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Spain Agribusiness Report Q2 2014 - New Market Report

New Food market report from Business Monitor International: "Spain Agribusiness Report Q2 2014"


Boston, MA -- (SBWIRE) -- 04/29/2014 -- Plentiful supplies of corn and barley will hold down feed prices in 2014, with positive implications for meat and dairy producers. Pork and poultry output and consumption will continue to outperform beef, with cattle herds diminished after years of falling demand. The restructuring of CAP payments may provide some succour for beef producers, but recovery, if it comes, will likely be a long way off. Milk prices are expected to continue their recovery from the crisis levels of early 2013, with dairy farmers also benefitting from buoyant demand for cheese. Wet weather in the winter and spring is expected to have largely beneficial effects, especially in the irrigation-reliant south, but sugar yields are reported to have fallen as a result: more bad news for an ailing industry.

Key Forecasts

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- Corn production to 2017/18: 0.8% to 4.3mn tonnes. Lower prices will see declining acreages, but increasing yields will compensate for this, especially as we expect to see increasing use of GM corn.
- Poultry consumption growth to 2018: 4.2% to 1.4mn tonnes. Cash-strapped consumers will favour this relatively cheap livestock commodity.
- Cheese production growth to 2018: 7.6% to 341,000 tonnes. Growth in demand for Spanish cheese at home and abroad will support steady increases in production.
- 2014 real GDP growth, % y-o-y: 0.8%; up from -1.2% in 2013 and forecast to grow by an average 1.3% between 2014 and 2018.
- 2014 consumer price index: 0.6% average (down from 1.4% in 2013).
- BMI universe agribusiness market value: 5.2% year-on-year (y-o-y) growth to US$15.45bn in 2014, forecast to decline by around 0.5% between 2014 and 2018.

Industry Developments

In February 2014 Russia announced a ban on pork imports from all 28 member states of the European Union in response to outbreaks of African Swine Fever Virus (ASFV) in Lithuania and Poland. Spain has apparently begun talks to allow Spanish producers to regain access to the Russian market after their products had been subject to a more long-standing ban imposed in 2013. Rosselkhoznadzor (the Russian Federal Service for Veterinary and Phytosanitary Surveillance) scheduled negotiations between its Head, Sergey Dankvert, and Isabel Garcia Tejerina, Secretary General for the Ministry of Agriculture and Food in Spain, held on March 14 in Madrid. At the time of writing, these negotiations are ongoing.

Andalusia, the region accounting for over 25% of domestic agricultural GDP and 37% of Spain's registered growers, has lost the battle against other Spanish regions in the negotiations for the distribution of the European agricultural funds. The Ministry of Agriculture has decided how the funds assigned through the Common Agricultural Policy (CAP) for the 2015-2020 period will be distributed, cutting approximately EUR418mn from Andalusia's usual allocation (around EUR2bn per year).

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