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AHDB Pork Country Reports


10 December 2012

BPEX / AHDB Country Report - SpainBPEX / AHDB Country Report - Spain


BPEX / AHDB Country Reports
AHDB

SPAIN is the second largest producer of pig meat in Europe and has the largest breeding herd. This means that, despite high levels of per capita pig meat consumption, it is a major exporter of pig meat with a growing presence in some key markets. As one of the few Member States whose pig meat production is higher this year than last, demand for Spanish exports is growing rapidly, making it an increasingly important player in the global market. Although it still only supplies a relatively small share of UK imports, its shipments are increasing rapidly.

Pig Numbers

According to figures from the latest pig census, the Spanish pig herd declined by nearly two per cent in the year to June 2012 to 25.2 million head, the second largest in Europe. This marks a return to the recent downward trend following a rise in the herd in the previous twelve months. The number of pigs weighing over 80kg was sharply lower but younger pig numbers were higher than a year earlier. This suggests some volatility in pig meat production can be expected over the coming months.

The Spanish breeding herd remains the largest in the EU, despite a decline of three per cent in sow numbers over the year to June 2012. In-pig sows and gilts declined at a similar rate but there was a sharper fall in the number of maiden gilts, suggesting that numbers may continue to drop in the coming months. This may be partly the result of some producers leaving the industry or switching to finishing rather than converting to group housing.

Despite some further improvement in sow productivity, the lower sow herd meant that the number of piglets was nearly two per cent lower than a year earlier.

Spanish Pig Numbers, June

Source: MARM

Production

In contrast to much of the rest of Europe, Spanish pig meat production during the early months of 2012 has been significantly higher than in the same period of 2011. For the first half of 2012, slaughterings were up by four per cent year on year at 21.4 million head. March and June were the only months when throughputs were lower than a year earlier. With carcase weights also slightly higher, pig meat production was five per cent higher than in the first six months of 2011 at 1.80 million tonnes. This reinforces Spain’s position as the second highest producer of pig meat in the EU, after Germany.

Spanish Pig Slaughterings

Source: Eurostat

Trade

Spain has been a major exporter of pig meat in recent years and higher production so far in 2012 has led to increased supplies available for export. As a result, Spanish pork exports in the first six months of 2012 were nearly a quarter higher than a year earlier. Imports remained at a low level and were down nine per cent compared with January-June 2011.

January-June

Source: Agencia Tributaria, GTIS

Almost all of Spain’s major export markets took much higher quantities of fresh and frozen pork in the first half of 2012 than a year earlier. The slowest growth was in shipments to Spain’s neighbours Portugal and France but even these were higher. Overall, exports to other EU Member States were up by 21 per cent, with Italy, Germany, the UK and the Czech Republic seeing the largest volume growth. Unit prices for shipments within the EU were only two per cent higher than a year earlier.

However, the most rapid growth was in shipments to non-EU markets, which were up by 27 per cent. This could largely be attributed to rapid growth of shipments to Russia and China. This was accompanied by a sharp increase in unit values which meant that the value of extra-EU shipments was almost 50 per cent above their level in the first half of 2011. Exports of other types of pig meat also increased, although volumes were much smaller. Pig offal shipments rose by over a quarter to 85,000 tonnes. Again, China and Russia were major growth markets.

With such a large breeding pig herd, Spain has always exported significant numbers of live pigs, with the total in January-June 2012 just under 700,000 head. Around 90 per cent of these were slaughter pigs with over three quarters of these destined for abattoirs in Portugal. However, this trade was 24 per cent lower in the first six months of 2012 than a year earlier, contributing to the increased Spanish production. The fall was partly offset by increased shipments to Italy, France and Germany. Weaner exports were 13 per cent higher than a year earlier but still only numbered 71,000 head.

Prices

Spanish pig prices normally follow a seasonal pattern, peaking in the summer when demand is at its height because of the tourist trade but then declining during the autumn to reach a low point in the winter. Since last summer, the seasonality of prices has been much less apparent, with prices easing only gradually during the second half of 2011 and then rising more rapidly in the early spring before stabilising at a similar level to last summer. They then rose further during May and June as the tourist season approached, to hit a level of just under €180 per 100kg. This was among the highest prices in the EU, despite the increased production and can be attributed to steady domestic demand and strong export performance. During August, prices began to rise again, against the usual trend, as supplies tightened, both in Spain and elsewhere in Europe.

Spanish Pig Reference Prices

Source: EU Commission

Weaner prices in Spain have also been at a high level, having remained above €40 per head throughout the first half of the year, except for a short spell in January. Prices often reach this level for a period during the spring but have stayed higher for longer this year. At its peak in late March, the price was above €48 per head, its highest level for six years. However, rising feed prices and seasonal factors meant that the price fell below €40 at the start of August and was as low as €35 per head by the end of the month.

Outlook

Spanish pig slaughterings so far in 2012 have been significantly higher than in 2011. However, the latest census results suggest that there will be fewer pigs available in the remainder of the year so some easing back of throughputs is likely. Nevertheless, slaughterings for the year as a whole are likely to remain above last year’s level. There are already some reports of lower carcase weights as a result of higher feed prices and poor growing conditions due to hot weather. This is likely to continue during the remainder of the year, resulting in slightly lower growth in pig meat production.

So far this year, the additional quantities of pig meat produced in Spain have all been exported, with domestic demand steady. Reduced production elsewhere in the EU has created opportunities for Spanish exporters, both within the EU and outside it. With supplies likely to be tighter during the remainder of the year, additional export demand is likely to result in somewhat less pig meat available for consumption on the domestic market.

Census results suggest that some further decline in pig numbers can be expected during the coming months. This is likely to be exacerbated by a combination of high feed prices and the impact of the new welfare regulations, including the partial ban on sow stalls. As a result, Spanish pig slaughterings during 2013 are likely to be somewhat lower than in 2012, although the impact may be smaller than in some other Member States given the relatively integrated structure of the Spanish industry. Lower supplies will constrain exports but a further decline in domestic consumption is likely, especially given that Spanish consumers are likely to be price sensitive in the current economic climate.

Spanish Pig Meat Production and Consumption Forecasts

December 2012

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