From bratwurst to jamon: the crown of the EU pig sector moves to Spain

MADRID / HAMBURG, October 6 (Reuters) – As a child in Avila province, Albert Pascual’s father bought 100 pigs, but the business he now runs has more than 9,000 – as part of a major expansion that has put Spain on the right track. as the leading pork producer in the European Union this year.

“My father used to sell pigs at a time, in the 90s, when this sector hardly existed. Now we (Spain) are a world power, we have grown a lot and our business has developed alongside the development and growth of this sector, ”said Pascual.

Germany has long been at the top of the ranking of EU pork producers, but an African swine fever (ASF) outbreak in September 2020 in wild boars caused it to lose access to the lucrative Chinese market.

This accelerated a shift in EU production to an ASF-free Spain that was already underway, aided by its less onerous regulations in areas such as planning and manure use.

China is by far the largest export market for EU pork products, accounting for around 56% of sales so far in 2021, according to data from the European Commission.

The country’s appetite for imported pork has skyrocketed following its own ASF outbreak that ravaged its vast herd of pigs, the largest in the world.

“The fact that in recent years (China) has been affected by African swine fever has caused demand to skyrocket,” said Ramon Soler Ciurana, export manager of Faccsa-Prolongo, a pork producer in Malaga in the southern Spain which is booming. its pork packaging and freezing facilities.

EU pork product shipments to China totaled 3.34 million tonnes last year, up more than 60% from 2.31 million in 2019 and almost triple the 1.28 million from 2018.

Exports have remained high this year and totaled 1.86 million from January to July, down just 0.1% from a strong 2020, according to EU data.

“It is taken for granted in the industry that China, no matter how hard it works or tries to find alternatives, will not be able to return to normalcy within four years,” Soler said.

GERMAN DISEASES

However, Germany’s export problems have only accelerated a trend that has been developing for years.

Spanish pigmeat production totaled 2.60 million tonnes in the first six months of 2021, up 4.1% from the same period last year, according to data from the European Commission, and is expected to register an eighth consecutive annual increase.

In contrast, pork production in Germany fell 1.3% to 2.52 million tonnes and is heading for a fifth consecutive annual decline.

German consultancy firm AMI says there were 24.6 million pigs on German farms in May 2021, down 3.5% from 25.5 million in May 2020, continuing a downward trend compared to 28.1 million in 2014.

The impact of ASF has been particularly severe in East Germany near the border with Poland where the disease has been found in wild boars and more recently in domestic pigs. Measures such as a ban on raising piglets have been imposed and some slaughterhouses have been reluctant to buy pigs from the region.

DIFFICULT RULES

Animal welfare and stricter environmental rules in Germany have contributed to the decline in pig farming as well as lower domestic demand for meat, partly linked to a more health-conscious diet with avoidance of red meat and the transition of young people to vegetarianism.

Germany has strict planning rules which have made it difficult for the industry to adapt to animal welfare legislation related to issues such as the use of sow stalls.

“Even though German breeders want to invest in new pigsties, they often cannot get planning approval from local authorities,” said Andre Vielstaedte, spokesperson for Toennies, the largest slaughterhouse and packing group meat from Germany.

In part of Germany, restrictions were also placed on the use of manure, linked to concerns about the high concentration of ammonia in the air.

Spanish pig farmers, on the other hand, are benefiting from a strong demand for slurry, a natural fertilizer made from manure and water, as soils in much of the country have become depleted and lack organic matter.

INVESTMENT IN SPAIN

Toennies is one of those investing in Spain.

The company, based in Rheda-Wiedenbrück in western Germany, is building a meat packing and slaughtering plant in Calamocha, Spain, at a cost of around 75 million euros ($ 87 million ).

Operations will start in 2023 and the plant will slaughter 2.4 million animals per year, with up to 1,000 jobs created.

“The pork market in Spain looks attractive and the policy framework is positive,” said Vielstaedte de Toennies.

“Our new Spanish plant will be exclusively for exports to markets such as pork ribs to North America, bellies to Japan and other products such as pig’s feet and ears to China and elsewhere. in Asia.”

Vielstaedte said Germany remained the company’s “main market”, but ASF was just one factor that made it less attractive for pig farming and international pork marketing.

“We have a one-sided regulatory burden … because animal welfare and environmental protection create additional costs and require new investments, but which farmers in other countries often do not face,” he said. -he declares.

CHALLENGES AHEAD

China continued to report outbreaks of ASF this year, notably in three of the top five pork-producing regions, Henan, Sichuan and Shandong, with imports expected to remain high in 2022.

The Foreign Agricultural Service of the US Department of Agriculture predicted earlier this year that China’s pork production will drop 14% in 2022, reflecting a smaller hog herd and low profits for domestic producers.

He predicted that imports would total 5.1 million tonnes in 2022, slightly below the 2020 record of 5.28 million.

Before its own ASF outbreak, however, China only imported 1.5 to 2.0 million tonnes of pork per year, and industry sources expect imports to eventually slow down as his herd is reconstituting itself.

“This is one of the big challenges we face,” Soler said.

“Obviously, the Chinese market will return to normal sooner or later and we will return to pre-crisis figures. The objective of maintaining the level of production will depend on our ability to open up new markets.”

($ 1 = € 0.8622)

Editing by Veronica Brown and Mark Potter

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