Emma Pinedo by Michael Hogan, Nigel Hunt and Nigel Hunt

MADRID/HAMBURG – Albert Pascual, a boy from Avila province in Spain, was raised by his father who bought 100 pigs. But the company he runs now boasts more than 9,000 pigs. This expansion has helped Spain to become the European Union’s largest pork producer.

In the 1990s this sector was virtually unknown. My father used to sell pigs. Pascual stated that Spain is now a global power. He said that the country has experienced tremendous growth and his company has grown along with this sector’s development.

Germany is a top producer of pork in Europe for a while, but the outbreak of African Swine Fever among wild boars in September 2020 meant that it was no longer able to access the lucrative Chinese market.

This has helped accelerate a shift of EU production to ASF-free Spain, which was already in motion thanks to its less burdensome regulations in areas like planning and the use of manure.

China, which accounts for 56% of EU’s total sales, is the biggest export market for EU pork products. This data comes from European Commission statistics.

Import demand for pork from the Philippines has skyrocketed after its ASF-related outbreak. This has decimated its huge hog herd which is one of the largest in the world.

Ramon Soler Ciurana is the export manager at Faccsa-Prolongo in Malaga, south Spain. He said that “the fact it (China), has been affected recently by African swine flu has caused demand for pork to skyrocket.”

The EU shipped 3.34 Million tonnes of pork products to China last year. This was more than 60% higher than the 2.31,000,000 in 2019, and nearly triple that 1.28million in 2018.

The exports are still high and reached 1.86million between January and July. This is just 0.1% less than the strong 2020.

Soler stated that it is assumed in the industry China will not return to normality after four years, regardless of how much effort or alternative methods are tried.

GERMAN WOES

However, Germany’s current export problems have only intensified a trend that has been growing for many years.

The Spanish pigmeat production grew by 4.1% in the first six months 2021. It is on track to record an eighth consecutive annual increase.

Germany’s pigmeat production, however, fell 1.3% to 2.52 million tonnes. This is the fifth consecutive year of decline.

AMI, a German market consultant, reported that there were 24.6 Million Pigs On German Farms in May 2021. This is 3.5% less than the 25.5 Million in May 2020. It continues a decline trend of 28.1,000,000 in 2014.

ASF’s impact has been especially severe in East Germany, near the Polish border. The disease is known to have been transmitted from wild boars to domestic pigs. There have been measures like a ban against breeding piglets and some slaughterhouses being reluctant to buy pork from the area.

TOUGH RULES

Germany has stricter rules regarding animal welfare and the environment. The decline in pig farming is also linked to falling demand.

Germany is a country with strict planning laws, making it challenging for the sector to comply with animal welfare legislation regarding issues like the use of sowstalls.

Andre Vielstaedte spoke for Toennies Germany, Germany’s biggest slaughterhouse and meatpacking company.

A portion of Germany also has restrictions on manure use due to high levels of ammonia in the atmosphere.

Spanish pig farmers however, enjoy strong demand for slurry. This natural fertilizer is made of manure and water and has a high level of organic matter.

INVESTMENTS IN SPAIN

Toennies is one of the Spanish investors.

The company, based in Rheda-Wiedenbrück in the west of Germany, is building a meat packing and slaughterhouse plant in Calamocha in Spain, costing about 75 million euros ($87 million).

Operation will commence in 2023. The facility will kill 2.4 millions animals annually and create up to 1000 jobs.

“The pork market in Spain is looking attractive and the political framework is positive,” said Toennies’ Vielstaedte.

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

Vielstaedte claimed that Germany remains the company’s main market. However, ASF is just one factor which makes it less appealing for pork farming and international marketing.

“We are burdened with one-sided regulations… animal welfare, protecting the environment and new investments create additional costs that need to be made and these extra costs can often be ignored by other farmers,” he stated.

CHALLENGES Ahead

    China has continued to report outbreaks of ASF this year, including in three of the top five pork producing areas, Henan, Sichuan and Shandong, with imports set to remain high in 2022.

U.S. Department of Agriculture’s Foreign Agricultural Service had predicted earlier in the year that China’s production of pork would drop 14% by 2022. It was a result of fewer domestic hog producers and lower profits.

The projections for 2022’s imports were at 5.1 Million tonnes, which is just below 2020’s record of 5.28million.

China had been importing between 1.5 and 2.0 million tonnes per annum of pork before its ASF-related outbreak. Sources in the industry expect that this will change as China’s herd rebuilds.

Soler declared, “This represents one of our greatest challenges.”

The Chinese market will soon return to normal and will easily reach pre-crisis numbers. Our ability to expand new markets will determine whether we can maintain the production level.

($1 = 0.8622 euros)