Future News

PORK SECTOR X-RAY. WHERE ARE WE AT?

The successful figures that the Spanish pork sector has recorded are the result of a business model, a benchmark worldwide.

The pork sector has become one of the key sectors for the economy of Spain. Photo: Rotecna.

In recent years, pigs have become one of the key sectors for the economy of our country, positioning itself as the most relevant sector for Spanish livestock with more than 40% of the Final Livestock Production and around 16% of the Final Agricultural Production, only surpassed by fruits and vegetables. Its activity accounts for 1.4% of the national GDP and 14% of the Gross Industrial Domestic Product. To see what have been the factors that have contributed to achieving these figures, we have spoken with different professionals in our sector to offer a wider perspective of where we are and where we are going.

The successful figures that the pork sector has registered in recent times are the result of a business model, a worldwide reference, based on important pillars such as innovation and professionalisation. This was stated by Miguel Ángel Higuera, director of the National Association of Pig Producers (ANPROGAPOR): “We are one of the sectors that have invested the most in innovation and technology at all levels, which has spectacularly improved our sector. These pillars are making us increasingly competitive and efficient.”

This competitiveness is what has allowed us to advance and open new markets abroad. According to Albert Vidal, director of Animal Production of the Vall Companys group, the pork sector exports more than 8,000 million euros, which places us as one of the main exporters at the European and worldwide level. “With a very positive trade balance, Spain consolidated itself as the second-largest pork exporter in the EU, only behind Germany, dramatically increasing exports to other countries, especially to China and other countries in Southeast Asia,” he explains, adding: “Achieving a position of international leadership has forced us not only to be efficient but also to be better in biosecurity, animal welfare, sustainability, circular economy, etc. All without ceasing to reflect, self-criticise and try to continue progressing”.

On the another hand, the recovery of China, is one of the issues that most worries the sector since the Asian giant is returning to the productive levels of the years before the entry of ASF into the country, making it necessary to adjust exports. In this sense, Higuera assures that “the strength of the pork sector is that the volume of meat produced and its variety of cuts makes us open to export many types of products to markets such as Japan, Korea or Thailand”. However, the European Union is being the one who assumes the volumes that previously went to China. Thus, it is returning to the starting point in terms of external trade, where the EU is the main market.

Everything mentioned so far has contributed to the Spanish pig being one of the main performers in the EU and the world, and to be a reference. On this subject, Vicenç Brieba, director of animal feed at Bon Área, believes that, although much remains to be done, cost competitiveness compared to the rest of European countries has been key to the success of the sector. “This competitiveness is mainly due to the integration system, which has allowed small farmers to make investments in their farms without taking market risks, which are assumed by the integrating companies. We must not forget that Spanish slaughterhouses have been modernised and have achieved markets with a large number of customers in many countries, attaining great international prestige for Spanish pork, “says Brieba.

In addition to what has been said so far, we must bear in mind something that Óscar Toledano, commercial director of Rotecna, comments, and that is that “the economic and social importance of the sector is a fact, especially in areas with serious problems of depopulation, where it plays a vital role in generating quality jobs that help young talent and promote female employment”.

The sector exports worth more than 8,000 million euros. Photo: Rotecna.

Costs

The pork sector closed in 2021 in the red, a situation that contrasted sharply with that experienced at the beginning of the year when there was a high demand for pork from China, and with it, the prices rose. As Vidal explains, “we started 2022 with a live price stagnant at historic lows and it seems that now it is beginning to grow to the extent that it did in previous years.” Given this panorama, it is essential to monitor cost control closely, because “since July 2020 the raw materials sector has been experiencing an unprecedented price increase and this affects the competitiveness of the entire meat and livestock value chain,” Vidal warns.

In 2022 there have not been many changes compared to the end of 2021, and farmers live in a significant shortage situation. “The costs are high, both in energy and food and, therefore, the results of the producers are negative,” says Rossend Saltiveri, responsible for the pork sector at “Unió

Spain is the world’s third largest producer of pork. Photo: Rotecna.

de Pagesos”. Higuera expects an improvement on this issue, although he expresses his concern about the production costs of raw materials: “The prices of raw materials are rising strongly. Political conflicts do not help contain these prices and contribute to their volatility. In addition, there is a high degree of speculation, which translates into an increase in the feed price.”

