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27/11/2018

Innovation and internationalization of lamb and goat meat

Ricardo Migueláñez. @rmiguelanez

Little by little, mutton production in Spain has been increasing its value at origin, although it's still a far cry from 2007 levels. The ongoing decline in domestic consumption seems to have stopped as exports, of both live animals and fresh meat, continue to pick up.

In the past year, and according to the Ministry of Agriculture's macromagnitudes, the current value of sheep and goat meat production at basic prices at source were 1,234.3 million euros, i.e. 3.2% more than in 2016 but 15.4% below 2007 levels. This is equivalent to 62.3% of the sector's total production value, 6% of the total value of the Final Livestock Production and 2.5% of the Final Agricultural Production.

Sheep farms and census

There were 90,764 sheep farms for meat production as of January 1st, 2018, accounting for 79% of all farms, although there were another 10,067 that were mixed (meat and milk). Since 2007, the number of sheep farms has declined by 4.75% and around 4,500.Around 19.7% of all sheep farms (meat, milk and others) were in Galicia (22,607), followed by Andalusia (18% and 20,664); Extremadura (14.5% and 16,642); Castile-León (9.6% and 10,966) Castile-La Mancha (5.7% and 6,590); Asturias (5.65% and 6,435), the Basque Country (5.6% and 6,472), etc.

The sheep meat consensus was created at the beginning of the year, and the total was 16.77 million heads of sheep. Around 22.1% of the total and 3.7 million were in Extremadura; 18.3% and close to 3.1 million in Castile-León; 15.9% and almost 2.66 million in Castile-La Mancha, 14.4% and 2.41 million in Andalusia; 10.4% and 1.74 million in Aragón, etc.

In terms of reproductive health, in 2017, 57% (close to 9.1 million) were sheep and lamb that were meat producing; 15% (almost 2.43 million) were sheep and lamb tupped for milk production; another 4% (691,812) were sheep were untupped, and another 25% were lambs and sires (almost 3.76 million animals).

The sheep census in the European Union was 85.4 million at the end of 2017. A total of 27% (23.3 million) were in the UK, while Spain ranked second with 19% (15.96 million).Spain was trailed by Romania (12% and 9.98 million); Greece (10% and 8.59 million); Italy (8% and almost 7.22 million), France (8% and almost 7.22 million), etc.

Goat farms and census

As of 1 January 2018 (SITRÁN), there were 56,013 goat farms for meat production, accounting for 72.5% of the total (77,299), down 1.54% year-on-year but up 19.6% compared with January 2007 (49,342). There were another 10,010 mixed (meat/milk) farms. Of the total, 29% (22,606) were in Galicia; 22% (16,878) were in Andalusia; 10% (8,060) were in Extremadura; 5% (4,094) were in Aragón; another 5% (3,619) were in Castile-La Mancha, etc.

Since 2008, the total number of goat farms has expanded by 7.8% and more than 5,600 farms. The lowest number during this period was in 2012: 65,981. Since then the sector has rebounded, peaking at 78,756 farms at the beginning of 2016.

Goat farmers had 2,929,223 heads in 2017, of which 37.8% (slightly more than 1.1 million) were in Andalusia; another 15.3% (447,185) were in Castile-La Mancha; 10.5% (308,494) were in Extremadura; 9% (263,252) were in Murcia region; 7.4% (216,026) were in the Canary Islands; 5.3% (155,441) were in Castile-León, etc.

The number of heads of goat declined slightly in 2017 (November census), by 0.92%, to 3,059,731, after peaking at 3,088,035 heads. Around 2.43 million were female and 624,953 were kids and sires.

According to the goat census in the EU in 2017, there were 12.24 million heads, de of which 30.8% (3.77 million) were in Greece, followed by Spain, with 25% of the total. Romania came in third, with 12.3% (1.5 million); France had 9.9% (1.21 million); Italy had 8.1% (992,000 heads), etc.

Sheep meat production

During the last year, sheep production in Spain amounted to 115,114 tons of carcass meat, down 1.66% year-on-year (117,054 mt). After 2005, when production reached 224,126 mt of carcass meat, it declined to an all-time low of 112,464 mt in 2012; since that time it has rebounded. It peaked in 2002, with 237,000 tons of meat produced.

Almost 25% of sheep production was in Castile-León, with 28,738 tons of carcass meat; followed by Castile-La Mancha (14.3% and 16,446 mt); Murcia region (10.2% and 11,725 mt), Aragón (9.5% and 10,968 mt); Valencia region (7.87% and 9,059 mt); Andalusia (6.4% and 7,344 mt), etc.

Goat meat production

In 2017, goat meat production amounted to 10,713 tons of carcass meat, up 8.2% year-on-year (9,904 mt), from 1.36 million animals. After 2005, production peaked in 2011 with 11,142 tons; the all-time low came in 2014, with 8,553 tons. Production peaked in 1986: 17,734 mt and slightly more than 2 million heads.

