Report Published: "Spain Agribusiness Report Q1 2014"

From: Fast Market Research, Inc.
Published: Fri Jan 24 2014

Ideal weather conditions have led to exceptional 2013/14 harvests for barley and wheat. Corn crop area and yields were up on previous years, but lower prices will see weaker performance in coming years. Plentiful supplies of grain will benefit the livestock sub-sector with pork and poultry seeing solid growth. Supply and demand of beef remain in the doldrums. Dairy farmers had a difficult 2013 with farmgate prices only recovering in the second half of the year, but the efforts of the government to follow EU policies by promoting cooperation among producers and healthy export demand for Spanish cheese should make for a happier new year.

Key Forecasts

* Corn production to 2016/17: -4.3% to 4.0mn tonnes. The strong 2013/14 harvest will be followed by decline as prices have slumped and are expected to remain low to 2016/17.
* Poultry consumption growth to 2017: 4.2% to 1.37mn tonnes. Hard-pressed consumers will favour this relatively cheap livestock commodity.
* Milk production to 2016/17: -3.3% to 5.9mn tonnes. Although recent reforms have helped, dairy farmers continue to struggle with low prices and weak domestic demand.
* 2014 consumer price index: 1.4% average (up from 1.3% in 2013).
* BMI universe agribusiness market value: 5.2% year-on-year (y-o-y) growth to US$17.0bn in 2014, forecast to grow by an average 1.0% y-o-y between 2013/14 and 2016/17.

Full Report Details at

Industry Developments

Spain has been rocked by another horsemeat scandal as police made arrests in December connected to the alleged sale to abattoirs of horses used by pharmaceutical company Sanofi in developing medications. This new scandal for the Spanish meat industry comes soon after the announcement in November of new Standard Operating Practices developed by the food industry with the support of the Spanish Ministry of Agriculture, Food and Environment (MAGRAMA). The new procedures are designed to improve monitoring of the meat supply chain, avoid cross-contamination and improve product labelling. It is not yet clear whether the horsemeat has entered the food-chain in Spain.

Efforts to support Spanish dairy farmers are continuing to yield positive results judging from the latest information provided by the government. Farmgate prices are recovering, reaching EUR0.38/litre in October. New initiatives to support the sector are being adopted as part of a broader EU effort 'the Milk Package' which aims to improve coordination of member states' dairy industries in order to minimise the impact of the end to the quota system in 2015.

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