Kay’s Cuts: The Spanish Meat Industry’s $3.65 Billion Drive To Increase Animal Welfare And Sustainability

A monthly column written about the global beef trade by Steve Kay, publisher of US Cattle Buyers Weekly

I have just returned from a ten day trip to Spain, one of my favorite countries in Europe to visit.

I stayed mainly in Barcelona and once again enjoyed the beauty, culture, food and more. I also made a two-day trip to the foothills of the Pyrenees, where I got up close and personal with the beautiful countryside full of meadows and dense green forests, as well as the Spanish livestock industry.

As I drove through the region, I saw numerous herds of beef cattle, some of which appeared to be Charolais, but were probably one of the 49 native beef breeds Spain has.

I saw thousands of round bales of hay in often fields of no more than a few acres. I also saw up-close state-of-the-art feeding stables, the roofs of which no doubt gave the cattle respite from the blazing sun.

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I dare not jump to conclusions after what was only a cursory glance, but it seems that the Spanish cattle and beef industry is thriving and an important part of the overall economy of the country. But it is also in transition.

In a recent report, USDA said that after years of increased animal protein production, Spain is now taking a different approach to its livestock farming.

The Spanish livestock sector’s strategy now focuses on a more controlled expansion and diversification of export markets.

The total Spanish meat sector, including cattle and pigs, is ready to invest approximately $3.63 billion, in part through the European Union’s Next Generation funds, to improve animal welfare, sustainability and efficiency and to modernize the sector .

Spanish livestock contributes more than $17 billion to the country’s agricultural output, while the country’s meat industry has sales 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.

Decrease in livestock

However, the new approach could lead to a contraction in livestock inventories before 2022 as producers strive to minimize environmental impact and find alternative export markets to China.

Rubia Gallega cattle, one of the many Spanish heritage beef breeds

In 2020, Spanish official data for cattle and beef showed a slight decline in production due to the COVID pandemic and higher feed prices. In 2020, the number of Spanish cattle fell by 3.5 percent to 2.4 million animals. Spanish beef production also fell by 2.6 pc. to 677,740 tons, while the carcass weight increased by 1 pc to 279.5 kg due to the delays to slaughter due to the closure of the catering sector.

According to the sector, cattle slaughter in Spain is likely to decrease by 2.4 percent in 2021, mainly due to a reduction in calf slaughter, and by 3.5 percent in 2022 due to the low economic performance and the intention of Spanish livestock farmers to to reduce production.

Stocks ending Spanish livestock before 2022 could fall 1.1 percent, USDA says. In 2020, Spanish beef exports grew 4 percent to 231,000 tons and $903 million, mainly due to an 8 percent increase in exports to the EU, especially to Italy and Greece. This level of exports and a decline in imports led to the second positive trade balance since 2000 of USD 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 the Mediterranean countries, USDA says.

Export targets for China, South Korea

Since 2020, Spanish beef exports have increased significantly to Canada, Indonesia, Vietnam and Hong Kong. According to the Spanish beef industry, Spanish beef exports saw a change in trade flow from North Africa to new markets in 2020.

In addition, the Spanish beef sector is still working on the opening of China and South Korea. According to industry sources, Spanish beef exports to non-EU markets are expected to return to normal levels in 2021 and continue a positive trend in 2022, the USDA says.

Exports are thus the lifeblood of the Spanish beef industry, as it is for Australia.

US export increase

In contrast, U.S. beef exports represent only 15 to 17 percent of total production. But they are also important for the health of the industry.

Unlike Australia’s sputtering exports, US exports have soared so far this year and continued to perform exceptionally in May and June, showing no signs of slowing down despite ongoing challenges.

Exports set new volume and value records, reaching $1 billion this year for the fourth time.

US beef exports reached 135,000 tons in May, an increase of 1 pc. compared to the previous record in May 2021. The export value rose by 20 pc to US$ 1.09 billion, breaking the record of March 2022. From January through May, beef exports rose 4 percent from a year ago to 613,266 tons, worth $5.14 billion (up 34 percent).

More importantly, the export value of beef from May averaged $505 per animal fed, 17 percent more than a year ago, breaking the previous record of $503 set in January 2022, USMEF says. Through May, per capita export value was US$483.49, up 34 percent from the first five months of 2021. That’s how important our exports are.