lot and our company has grown in parallel to the development and growth of this sector,” Pascual stated.

Germany has lengthy topped the desk of EU pork producers, however an outbreak of African Swine Fever (ASF) in September 2020 amongst wild boars meant it misplaced entry to the profitable Chinese market.

That has accelerated a shift in EU manufacturing in the direction of ASF-free Spain that was already underway, helped by its much less onerous rules in areas corresponding to planning and use of manure.

China is by far the biggest export marketplace for EU pig merchandise, accounting for about 56% of gross sales to date in 2021, based on European Commission information.

The nation’s urge for food for imported pork has soared following its personal ASF outbreak which has ravaged its huge hog herd, the world’s largest.

“The fact that in recent years it (China) has been affected by African swine fever has caused demand to skyrocket,” stated Ramon Soler Ciurana, export supervisor of Faccsa-Prolongo, a pork producer in Malaga within the south of Spain which is increasing its pork packaging and freezing amenities.

EU shipments of pig merchandise to China totalled 3.34 million tonnes final yr, up greater than 60% from 2.31 million in 2019 and virtually triple the 1.28 million in 2018.

Exports have remained excessive this yr and totalled 1.86 million from January to July, down simply 0.1% from a powerful 2020, EU information exhibits.

“It is taken for granted in the industry that China, no matter how hard it runs or tries to find alternatives, will not be able to get back to normality within four years,” Soler stated.

GERMAN WOES

Germany’s export woes, nevertheless, have solely accelerated a development that has been creating for years.

Spain’s pigmeat manufacturing totalled 2.60 million tonnes through the first six months of 2021, up 4.1% from the identical interval final yr, based on European Commission information, and is observe for an eighth consecutive annual rise.

In distinction, Germany’s pigmeat manufacturing fell by 1.3% to 2.52 million tonnes and is heading for an fifth consecutive annual fall.

German market consultancy AMI says there have been 24.6 million pigs on German farms in May 2021, down 3.5% from 25.5 million in May 2020, persevering with a downward development from 28.1 million in 2014.

The impression of ASF has been notably extreme in east Germany close to the border with Poland the place the illness has been present in wild boars and extra lately home pigs. Measures corresponding to a ban on breeding piglets have been imposed and a few slaughterhouses have been reluctant to purchase pigs from the area.

TOUGH RULES

Tougher animal welfare and environmental guidelines in Germany have contributed to the decline in pig farming together with falling home demand for the meat, linked partly to extra health-conscious consuming with avoidance of pink meat and strikes amongst younger individuals to vegetarianism.

Germany has strict planning guidelines which has made it troublesome for the trade to adapt to animal welfare laws associated to points corresponding to the usage of sow stalls.

“Even if German farmers want to invest in new pig stalls, they often cannot get planning approval from local authorities,” stated Andre Vielstaedte, a spokesperson for Toennies, Germany’s largest slaughterhouse and meatpacking group.

In a part of Germany, restrictions have additionally been imposed on the usage of manure, linked to considerations about excessive ammonia focus within the air.

Spanish pig farmers, in distinction, profit from sturdy demand for slurry, a pure fertiliser made out of manure and water, as soils in a lot of the nation have turn out to be depleted and lack ample natural matter.

INVESTMENT IN SPAIN

Toennies is amongst these investing in Spain.

The firm, primarily based in Rheda-Wiedenbrück within the west of Germany, is constructing a meat packing and slaughterhouse plant in Calamocha in Spain, costing about 75 million euros ($87 million).

Operations will begin in 2023 and the plant will slaughter 2.4 million animals a yr, with as much as 1,000 jobs created.

“The pork market in Spain is looking attractive and the political framework is positive,” stated Toennies’ Vielstaedte.

“Our new Spanish plant will be aimed exclusively at exports to markets including pork ribs to North America, bellies to Japan and other products such as pigs’ feet and ears to China and elsewhere in Asia.”

Vielstaedte stated Germany remained the corporate’s “core market,” however ASF was only one issue making it much less engaging for pig farming and the worldwide advertising of pork.

“We have a one sided regulatory burden … as animal welfare and protecting the environment create extra costs and need new investment, but which are often not faced by farmers in other countries,” he stated.

CHALLENGES AHEAD

China has continued to report outbreaks of ASF this yr, together with in three of the highest 5 pork producing areas, Henan, Sichuan and Shandong, with imports set to stay excessive in 2022.

The U.S. Department of Agriculture’s Foreign Agricultural Service forecast earlier this yr China’s pork manufacturing would fall 14% in 2022, reflecting a smaller hog herd and low earnings for home producers.

It projected imports would whole 5.1 million tonnes in 2022, simply shy of 2020’s document 5.28 million.

Prior to its personal ASF outbreak, nevertheless, China was solely importing 1.5-2.0 million tonnes of pork a yr and trade sources count on imports to finally gradual as its herd is rebuilt.

“This is one of the great challenges we face,” Soler stated.

“Obviously the Chinese market will return to normal sooner or later and we will return to pre-crisis figures. The objective of maintaining the level of production will depend on our capacity to open new markets.”

($1 = 0.8622 euros)

Editing by Veronica Brown and Mark Potter

Hams and slices of ham are seen in a bar in Madrid, Spain, October 3, 2019. REUTERS/Jon Nazca