Pork sector, golden years of exportation and current situation. - PGSaludables

Pork sector, golden years of exportation and current situation.

The Spanish pork sector has had three golden years, with 15 billions in revenue: 5 comes from exports. In this sphere, it is behind only the US and Germany in total terms. It represents a rising trend and, in just the first seven months of 2020, Spain exported 3,477,237 tonnes (according to Eurostat).

The most relevant news in the pork sector brings us back to 2018. Specifically, in China, which was going through its worst pork meat production crisis. Luckily or unluckily, when this type of thing happens there is always someone who can see an opportunity. It has happened to us in Spain: it brought us face-to-face with “the golden opportunity”.

Between 2019 and 2020, international sales rose by 25%

Exportation in Spain went from a decrease of 2.25% to an increase of nearly 30% in 2019 and 21% in 2020 (official data from the Ministry of Agriculture, Fishing and Food). In those two years, this industry’s total sales outside the European Union grew substantially, by 61% in 2020 alone.

Pork meat shipments to China grew by more than 300,000 tonnes in 2019 and 700,000 in 2020. To sum up: an increase of over 100% in the pork sector: golden years!

Recovery of the market in China

And since nothing lasts forever, China recovered from its crisis. We’re referring to the pork epidemic it had suffered in these two years. Furthermore, the country recovered rapidly and with a target of growth: to produce 95% of the pork it would consume ten years from now, surpassing the results of 2020. Consequently, the Food and Agriculture Organisation of the United Nations (FAO) lowered its predictions (-2.2%) on China’s import demand throughout 2021

2021 Fall in pork sector exports

By 2021, the “golden years” were over. China’s recovery is impossible to ignore as it has generated a new scenario of uncertainty for Spain, which shows a fall during more than the first semester of 2021, according to the latest report from the Ministry of Industry, Commerce and Tourism. In addition, Agriculture demonstrates a drop in August of 6% in exports of these products to third countries.

This year, the sector plans to focus, once again, on South Korea, Japan or the Philippines, where 2020 sales fell, respectively, by 28%, 19% and 11%. We should also concentrate on recovering a portion of the intra-EU exports which have also diminished this year

Bumps in the process of pork sector exportation

In its expansion process, the pork sector runs into four problems.

  • Blockade situations like the one with Russia: the country’s veto on food products from the European Union was extended for another year.
  • China, in the last few months, has revoked the export permits of multiple Spanish slaughterhouses, arguing a move toward stricter purchasing control.
  • Tariffs are also a problem. This affects the Latin American market. We refer to the tax on pork product imports from Europe. Those from the US are much more competitive.
  • And finally, another bump in the road is the high prices and freight congestion in flows from Spain to China.

The pork sector and its importance in the Spanish economy

The pork sector is crucial to our country. It represents about 14% of the Final Agricultural Output and 40% of the Final Livestock Output (according to Agriculture).

It is also important to keep in mind that 45% of meat companies in Spain are in rural municipalities with under 5,000 inhabitants (according to Anice). This sector generates wealth as it grows and thereby prevents depopulation.

On a worldwide level, Spain is the fourth largest pork meat producer, behind China, the US and Germany.

Let’s prepare for 2022

Get ready for this year and take the chance to improve your facilities. Automate processes. Leave everything to us.

The trend is to have an efficient farm. This means working to reduce nitrogen and greenhouse gas emissions by adapting your facilities, feed recipes and manure handling. In essence, being more sustainable.

All this contributes to respecting the environment and, of course, animal welfare. This is how we help fulfil the European Green Deal strategy.

Contact us and request your no-obligation viability study

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