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Spanish pig sector growth is based on exports

PW ReportersBy PW ReportersSeptember 29, 20152 Mins Read
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Spanish pig production is continuing to expand with most of the country’s latest growth in output being destined for sale in exports markets, according to AHDB Pork.

“At 2.4 million head in June 2015, Spain has over 170,000 more sows now than two years ago,” said AHDB Pork, noting that the Spanish herd is now just 4% smaller than the German herd, which is the EU’s largest.

Spain’s pig sector growth has been based on having pigmeat prices which were well above the EU average for most of 2013 and the first half of 2014, alongside lower production costs than in most other European countries.

“In 2013, the latest year for which figures are available, Spanish production costs were the lowest among the major EU producers, averaging €1.64 per kg (£1.21/kg),” said AHDB Pork, quoting figures produced by InterPIG.

“Although this is partly because of lower building and labour costs, the vertically integrated nature of much of Spanish production also helps to control costs. The relatively high prices and low costs mean that Spanish producers have been profitable more often than their counterparts in many other EU countries, encouraging them to expand.”

Despite the fact that demand for pigmeat from Spanish consumers has been falling, albeit alongside meat sales in general, the industry has successfully kept exports moving in the right direction.

“Spanish pork exports have risen for more than a decade,” said AHDB Pork. “Having been under 400,000 tonnes in 2002, they have more than doubled since then, topping 1 million tonnes last year. This was 7% (or 68,000 tonnes) higher than in 2013, and a new record.”

The successful growth and diversification of the Spanish export trade has continued, perhaps even accelerated, this year. Exports were up 16% on the year for January to July 2015, overtaking Denmark as the world’s third largest pork exporter. Nearly a third was destined for non-EU markets.

“The Spanish industry’s ability to grow its exports goes a long way to explain how it has been able to keep prices at or above the EU average despite production growth,” said AHDB Pork. “With the latest results suggesting output will increase further, however, it will be crucial that Spain can maintain its export success.”

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