I have just returned from a 10-day trip to Spain, one of my favorite countries to visit in Europe. I stayed mostly in Barcelona and once again enjoyed its beauty, culture, food and more. I also made a two-day trip to the foothills of the Pyrenees, where I witnessed up close both the stunning countryside filled with pastures and dense green forests and also the Spanish cattle industry.
As I drove through the region, I saw numerous beef cattle herds, some of which appeared to be Charolais but were more likely to be one of the 49 native beef breeds that Spain has. I also saw thousands of round hay bales standing in what were often fields of no more than a couple of acres. I saw up close the ultramodern feeding barns, whose roofs no doubt gave respite to the cattle from the blazing sun.
I won’t presume to make any conclusions after what was just a cursory glimpse, but it appeared that the Spanish cattle and beef industry is thriving and is an important part of the country’s overall economy. But it is also in transition.
In a recent report, USDA said that after years of increased production of animal protein, Spain is taking a different approach for the livestock sector. The Spanish livestock sector’s strategy is now focused on a more controlled expansion and diversification of export markets. The overall Spanish meat sector, including cattle and swine, is willing to invest around $3.63 billion, partially through European Union (EU) Next Generation funds, to improve animal welfare, sustainability, and efficiency in an effort to modernize the sector.
Spanish livestock production contributes more than $17 billion to the country’s agricultural production, while Spain’s meat industry has a turnover of more than $30 billion, USDA says. This represents 22.6 percent of the total Spanish food industry, making it the leading sector, with exports of $10.4 billion. However, the new approach may lead to a contraction in livestock inventories for 2022, as producers are looking to minimize the environmental impact and find alternative export markets to China.
In 2020, Spanish official data for cattle and beef showed a slight decrease in production because of the COVID-19 pandemic and higher feed prices. In 2020, Spanish cattle slaughter declined 3.5 percent to 2.4 million animals. Spanish beef production also decreased by 2.6 percent to 677,740 metric tons (mt), while carcass weights rose 1 percent to 279.5 kilograms (about 615 pounds) from the delays in slaughtering because of the closure of the hospitality sector.
According to the sector, Spain’s cattle slaughter likely decreased 2.4 percent in 2021, mainly due to a reduction in calf slaughter, and 3.5 percent in 2022, due to low economic performance and Spanish cattle growers’ intention to reduce production. Spanish cattle herd ending inventories for 2022 might decline 1.1 percent, says USDA.
In 2020, Spain’s beef exports grew 4 percent to 231,000 mt and $903 million, mainly fueled by an 8 percent rise in exports to the EU, especially to Italy and Greece. This level of exports and a decrease in imports led to the second positive trade balance since 2000 of $289 million. This positive trend continued from January to July 2021.
In 2020, Spain exported 85 percent of its beef to other EU member states, mainly to Mediterranean countries, USDA says. Additionally, since 2020, Spanish beef exports experienced significant increases to Canada, Indonesia, Vietnam and Hong Kong. According to the Spanish beef industry, in 2020, Spanish beef exports experienced a change in trade flow from North Africa to new markets. Additionally, the Spanish beef sector is still working to open China and South Korea. USDA says according to industry sources, Spanish beef exports to non-EU markets are expected to rebound to normal levels in 2021, continuing with a positive trend in 2022.
Exports are thus the lifeblood of the Spanish beef industry. In contrast, U.S. beef exports represent only 15-17 percent of total production. But, they are also vitally important to the health of the industry. Exports have boomed so far this year and maintained their exceptional performance in May, with no signs of slowing down despite ongoing challenges. Exports set both new volume and value records, topping $1 billion for the fourth time this year.
May beef exports reached 135,006 mt, up 1 percent from the previous high posted in May 2021. Export value climbed 20 percent to $1.09 billion, breaking the March 2022 record. For January through May, beef exports increased 4 percent from a year ago to 613,266 mt, valued at $5.14 billion (up 34 percent).
Even more important, May beef export value averaged $505.02 per head of fed slaughter, up 17 percent from a year ago, which broke the previous record of $503.68 set in January 2022, according to the U.S. Meat Export Federation. Through May, per-head value averaged $483.49, up 34 percent from the first five months of 2021. That is how important our exports are. — Steve Kay
(Steve Kay is editor/publisher ofCattle Buyers Weekly,an industry newsletter published at P.O. Box 2533, Petaluma, CA, 94953; 707-765-1725. Kay’s Korner appears exclusively in WLJ.)
