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01/08/2017

Developments, revolution and doubts in the Ibérico sector

  • In less than two decades, it has gone from being strictly associated with the dehesa to also being an intensive farming product like compound-fed animals
  • It went from being an exclusive product in short supply to an inexpensive loss leader at supermarkets
  • The rapid transformation of the sector has given rise to a range of categories according to feed and racial purity based on percentage
  • Half a dozen certification companies and the interprofessional association ASICI carry out inspection and oversight of production and labeling
  • Nobody controls sales prices in the distribution segment
  • As for the industry, an unidentified person of interest has generated a lot of questions, suggesting fraud, but nobody specific has been reported

Vidal Maté. @trigolimpio_VM

The Ibérico industry, with roughly 14,000 farms, around 700 manufacturers linked to the sector and revenues of more than one billion euros, has historically been one of the Spanish agri-food sector's most emblematic products; it's the most well-known for its quality in all markets and is considered by many to be a part of Spain's national heritage.

The Ibérico sector has historically and traditionally been linked to the dehesa (pastureland that’s traditionally home to oak trees), with more than three million hectares mainly in the southeast of the Iberian Peninsula, in Salamanca, Cáceres, Badajoz, parts of Seville, Córdoba, Granada and part of Castile-La Mancha; it has been an activity associated with small- and medium-sized farms with a small- and medium-sized processing industry. For centuries it was a clearly disorganized sector, with no well-defined regulation where policies relating to production—from breeding and fattening to processing and sales—functioned primarily based on knowledge and trust among farmers and manufacturers.

During the last 15 years, the Ibérico sector has been the subject of more regulatory determinations than ever, with the definition of types of products and the establishment of oversight mechanisms and quality regulations, from animal genetics to food conditions and the management of the production, processing, industrialization and sales processes. These determinations have thrown the sector's structure for a loop. The most important one came in 2001, when Ibérico products no longer had to come exclusively from the dehesa, where production was limited by the existence of grass and acorns, making it possible to produce compound-fed Ibérico ham anywhere in Spain as long as the pigs have 50% of the breed branch. The possibility of obtaining a massive supply of cheap pork produced on farms with an Ibérico label has resulted in it shifting from an expensive, exclusive product to a name used for different quality categories. Furthermore, supermarkets have been using Ibérico products as loss leaders, which has driven prices down throughout the market, pushing prices below cost for all types of Ibérico products, from acorn-fed to compound-fed to pigs. As a result, consumers often don't know if they're buying a product being sold at a loss or they're simply buying a fake product, i.e. the store is selling big name brands which are fake despite having all of the colored labels and seals.

Today, Ibérico products maintain their prestige despite accusations of fraud in the media regarding the animals' breed purity, how they're reared and fattened, and even how they're labeled. These claims, in some cases, come from experts who are theoretically independent and who defend the purity of the sector and, in other cases, by the people responsible for farm policies in the political party Ciudadanos, who have made the issue of fraud in the industry the main focus as part of their agricultural policy, requesting that Isabel García Tejerina, the Minister of Agriculture, appear before the European Parliament to provide explanations.

According to the General Director of the Food and Drink Industry, Fernando Burgaz, "There are senseless accusations against the entire sector. We believe everything is truly on the up and up. If there are irregularities, they should be reported to the corresponding authorities, and you better believe we're interested in putting an end to them. But we can't make it out like the sector is fraudulent, among other things, because it's not."

On paper, and based on current arrangements, with the way the certification entities and inspections organized by the ASICI function, there is a full set of mechanisms to oversee production, industrialization, processing and sales. In practice, although there has been a gradual improvement in implementing these rules, farmers agree that compliance would be better and more widespread if the people responsible for oversight were also controlled by regions where there was interest and sufficient means, and it would be even more ideal if the Ministry of Agriculture was responsible for that oversight.

Organizing and universalizing the Ibérico sector

The current situation did not occur overnight; on the contrary, it's the result of a series of changes that have been going on for nearly two decades.

For better or worse, 2001 was an important year. Miguel Arias Cañete, then Minister of Agriculture, wanted to clarify the sector's activity and he established an initial regulation that was the starting point for one of the biggest changes to impact the sector and affect the Ibérico industry's "identity" as we knew it. The new regulation sought to universalize the product.

