Monday, February 26

The pig macro-farms have a problem and it is not Garzón: it is the Chinese market

  • The golden age of the Spanish pig comes to an end as China recovers from its swine fever

  • More than half of Spanish pork production is exported and the Asian country is our main buyer

  • Ecologists warn that those who will lose out will be the ranchers who have worked for years as part of large companies

On November 16, 2007, Spain and China signed an agreement in Beijing that opened the door to pork export to asian country, the largest consumer in the world.

The process had started two years before. Were needed diplomatic visits (of the Minister of Agriculture, Elena Espinosa, and of the kings) and techniques (from the Chinese supervisors, to verify that our country complied with its sanitary and veterinary requirements) to complete it.

Since then, Spain has risen through the ranks to become the China’s main supplier of pork.

In 2018, swine fever hit the country hard, forcing Chinese farmers to cull millions of animals. Spain took advantage of the opportunity and production and exports soared, which caused a real golden age of the Spanish pig.

But as China recovers, the ‘boom’ of the pig threatens to come to an end.

“The truth is that they have been years of success at an international level,” admits Daniel de Miguel, general director of the Interporc employers’ association, to ‘El Periódico de España’. “Although we have not yet closed the figures for 2021, China continues to be the main destination for our exports. But there has been a slowdown. On the other hand, there is increasing competition from countries like Brazil or the United States.”

In Spain there is 57 authorized companies to sell pork in China. They not only sell meat, entrails and offal, but also cured products such as ham, loin, chorizo ​​and salami.

Most are companies that already existed, known in the Spanish market. For some, income from abroad accounts for more than half, such as Cárnica Batallé (52%) or Grupo Jorge (84%), according to their latest annual accounts.

El Pozo, to give another example, has gone from a 4% of export earnings in 2010 to 20% in 2020.

From the growth of these companies arise large pig farms, whose size has increased in recent years. According to data collected by Datadista, “the number of pigs in Spain has increased by more than 50% since 2007, while the number of farms has decreased by 11.17%”.

That is to say, production is increasingly concentrated, although the term ‘macro farm’ is not defined (it is understood that they are those that house several thousand pigs).

“As a result of swine fever, an impressive hole was created in China. They needed a lot of meat and they began to pull from the international market. There is a struggle between several countries. In Europe, the one that has taken the most prominence has been Spain,” he says. a source with great experience in the sector. “Many strong companies considered growing and were approved to suit Chinese requirements. This has precipitated countries like Germany and Denmark to reduce their census, because Spain is more competitive in terms of costs. We do very well.”

The controversy of the macro-farms -which has dotted political news for days, with cross statements between members of the Government, regional presidents and the opposition— is, for the sector, a little crumb next to the one that can come over him in the coming years, when China no longer needs our pork.

“Safety and quality are guaranteed. We are not going to doubt that, no matter how much people who do not know the sector talk about it,” says the director of Interporc, alluding to the statements by Minister Alberto Garzón, which originated the debate. “What we have been doing for a long time are important efforts to to diversify. We are present in more than a hundred countries and there are still more. On the one hand, we accompany the sales strategy with messages regarding our efforts in animal welfare and sustainability. On the other, we have great ambassador products that other countries do not have, such as Serrano ham and sausages“.

“Spain is competitive because its environmental legislation is more lax than in other European countries,” adds Daniel González, from Ecologistas en Acción and coordinator of the Stop Industrial Livestock campaign. “We can produce cheaper. But it is a temporary matter. China signed a production agreement with Argentina a year ago. As soon as there is another place in the world that lowers the costs, the bubble will burst.”

Who will lose?

According to data from Interporc, Spain sells abroad more than half of what it produces. In the absence of the closed and definitive figure, in 2021 5.1 million tons of pork were produced and 3.1 million were exported.

In addition to China, where the slowdown compared to 2020 is already noticeable, Spain sells in the European Union, Japan, and other Asian markets, such as South Korea and the Philippines. But none is as important as the world’s most populous country.

According to industry sources consulted, the development of macro-farms is independent of the Chinese boom and would have happened the same without it, although on a smaller scale.

Industrialization is the natural evolution. Before there were smaller farms and now they are bigger, just like IKEA exists for furniture. In my opinion, they are better in many ways: the way of purifying manure is more efficient in a new and large farm, with its own treatment plant, than in a small one,” says a person who works as a veterinarian.

Parallel to the increase in the size of farms, in Spain the integrator model.

“The feed mills thought that, to ensure sales, they wanted to have pig production and close the cycle,” continues this person. “They took people who already had facilities and brought them the animals. They pay money to fatten each animal. When they are fat, they collect them, kill them and sell the meat. The farm owner is paid a fixed amount, unaffected by feed price fluctuations.”

In addition to the pollution it generates and the disappearance of smaller farms that cannot compete, This is one of the criticisms that organizations like COAG make of industrial livestock farming. They compare it to a process of “uberization”.

From Ecologistas en Acción they warn that it will be these ‘uberized’ ranchers who will lose out when exports are further reduced.

“The number of pigs in Spain could be reduced, with the victims being people from the countryside. Those who have made investments to assemble ships. If the integrating company stops buying from them, they will have to closeGonzalez says.

Related news

The decline in Chinese purchases is one of two big problems facing the industry. the other is the possible arrival of swine fever in Spain, which coincidentally has also remained hidden on the political plane. Italy has already detected cases in the north of the country, France has reached an agreement with China to, if it arrives, export from areas free of the disease and here the concern is maximum.

“It is a problem, of course. If there is a positive, it forces you to slaughter animals and establish a protection and surveillance zone. And the day after detecting it, most Asian markets block imports. A sector that depends so much on exports can be seen overnight with great economic losses“, concludes the director of Interporc.