Ricardo Migueláñez. Agricultural Engineer.
Last year, pork production in Spain exceeded the existing record of 3.5 million tons, reflecting growth which, though slightly lower than 2010 and 2011 figures, confirmed the upward trend in this segment following the slump in 2009.
Beef production (597,000 tons) was similar to 2011 volumes, down just 1% year-on-year, while production of lamb and kid slipped again, in line with several years ago, ending the meek recovery visible in the last two years.
I would highlight that, with highly developed meat-livestock producing sectors, and as a global leader in pork, Spain is clearly a surplus producer; accordingly, exports are not only necessary, but they also represent an opportunity for sector development.
Domestic consumption is essentially stagnant, and Spain has been an acutely mature market for several years. Last year, household consumption of meat advanced just 0.8% in volume and fell by 1.2% in value, and the trend continues. According to recent data from the Spanish Ministry of Agriculture, Food and the Environment Consumption Panel for the 12 months to July, domestic consumption of meat remained practically stable (+0.2% in volume), while spending declined (by -0.6%).
Spain, the world's fourth-largest pork producer
Pork accounts for 82.5% of ungulate meat production in 2012 (61.6% of all meat, including poultry farming and rabbit breeding). With this volume, Spain has strengthened its position in recent years as the world's fourth-largest pork producer, after China (which produces 49% of the world's pork), the US (10%) and Germany, and ahead of France, Poland, Denmark, the Netherlands and Belgium.
For years now, the sector has focused on exports, which have intensified in recent times. The results are spectacular: 30% of all Spanish meat production is exported, though just 8% of that figure is processed meats.
The numbers speak for themselves. Last year, Spain's meat sector exported 1.46 million tons of fresh products and 123,000 tons of processed meats, providing sales of 4.157 billion euros, reflecting growth of 14% with respect to 2011 (3.644 billion euros) and 17.1% with respect to 2010 (3.112 billion euros).
Exports of meat and offal yielded sales of 3.278 billion euros, of which 2.333 billion euros come from pork (almost 60% of total sector exports) and 485 million euros from beef. Processed meat exports yielded 880 million euros, led by white and Ibérico cured hams (238 million euros) and cured cold cuts (300 million euros).
As a result, the sector's trade balance is very positive: coverage in 2010 was 229%, increasing to 283% in 2011 and to 345% in 2012—figures that very few of the main economic sectors can achieve, and helping to ease Spain's traditional trade deficit.
The European Union: our main customer
The European Union remains the primary destination, accounting for almost 80% of export value. France is the leading customer for Spanish meat and meat products, accounting for one-fourth of sector sales, followed by Italy, Portugal and Germany. Spain also exports to non-EU countries, to an increasing number of mature and developing markets. In first place is Russia (although Spanish exports have been blocked at the moment, the problem is being resolved), followed by the US, Korea, China, Hong Kong, Japan, Mexico and Brazil.
According to the industry, exports vary according to product and destination. From 2008 to 2011, sales of pork to the EU expanded by 8% and to non-EU countries by 56%, whereas sales of processed products to the EU increased by 17% and declined by almost the same amount to non-EU countries. This is the sector's Achilles heel: those markets are extremely important for Spanish companies and they must boost exports, but they still face many obstacles.
According to the National Meat Processing Industries Association of Spain (ANICE): "If we want our sectors to remain competitive, to grow and to function, we must be effective in opening up markets and exporting. Meat is doing well, but there is room for improvement in processed meats." It is much more advantageous to export products with greater added value. They provide a boost to the entire meat supply chain.
Efficacy in Spain
The sector recognizes a pressing need for Spain to be more effective and efficient, and to develop a functional model for public administration and management. It's important to note that, in global markets, Spain competes not only with other countries' meat industries, but it also encounters other governments with official management models that are different from Spain's. To compete as a country, the model must be as agile and efficient as those of our greatest rivals, and even more so.
To ensure exports and participate successfully in a complex and very competitive global market, the industry asks for improvements in key areas such as resource allocation by the government to enhance foreign trade, the unification of administrative powers with functional and economic effectiveness, simplification of export procedures, reinforcement of the Framework List of exporters and the elimination of trade obstacles.
As tariff barriers to international trade are eliminated through WTO agreements, the barriers being imposed by countries for export protection are mainly health related. To that end, the strictest controls must be applied to animal health and production of meat and meat derivatives, especially in very important countries and markets with requirements that are different from those in the EU.
The meat industry, a lesser-known giant
The meat industry is Spain's fourth-largest industrial sector, behind autos, oil and gas and electric power. It comprises slightly more than 3,000 SMEs throughout Spain. It is the largest segment within the food and beverage industry, with sales of 21.164 billion euros, accounting for more than 20% of Spain's food sector total.
This accounts for 2% of Spain's total GDP (at market prices) and 14% of industrial GDP, and the industry provides 83,310 jobs, accounting for more than 23% of total food sector employment in Spain.