Arias Cañete's first regulation sought to organize and clarify the sector, and included a breakdown into three types of products, depending on how the animals were handled and fed: Ibérico acorn-fed pigs fattened up mainly on the dehesa with grass and acorns during the last two months of their lives; recebo pigs, which are animals that also graze on the dehesa but have less access to acorns; the third group, called cebo pigs, opened the door to production anywhere in Spain, and in the world, on intensive farms using compound feed, in conditions similar to those used to raise white pigs, in pigpens with limited space or with patios. Depending on the purity of the breed, in each of the three categories the animals were grouped into two types: 100% pure Ibérico pigs and simply Ibéricos for crossbreeds.

In 2017, Elena Espinosa added the category called "cebo de campo" and, in 2014, Arias Cañete again established a new regulation eliminating the recebo category but maintaining the others, making it mandatory to include breed information on the labels: 100% Ibérico in the case of purebreds, and 50% or 75% in the case of others.

Establishing the "cebo en granja intensiva" category caused the first major revolution in the sector; farmers on the dehesa never truly understood it and they continue to advocate a change today. "Back in the day," they say, "white pig producers were allowed to associate the word 'Serrano' with their products and now they're also using the name 'Ibérico'".

This regulation is the point from which production, with a small supply that is adapted to demand and historically linked to the dehesa, became an activity where large farming groups gained a foothold, such as Vall Companys, Samper, etc.; where industrial groups such as Fuertes-ElPozo started producing cebo products, and other large names in the meat industry, such as Navidul (which is today part of Campofrio group), Argal, Embutidos España, etc. started purchasing this type of product, to be cured and then sold.

Farmers and manufacturers never understood why an animal raised on a farm with wet fodder could be classified as "Ibérico", although the farming administration said it was trying to recognize the industry's true situation, which included the production of Ibérico animals on farms. But that wasn't the case. The Administration was accused of favoring large farming and industrial groups with this change, of putting the first nail in the dehesa's coffin, and of trivializing a quality product under pressure from Catalonia, Murcia, Castile-La Mancha and Castile-Leon, where the main farming and industrial companies were located. But that didn't happen. They didn't "shut down" the dehesa, but the sector doesn't look at all like it did less than 20 years ago.

Ibérico pigs, with cebo pigs in the spotlight, attracted investment from different business groups with no farming connection. Moreover, coinciding with a price crisis among intensively-reared white pigs, many other farmers focused in Ibérico pigs, which had a better image and fetched higher prices, even cebo pigs.

Therefore, in view of a historical slaughter volume of less than a million units between acorn-fed Ibérico pigs and cebo de campo pigs, all of them with ties to the dehesa, Ibérico cebo pig fever led to a count of 4.5 million more pigs between 2004 and 2005, of which over 80% were compound-fed cebo pigs raised on farms. This enormous supply, of more than 8 million hams compared with a total demand of at most 5 million, led general prices to decline, which led to cuts in the size of the herd. The slide in prices led to a reduction in the number of pigs in all segments, until a relative normalization in 2015, when there were 437,069 acorn-fed/dehesa pigs, 533,442 cebo de campo pigs, also with ties to the dehesa, and 1,774,121 cebo de granja pigs, for a total of 2,774,632 animals. According to the ASICI, in recent years there's a new increase in the census, with the result that there are already more than 3.3 million animals in all categories in 2017.

A sector without protection

From a supply standpoint, the Ibérico sector must address rising production, especially in the cebo de granja segment, not only on the Iberian Peninsula but all over the world, since producers can use the designation as long as the pigs are 50% Ibérico, according to the regulation in force. In view of this, the sector has been telling the agricultural administration about the need to request a Protected Geographical Indication (PGI) distinction from the EU so that Ibérico hams can only be produced by farmers on the dehesa, on the Iberian Peninsula. Practically the entire sector agrees on the need to obtain this distinction, with the exception of the DOs Guijuelo, Dehesa de Extremadura, Huelva and Valle de los Pedroches, which is impeding the ASICI's presentation of a request to the government.