One-third of all production came from Andalusia, with 3,535 mt, followed by the Canary Islands, with almost 18% (1,895 mt); Murcia region (12.65% and 1,355 mt); Castile-La Mancha (12% and 1,289 mt); Castile-León (8,53% and 914,000 mt), etc.

In 2017, sheep and goat production totaled 754,500 tons of carcass meat, up 1.1% year-on-year. Spain accounted for 16.7% of the total: 125,700 tons (115,000 mt of sheep and 10,700 mt of goat).

The leading producer of mutton in 2017 was the UK, with 297,770 mt (39,5%) in carcass meat, up 2.63%. Spain ranked second (16.8% and 125,500 mt), followed by France (11.7% and 86,930 mt), Greece (9.6% and 71,320 mt); Ireland (9% and 67,120 mt); Italy (4.6% and 25,030 mt), etc.

Foreign trade

Spain is a net exporter of sheep and goat meat, whose performance has improved in recent years, especially in terms of exports to non-EU countries. This has been the obvious strategy in view of the continuous decline in domestic consumption, which seems to have stopped in recent years following the campaigns undertaken by Interovic and the promotion of new cuts and formats that are better adapted to today's demand and consumer preferences.

In the last year, total exports of sheep and goat meat, which includes live animals and fresh, chilled and frozen meat, totaled 87,355 mt (-1.4% compared with 2016), worth 290.54 million euros (-4.1%), of which 50,485 mt (worth 140.26 million) went to non-EU countries and 36,870 mt (worth 150.3 million) went to EU countries.

France accounted for one-third of all Spanish sheep exports in 2017, with 11,585 tons out of a total of 34,790 mt, followed by Italy (12.8% and 4,452 mt), Algeria (5.3% and 1,847 mt); the UK (5.2% and 1,825 mt); the Netherlands (4.9% and 1,717 mt), Denmark (4% and 1,402 mt), Hong Kong (3.7% and 1,294 mt); Portugal (3.5% and 1,210 mt), the UAE (3% and 1,036 mt), etc.

In contrast, imports by Spain amounted to 12,792 mt (-8.43% compared with 2016), valued at 64.3 million euros (-6.9%), of which the bulk, 11,491 mt (worth 56.43 million) came from other EU countries and 1,301 mt (worth 7.86 million) came from non-EU countries.

In 2017, sheep meat imports totaled 8,180 tons, of which 30% came from Italy (2,455 mt), followed by Greece (16.2% and 1,326 mt), France (13.9% and 1,140 mt), New Zealand (9.5% and almost 777 mt); the Netherlands (7.8% and 637 mt), the UK (6.1% and 497.5 mt), etc.

In contrast, of the 2,385.2 tons of goat meat exported in 2017, almost 37% (880.3 mt) went to France, followed by the UK (16.8% and 400.8 mt); Portugal (10.1% and 241.2 mt); Italy (9.7% and 232 mt), the Netherlands (8.3% and 199 mt), the Central African Republic (4.5% and 107 mt), etc.

Lastly, of the barely 218.3 tons of goat meat imported in 2017, 38.2% (83.4 mt) came from France; around 30% (64.9 mt) came from Greece; almost 15% (32.7 mt) came from Germany; and 10.2% (22.3 mt) came from the Netherlands, etc.

Meat consumption

Indubitably, domestic consumption of fresh sheep and goat meat is still the primary problem the sector faces. This segment has performed quite poorly in recent years. In 2007, Spanish households consumed 199,900 tons of this meat. Ten years later, consumption has tumbled to 68,116 mt according to the Ministry of Agriculture's consumption panel. That's a 43.2% decline that's part of a downward trend with no end in sight. In 2007, per capita consumption was 2.67 kilos; last year it was 1.46 kilos.

Efforts by Interovic have focused precisely on boosting consumption while still monitoring internationalization (e.g. entering China) through promotional campaigns that revolve around new and imaginative product presentations, better adapted to demand and consumers, and efforts by the retailer chain (butchers' shops, markets, etc.).

According to sheep and goat meat supply in Spain, (provisional) production data suggests 125,511 tons were produced in 2017, while imports (meat and offal) totaled 8,625 mt and domestic consumption amounted to 93,731 tons. In terms of self-supply, levels reached 135.35%, i.e. the supply (production + imports - exports) was 35.4% higher than what we're capable of consuming, at barely 1.99 kilos per person (provisional data)—a long ways away from 5.71 kilos per person back in 2003.

However, that decline has been slowed in recent years. In 2014, it was 1.97 euros per kilo, higher than 2 kilos per capital the following two years. Other statistical sources, however, reduce consumption per person per year down to 2 kilos since 2012, for barely 1.46 kilos per person in 2017, an all-time low.

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27/11/2018