Five keys to understand the poultry sector in Spain

Live production and slaughter volume fall

Chicken raising and fattening fell by 2.9% in 2017, to almost 629 million animals, according to the Interbranch organization Propollo. In parallel, the volume of slaughter decreased by 2.4% with a total of 1.18 million tons of chicken meat.

These declines marked a turning point facing the upward trend of the previous three years, which reached its historic peak in 2016 when the slaughter stood at 1.21 million tons.

Sada, the sector leader, heads the adjustment

Sada, a company of the Nutreco Iberia group, which comfortably keeps leading the sector by volume of slaughter, undertook important adjustments in its productive structure throughout 2017, once its delinking from Mercadona had been completed. However, for 2018 it has budgeted 7 million € for improvements in its six remaining production centers and has made a major reorganization of its product catalog.

Meanwhile, Mercadona’s new chicken suppliers (Vall Companys, Uvesa and Avinatur) are projecting new investments.

Prices still too precarious

The 2017 decline in production meant a certain balance between supply and demand, which influenced the prices got by the companies. Thus, according to the Ministry of Agriculture, the average price at the slaughterhouse was 1.65 €/kg, 0.6 € more than the previous year’s average. In any case, this figure is still far from the 1.8 €/kg at the beginning of this decade.

At destination, the average price stabilizes at 3 €/kg, the minimum considered “profitable” by poultry operators.

Bet on other raising methods to gain value

In this context, poultry companies, in addition to a strict cost control, continue to seek formulas to gain value and differentiation from their competitors. The latest innovation is the commitment to new “more natural” raising methods, based on animal slow growth (56 days compared to 42 of the conventional broiler), with a 100% vegetable diet, antibiotic-free. Under these methods Coren, Sada, VMR, Nutrave, Uvesa and, recently, Inasur and Avinatur already commercialize different references.

Processed meat continues gaining ground

The volume of fresh processed chicken and turkey exceeded 70,000 tons in 2017, with an increase close to 20%. This rise contrasts with the decline in consumption of chicken meat at home, according to data from the Ministry of Agriculture and Kantar, which was 2.7% lower than in 2016.

All the main companies have a range of processed frescoes, but there is a group of specialists in this segment which also present new projects. This is the case of Padesa, that projects a new logistics platform, or Joviserrano, which has budgeted 3 million euro to keep growing.

A large part of the processed products come from turkey meat, a segment largely led by Procavi (ElPozo Alimentación). Fresh turkey meat’s consumption stood at just over 77,700 tons, according to the ministry, with a slight decline compared to the previous year.

However, both fresh processed (20,000 tons) and cooked and cured turkey (74,500 tons) experienced growths above 2%.

Source: Alimarket