MADRID, SPAIN — Spain’s domestic consumption of flour is growing, but much of the focus of its grains sector is on supplying a large-scale livestock industry. However, pandemic restrictions and changing demand for meat exports have affected consumption, particularly of higher-value products.

In its March 17 Grain Market Report, the International Grains Council (IGC) put Spain’s 2021-22 grains production at 23.8 million tonnes, down from 25.4 million the previous year. The total includes 8.2 million tonnes of wheat, up from 7.8 million in 2020-21. Corn production was an unchanged 4.2 million tonnes. Barley output was 8.9 million tonnes, down from 10.9 million the year before. Rye production is put at 300,000 tonnes, down from 400,000. Spanish output of durum wheat is put at 700,000 tonnes, down from 800,000 the year before.

The European Grain Trade Organization COCERAL, in forecasts issued in March, forecast Spain’s total grains production in 2022 at 20.998 million tonnes, compared with 23.055 million in 2021. That includes 6.12 million tonnes of soft wheat (previous year was 7.308 million), 765,000 tonnes of durum, up from 728,000 the year before, 8.159 million tonnes of barley, compared with 2021’s 8.966 million. COCERAL put Spanish corn production in 2022 at 3.621 million tonnes, up from 3.739 million, with rye output at 293,000 tonnes, down from 302,000, the crop of oats at 1.253 million tonnes, down from 1.191 million and the triticale crop at 762,000 tonnes, down from 793,000. Spain’s sorghum production is forecast unchanged at 27,000 tonnes.

COCERAL also put 2022 rapeseed production at 240,000 tonnes, up from 226,000 in 2021, with sunflower seed output at 786,000 tonnes, up from 774,000, while the soybean crop is forecast at an unchanged 11,000 tonnes. Total oilseeds production in 2022 is forecast at 1.037 million tonnes, up from 1.011 million in 2021.

In a report from July 30, 2021, the USDA attaché in Madrid said that “after a long-term decline trend with tree crops competing with arable land, Spain’s area planted to grains has stabilized around 5.8 million hectares.” 

“Compared to the previous season, area planted to wheat has increased, minor grains (rye, oats, mixed grains, and sorghum) area remained stable compared to the previous season, whereas barley area is below previous year’s levels,” the report said. “In the case of corn, which is mostly grown under irrigation, the combination of sufficient levels of storage water, improved margins, and the extensive use of corn as a second crop, especially in the Ebro Valley, have resulted in a slightly larger area.” 

The attaché forecast Spain’s total 2021-22 grains production at nearly 36 million tonnes, close to the previous year’s level. 

“Animal feed is Spain’s primary grain destination, accounting for over 75% of the country’s demand,” the attaché said. “In 2021-22, Spain’s feed grain consumption hinges on livestock products demand in key export markets like China, the status of outbreaks of animal diseases in other EU Member States, and the pace of recovery in the hospitality sector as public-health related restrictions are lifted.

“In 2019-20, grain usage was severely affected by the COVID-related strict lockdown that limited in-country consumption of value-added HRI (Hotels, Restaurants, and Institutions) oriented livestock product. In 2020-21, the still low HRI activity, combined with the ample pasture availability, prevented the record feed production levels registered in 2019 from being repeated.”

While struggling with the commodity prices surge, the export-oriented swine sector coped better with the sanitary crisis than HRI-oriented producers, managing to offset to a certain extent the reductions in the internal market caused by the slowdown in HRI activity and the lack of tourists, the attaché said. 

“Industry sources report that in 2020-21, the pandemic resulted in a related increase in retail sales of grain-based food products despite the reduction of sales through HRI channels and tourism,” the attaché said.

Flour milling

According to the Spanish flour millers’ association AFHSE (La Asociación de Fabricantes de Harinas y Sémolas de España), citing data collected Dec. 31, 2019, the sector has 101 active flour mills and eight semolina plants. The association described the sector as being almost entirely made up of small- and medium-size family businesses, often going back several generations. Around 80% of the mills are in rural areas and they employ some 3,000 people.

AFHSE cited National Statistics Institute (Instituto Nacional de Estadística, INE) figures putting 2019 flour production at 3,598,068 tonnes, 22% higher than in 1995. 

AFHSE described the rise as progressive but not linear, putting it down to more efficient use of production facilities. The flour produced is mainly for the domestic market, although the association said the industry does have the capacity to supply export markets. 

Exports have fallen over time, from 6% to 7% in the late 1990s and early 2000s, to 4% of production in 2019. AFHSE explained that the fall, a similar trend to other European countries, is due to an increase in processing capacity in developing countries, which means that they have replaced purchases of flour with wheat. It also said that Spanish domestic consumption of flour has trended upwards in recent years.,

Agricultural policy

Spain’s fuel ethanol production fell from a peak of 547 million liters in 2019 to 480 million in 2021. The COVID-19 pandemic resulted in reduced consumption of ethanol as fuel, while the conflict in Ukraine is impacting the availability of corn for the sector. 

Spanish agricultural policy forms part of the European Common Agricultural Policy, which will operate in a reformed version from the start of 2023. The changes give the Member States of the European Union much greater autonomy through the CAP Strategic Plans each has to draw up. Spain submitted its 3,381-page plan on time, by the end of 2021. 

Spain’s plan, according to the strategic statement it includes, “aims at the sustainable development of the agriculture, food and rural areas to ensure the food security of society through a competitive sector and a living rural environment.” Spain aims to do this by achieving greater equity in income support, with improved distribution of direct aid. It will also, it said, ensure compliance with environmental objectives, combining regulation with payments that reward farmers who go further than baseline standards. It also plans to implement a range of measures to contribute to the environmental, economic and social sustainability of the sector, including investments, innovation, training and counseling. The country also is promising an effort to encourage young people to join the industry as well as to deal with the sector’s gender gap.

On a more specific level, the plan goes into detail. For example, for milling wheat it includes requirements on the use of pesticides and herbicides and bans the use of GM varieties. 

As with every other plan submitted, the European Commission’s Directorate General for Agriculture and Rural Development (DG AGRI) has replied with observations, in a letter from Director General Wolfgang Burtscher, in response to which Spain has to amend and resubmit its plan. 

The Commission’s comments start with an issue that has hugely overshadowed the process of drawing up the new plans. 

“The Russian invasion of Ukraine and the ongoing generalized commodity price surge bring to the forefront in the strongest possible way the integral link between climate action and food security,” the Commission said. 

In general, the Commission said Member States should review their draft plans “to strengthen the EU’s agricultural sector resilience,” as well as “to reduce their dependence on synthetic fertilizers and scale up the production of renewable energy without undermining food production,” and “to transform their production capacity in line with more sustainable production methods.”