To deal with the disproportion between the cost of feed and the animals’ sale price, ANPROGAPOR works with the Ministry of Agriculture and Livestock and with the autonomous communities in actions such as the development of a structural plan to improve the efficiency of the supply, both of imported raw materials and national ones, and thus compensate for price volatility. On the other hand, it is also necessary to readjust supply with demand at the European Union level.

Animal welfare and health

The EU has one of the most demanding legislations in the world in terms of animal welfare, which has led the Spanish pork sector to achieve one of the highest levels of productivity in the world. As Vidal explains, “the existing legislation attempts to satisfy the five freedoms of animals: the comfort of the animal in the global ecosystem of the farm and its pen; the pleasure of the animal to access and choose its food and also to have at its disposal enrichment material; health; trust, with positive interactions with humans and other pigs without fear or stress; and the permissibility of innate behaviours of free interest or expression of the animal”, and adds: “The main meat-livestock companies have very high animal welfare and food safety certifications”. All this has contributed to being able to improve on farms and produce a better quality product more efficiently.

Environment

Since 2022, Spain has applied even more restrictive regulations regarding the emission of polluting gases and the application of slurry, to achieve maximum efficiency, have minimum nitrogen losses and achieve the maximum use of nutrients for slurry.

About the criticism received in recent times, it should be clarified that, according to the Spanish emissions system, those derived from pork production represent only 2% of the country’s total GHG emissions, a fact that is not very relevant if one takes into account that Spain is the third-largest producer in the world, and that, as mentioned above, the activity of the pork sector accounts for 1.4% of the national GDP and 14% of the Gross Industrial Domestic Product. In addition, as Toledano explains, “we have made significant progress in the total reduction in emissions per kilogramme of meat produced, including those of atmospheric pollutants such as ammonia, as we have the means to continue doing so and we continue working on the development of new techniques to go even further.”

Some of these techniques are BAT, which Saltiveri tells us about. “On the farm nowadays, we apply the available technical improvements (BAT) through ways such as feeding, offering the amount of protein that the pig needs in each of the growth phases, in housing, or the storage,” he explains.

We must also bear in mind that any co-product from droppings can be valued and returned to the agricultural cycle providing usefulness: valorising them as fertiliser reduces chemical synthesis and extractive origin fertiliser dependence, and their use improves soil structure. In this sense, Vidal recommends keeping in mind two relevant aspects: “The need to always use it per environmental parameters and continue working towards feed that allows droppings with less nitrogen”. Nor should we forget that having a solid-liquid separator, in addition to giving a good image in terms of droppings management, will allow an optimal liquid fraction to pass it through fertigation, and have a solid fraction more easily transportable to those lands that need it, and can also serve as a raw material for other treatments such as composting or biogas.

“The main challenge of the sector is to give meat exposure”.

ASF threat

In 2022, the situation regarding ASF has become highly worrying due to the proximity of the disease and its entry into Italy. As Higuera assures, “the concern of seeing how this disease is developing and the difficulties that are being seen in many countries to contain its spread puts in check the entire European pork sector and the countries that are still negative in ASF”. In this sense, Saltiveri says that it is essential to strengthen biosecurity: “One of the things we must do is reduce the wild boar population, as marked by the regulations so that in case ASF enters, it can be controlled more easily because with the density of wild boars that exist in some territories it would be very difficult to control it. On the other hand, it is very important to have maximum control of imports and achieve regionalisation, as France has done. This negotiation will be vital so that the market impact is not as great as it is happening to Germany.”

Challenges

One of the most important challenge is that of communication, giving a stronger image as an essential, structural and strategic sector of the Spanish economy. “We believe that its clear for us, but that is not enough, and we must project that image outwards, transfer everything we know and know that we are a competitive sector and provide rationing at a reasonable price,” says Higuera, who agrees with Vidal to ensure: “The main challenge of the sector is to give meat exposure. In the large ends of consumption, such as metropolitan areas, we must work so that they know livestock breeding and see the meat product as food that generates value beyond the table, without forgetting the rural environment”.

On the other hand, Saltiveri insists on the need to face environmental challenges, but especially health challenges, which he considers the most important. “We must work with less and less medication, which implies more biosecurity on farms to prevent the entry of diseases. Another challenge is to avoid ASAP as much as possible because it can have important economic consequences,” he says.

In this sense, the future of the sector goes through the professionalisation of it, and this line of work constitutes a strategic work axis.