The Ministry of Agriculture is aware of the risks of allowing Ibérico hams to be produced all over the world. However, it says the entire sector must make the request, including those DOs, even though their sales account for less than 10% of the entire Ibérico market. And while everyone's busy splitting hairs, the first fresh Ibérico meat produced in the US is now available in the market, provided by the company Acorn Seekers, which was founded by two Spaniards in 2014. Following the initial slaughters in 2016, the first Ibérico hams produced outside Spain can be available in just two years. For this reason, farmers with ties to the dehesa were surprised by recent statements by Minister García Tejerina in Salamanca when she said that, thanks to the government, the sector had recovered and has been protected, and she expressed her disappointment that an important product on the Iberian Peninsula, an ambassador for Marca España, didn't have protection to impede its production elsewhere in the world, like the Japanese do with their Wagyu breed of cattle, from the Kobe area. Today she is committed to obtaining a PGI for Ibérico hams to protect their designation and ensure that they can't be produced in other parts of the world.

Breed control

In terms of breed, farming sources with ties to the dehesa agree that there is no pure Ibérico breed but, rather, a breed branch with different varieties such as Retinta, Torbiscal, Lampiño, Entrepelado, Manchado de Jabugo, etc. which have been crossed with other breeds, mainly Duroc. "There is no 100% Ibérico breed," said one trade professional, "And we can't confirm that such a breed would yield the best ham and provide a product with the value it deserves".

As with other stockbreeding sectors, in the case of Ibérico pigs, the Spanish Association of Ibérico Pig Breeders (AECERIBER) has been overseeing the animals' breed purity and managing the herd-book since the middle of the 1980s. According to data from the association, there are currently a total of 429,870 female Ibérico pigs and 5,876 male pigs following the inclusion of an annex to the book in the last two years, with a visual analysis completed by veterinary experts from the association on another 340,840 animals. According to the Ministry of Agriculture, until the regulation was published in 2014, animals didn't have to be registered in the herd-book (where all of the registered animals were included) for breed purity purposes. As from 2014, that characteristic became a requirement, and breeders with Ibérico animals were given two years to register them initially in that annex as a step towards monitoring their offspring. The head of AECERIBER, Elena Dieguez, does not believe in labeling a crossbreed as "Ibérico." ”Ibérico", she says, "is reserved for purebred animals; therefore, a different name must be designated for crossbreeds.” The inclusion of female pigs in the book's annex is allowed under the regulation in force stipulated by the Ministry of Agriculture. However, different parts of the sector and people in the Ciudadanos party insist that the ideal scenario would involve a DNA analysis, which would be a lengthy process. They say that the registration of those thousands of animals in the annex doesn't imply they're allowing all pigs to be labeled as "Ibérico" but, rather, it's the result of a rigorous process put in place by industry experts and in which thousands of animals have also been excluded. According to Burgaz, the process is part of a regulation which was subjected to consultation processes and was given the green light by state lawyers, the Council of State and EU institutions, so it cannot be considered illegal.

Dehesa and slaughterhouse oversight

There are half a dozen certification entities responsible for monitoring production, rearing, fattening and labeling including Enac and other privately-owned entities recognized by the regions, funded by payments from farmers and companies in the sector.

As regards food for Ibérico pigs on the dehesa, certification bodies monitor the acorns available in each harvest and decide whether or not there are enough acorns and grass for each animal which, according to the regulation, is around nine kilos per day. It's understood that the certification entities arrive at the dehesa and don't really look around, they simply classify the animal based on its diet. The certifying authority receives around two or three euros per animal for monitoring them during the entire process. However, ANPROGAPOR, the national association of white pig producers, which includes a large number of cebo Ibérico pig breeders, does not believe there is rigorous oversight, giving as an example the recent campaign, in which there was an increase in the number of "Ibérico" pigs slaughtered despite scant acorn production. Farmers with the closest ties to the dehesa say there is more than enough pastureland to provide grass and acorns to a herd larger than the current one and that the increase in slaughters this year is due mainly to a slight improvement in prices following years of decline.

Doubts about the lack of sufficient oversight in the Ibérico sector are also focused on the slaughter, weights and labeling completed at Ibérico slaughterhouses in most parts of the dehesa, and specifically in Guijuelo, Salamanca, where thousands of cebo pigs from all over Spain are taken to be sacrificed. Of the more than 3.3 million animals slaughtered, less than 5% were deemed as unsuitable, due to their weight, according to 2016 data.

The Ministry of Agriculture designated the ASICI as being responsible for monitoring the slaughter and labeling processes; that organization is financed by companies and farmers at 0.50 euros per animal, paid equally by farmers and manufacturers.

