Closures of restaurants and hotels amid the COVID-19 global pandemic has lowered domestic demand for high-end meats and slashed prices for meat products, a new USDA Foreign Agricultural Service (FAS) Global Agricultural Information Network (GAIN) report notes. These products include suckling piglets, Iberico products, high-valued beef cuts and chicken, it says. The availability of domestic meat supplies and lower tourism in 2020 will likely lower Spain’s overall imports of meat, while Spanish exports of pork and live cattle will be a driver to alleviate the loss of sales in the hospitality sector.
In the first five months of 2020, Spanish pork exports grew by 11%in volume, fueled by record-level exports to China, the report says. African swine fever (ASF) outbreaks in Germany may further expand export opportunities to Asian markets.
During Spain’s State of Alarm (March 14-June 21) because of the COVID-19 pandemic, Spanish household consumption of cheaper meats increased as a result of lower incomes following the pause in economic activity during confinement. The most consumed meats in Spain currently are chicken, white pork and pork products, and minced and lower-grade beef. Demand for higher-end cuts of meat has decreased strongly since March 14, the report says. The increase in household meat consumption during the lockdown did not offset the loss of traditional sales through the hospitality sector, celebrations and events and tourism.
Strong pork exports are expected to drive Spanish pork production to grow in 2020 and 2021, however. The report notes that the Spanish pork industry did not see a significant number of positive COVID-19 cases and pork capacity at Spanish processing facilities was not affected. Exports to non-EU countries have remained strong in 2020, and Spanish pork prices remain the same as the 2015-2019 average: 1.3 Eur/kg. So far in 2020, eight new Spanish pork establishments were approved to export pork meat and products to China, which raises the total number of approved establishments to 57, the report says.
In the first five months of 2020, China continued to be the first market for Spanish pork following the 2019 trend and surpassing major EU export destinations, namely France, Italy, and Portugal, the report finds. During this period, Spain´s exports to China grew by 121% in volume and 191% in value to $856.5 million compared to the same period last year.
On the other hand, Spanish pork exports to the U.S. market dropped almost 80% in volume and 53% in value to $10.3 million. The decline in exports was primarily due to additional U.S. tariffs on frozen pork in response to the WTO case against EU aircraft subsidies and the temporary pause of the hospitality sector due to COVID-19, the report says.
Following reports of ASF in wild boar in Germany, there may be additional opportunities for Spanish pork exports to expand in Asian countries, as China and others have banned imports from Germany. However, the report notes, a surplus of German pork could negatively impact Spanish exports to other European countries.
Spanish pork imports from other EU partners may rise as Spanish pork processors already facing tight domestic supplies take advantage of lower EU pork prices. To avoid a massive influx of lower-priced imports of live swine for slaughter, the Spanish government intends to tighten control measures at the border to maintain the health of the Spanish hogs. The Spanish government has also announced it will take steps to ensure that pork meat from Germany is not diverted through Spain, as this could have serious consequences for Spanish exports, the report says.
In 2019, Spanish swine production and slaughter reached new record levels with almost 53 million hogs slaughtered and 4.6 million tons of pork meat, which represented an increase of 1.3% and 2.4% respectively. The piglets/sow ratio stands at 27 for Spanish white pigs and 13-15 for Iberico sows, giving an average of 21 piglets/sow, the report finds. In 2020, total swine herd and sows continued to grow. According to Spanish official data, during the first semester of 2020, swine slaughter continued its growing trend, increasing 3.2% and pork meat production increased 5.5%.
During lockdown for COVID-19, demand for Iberico products such as ham, loin, sausage and other Iberico cuts destined for hotel, restaurant and institutions (HRI), was very low. The Spanish Iberico pork industry requested the Ministry of Agriculture’s support for private storage until the hospitality sector could resume normal operation. The ministry allocated $11 million to reduce Iberico production and rebalance the market, the report says. Iberico represents 10% of the Spanish swine production.
According to Spanish pork producers, during the COVID-19 pandemic, the Spanish pork sector worked at normal capacity to satisfy domestic and export demand. On March 12, 2020 (two days before the declaration of the Spanish State of Alarm) Spanish pork prices peaked to record levels. Unprecedented levels of Spanish pork exports to Asia put a strain in domestic supplies which led pork prices to begin rising in 2019. However, due to the loss of HRI activity, the ample pork supply pressured pork prices downward during the State of Alarm (March 14 to June 21), the report notes. During the week of May 18, pork prices dropped 20%from the beginning of the lockdown but remained at the 2015- 2019 average price levels. Following the re-opening of the hospitality sector in Spain and the rest of the EU, Spanish pork prices held steady at the 2015-2019 average price level until the week of June 22. Up until the week of September 24, Spanish pork prices stabilized at 1.3 €/kg at the same level of 2015- 2019 average price.
In the first five months of 2020, the total volume of Spanish pork exports grew by almost 11% compared to the same period last year, despite the COVID-19 crisis. Meanwhile, Spanish pork exports to EU markets declined. In value terms, Spanish total pork exports grew 26%, valued at $2.7 billion, the report says. During this period, the volume of Spanish pork exports to China continued growing by 121% and valued at $856 million. This export volume sharply surpassed the volume shipped to France, currently the second major destination for Spanish pork.
For more, the full report can be accessed here.
The Link LonkOctober 29, 2020 at 04:53AM
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Spain's Domestic Demand for High-End Meat Dampened by COVID-19 - Pork Magazine
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