The interprofessional organizations are responsible for disseminating information, market analyses and, in particular, promotional activities. ASICI, however, is an exception, and in addition to completing market analyses and providing information on censuses, business, etc. it's also responsible for making sure that the rules are being followed during rearing, fattening, slaughter and labeling, which it does by inspecting farms and slaughterhouses. "Most certainly there are loopholes in the inspection system in terms of rearing, feeding and monitoring animals throughout the entire process," said the chairman of meat industry association IBERAICE and of the interprofessional organization, Francisco Javier Morato, "but the truth is that the situation has improved notably and I believe there are things that are being done well, although there's a slight lack of resources."

ASICI has a dozen specialists who complete around 100 visits to farms and manufacturers each week. In his opinion, there is sufficient oversight in terms of the amount of acorns on the dehesas to feed the current herd, as confirmed by the fact that many areas are disqualified each season as they don't comply with the minimum food and management requirements.

Burgaz believes that it's tremendously irresponsible to describe the entire Ibérico sector as fraudulent, whether the criticism is coming from politicians or "independent" experts. "If it really was fraudulent, as the media says it is, they should report it to the corresponding authorities. We're more interested than anyone else in combating fraud," he says. And that's precisely what the Ministry said, in front of the Spanish Civil Guard's Nature Protection Service unit, to one of the Ibérico experts responsible for the bulk of the complaints reported in the news.

From an exclusive product to a loss leader at supermarkets

In addition to problems due to the sector's current regulations and issues with oversight, the Ibérico industry has an obvious threat which affects the product's sales processes in view of the strategy adopted by large distribution groups of shifting its image from an exclusive, expensive product to a cheap one as part of some manufacturers' strategy of lowering prices.

There's also a lack of information among consumers, despite the colored label and packaging scheme implemented by the administration to distinguish between different types of products. This way consumers know that if the seal is black, the ham is theoretically from 100% pure-bred Ibérico pigs, and it can also be considered "pata negra;" if it's red, the pig was free-range but not purebred, though it was reared on the dehesa and ate acorns. If the label is green, it's a cebo de campo ham, which comes from pigs that are pastured and fed a combination of grass, acorns and grain. If the label is white, the ham is from pigs that are fed only grain for 10 months.

However, it's not entirely certain that the packaging is correct. Farmers and manufacturers with ties to the dehesa agree that it's impossible to sell hams that are from allegedly acorn-fed pigs for 180 euros when, if the animal has complied with all requirements, it has an average cost of 400 euros. Therefore, it's understood that acorn-fed Ibérico hams sold at lower prices aren't from animals raised in those conditions, although they have the right labels distinguishing their quality or they're being sold at a loss, a policy not punished enough by the competition authorities and regional governments.

Generally speaking, compared to the system 15 years ago, the industry has improved in terms of organization, oversight and transparency; however, as it's an expensive product, it's exposed to players looking to make a quick buck by whatever means possible.

If there were any cases of fraud, the sector would report it openly, not via allegedly anonymous campaigns; the sector can't be used as the agricultural cause of a political party, as doing so would jeopardize the image of a product which is generally produced in accordance with the law.

Ibérico pig classifications

The current regulation contains three designations:

-Acorn-fed: animals that have spent more than 60 days, between October 1st and March 31st, eating an average of eight to nine kilos of grass and acorns every day. The minimum pasture weight must exceed 92 kilos with a minimum of 46 kilos. The minimum slaughtering age is 14 months old with a carcass weight of 108 kilos for 100% Ibérico pigs and 108 for other pigs.

-Cebo de campo: animals fattened with grass and acorns on the dehesa, as well as compound feed and legumes on extensive farms, where they stay for 60 days, with a minimum age of 12 months and a carcass weight of 115 kilos, and 108 if they're 100% Ibérico.

-Cebo: animals raised on farms in a minimum area of at least 2 meters per pig, with a minimum slaughter age of 10 months and a carcass weight of 115 kilos.

Quality labels:

-Black seal: for 100% acorn-fed Ibérico pigs.

-Red seal: for acorn-fed Ibérico pigs.

-Green seal: for pigs fed compound feed, grass and legumes.

-White seal: for pigs fed compound feed on an intensive farm.

The term "pata negra" can only be used with 100% acorn-fed Ibérico pigs. "Bellota" and "montanera" may only be used with acorn-fed animals.

Breed designation

Label information:

-“100 Ibérico”, if the animal is 100% Ibérico.

-“Ibérico”, if the animal is at least 50% Ibérico breed.

As for those products that don't indicate “100% Ibérico”, it's better to check the breed percentage on the label.

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