Total Hay Produced

• While the exact amount of hay production in MT was not available, Seed Quest had reported that there 17 million acres devoted to alfalfa hay production in Argentina. This can be converted to 6,879,900 ha.
• A report from the World Alfalfa Congress states that on-farm average alfalfa yields in "rain-fed operations, production can go from 4-6 MT DM ha-1 year-1 under 3-5 cut systems in La Pampa to 18 MT DM ha-1 year-1 under 7-8 cut systems in Southeastern Córdoba."
• It was also found that "approximately 80% of the total alfalfa area is cultivated under rain-fed conditions for dairy, beef and hay production in the Pampas Region, while the remaining 20% is devoted to hay and seed production under irrigation in the Northwestern, Western and Patagonia regions."
• Based on the above finding that hay in Argentina is mainly cultivated under rain-fed conditions, we will take the mid-value of 11 (4+18/2) tonnes of dry material per hectare per year as the average yield and calculate the total hay (Alfalfa) production as approximately 625,445 tonnes (6,879,900/11).

Total Market Value

• The market value of hay production in Argentina was not available. Therefore, we will calculate an approximate value using the export price of hay.
• According to the World Alfalfa Congress, the average price per tonne for hay in Argentina in the first semester of 2018 was USD 342. With this information, the total market value of 625,445 tonnes can be calculated as USD 213,902,190. This is equivalent to around 16.28 billion in Argentina's local currency (ARS).

Export Volume

• The report further states that 54,423 MT of Alfalfa hay was exported during 2017.

Export Countries

• A report from the 6th China Alfalfa Development Conference (Chinese title translation) has mentioned that the main export destinations for Alfalfa hay in Argentina are "UAE and Saudi Arabia, and to a much lesser extent, Jordan."

Hay Plantation and Harvest

• According to Seed Quest, Argentina has approximately 17 million acres devoted to alfalfa hay production.
• While the average hay harvested per acre was not available, it was found that during the rain-fed conditions, production ranges from 4-18 MT of dry material per hectare per year and under irrigation, the harvest ranges from 10-18 MT of dry material per hectare per year (the World Alfalfa Congress).

Triangulation Data Sources

• A combination of public statements, white papers and presentations by industry experts in Argentina's hay market were identified and used to triangulate the approximate breakdown of hay crop production in the country.
• Most recently in 2019, President of Sociedad Rural Argentina Luis Miguel Etchevehere publicly stated that Argentina "producimos 4 millones de toneladas de heno de alfalfa" (produces 4 million metric tons of alfalfa hay per year).
• The year prior, Instituto Nacional de Tecnología Agropecuaria representative Daniel Basigalup published a white paper, wherein he disclosed that alfalfa was the primary hay product of the country, and that "about 60% is planted as pure stands and 40% in mixtures with temperate forage grasses."
• In parallel, ArgenBio representative Dr. María Luz Zapiola delivered a 2018 presentation in which she stated that alfalfa, fescue and ryegrass collectively represented 70% of Argentina's local hay market, and that temperate forage grass seeds in the country were primarily comprised of annual ryegrass (58%), perennial ryegrass (15%), tall fescue (21%) and cocksfoot (6%).

 

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• Notably, this reporting by Dr. Luz Zapiola is corroborated by a separate, more dated white paper by Mr. Basigalup, which asserts that the temperate grasses used in Argentina's hay production are "mainly" Festuca arundinacea (also known as tall fescue), Bromus catharticus (also known as prairie grass), Lolium spp. (also known as ryegrass) and Dactylis glomerata (also known as cocksfoot or orchard grass).

Triangulation Calculation

• The research team first triangulated Argentina’s annual alfalfa hay production in metric tons by combining President Etchevehere's figure for total annual hay production in the country with Mr. Basigalup's data on the proportion of production that is of the alfalfa varietal.
• In cases where hay production was a “mixture” of alfalfa and “temperate forage grasses,” the research team assumed a 50/50 split between alfalfa and these other grasses, given the lack of credible, publicly available quantitative data on this highly specific subject.
• As such, the annual metric ton production of alfalfa hay in Argentina was estimated at 3,200,000 metric tons, based on the following calculation: (4,000,000 metric tons of hay * .60) + (4,000,000 metric tons of hay * .40 * .50) = 3,200,000 metric tons.
• This production value for alfalfa hay also implied that the total production of other temperate forage grasses in the country is 800,000 metric tons annually, per the calculation: 4,000,000 metric tons of hay — 3,200,000 metric tons of alfalfa = 800,000 metric tons of other grasses.
• This metric ton production of other hay grasses was then combined with Dr. Luz Zapiola's detailed breakdown of hay grass seeds in Argentina, which estimated that 584,000, 168,000 and 48,000 metric tons are produced of ryegrass, fescue and cocksfoot/orchard grass, respectively, every year.
• The calculation for ryegrass production was as follows: 800,000 metric tons * (.58 + .15) = 584,000 metric tons.
• Additionally, the calculation for fescue production was as follows: 800,000 metric tons * .21 = 168,000 metric tons.
• Finally, the calculation for cocksfoot/orchard grass production was as follows: 800,000 metric tons * .06 = 48,000 metric tons.

Helpful Findings

• Although there is no credible, publicly available information regarding the percentage breakdown of hay production in Argentina by shape or size, a white paper published by the country's Instituto Nacional de Tecnología Agropecuaria (National Institute of Agricultural Technology) in 2018 reported that the "vast majority" of hay produced in the country is packaged as "small bales (22 kg), round bales (350 to 450 kg) or prismatic big bales (400 kg)."
• Notably, this assertion appears to be somewhat corroborated by online retailer Alibaba, which currently displays "big bale" hay as the most common hay product available in international markets from Argentina.
• Additionally, pellets appear to be regularly sold as a common Argentinian hay product across international markets, per Alibaba's website.
• However, it is possible that this information on pellet sales is less representative of larger hay production in Argentina, given that most of the country's hay production is used/sold domestically rather than through international channels.
• Meanwhile, it seems likely that Argentina's hay products are regularly wrapped and rarely if ever dehydrated, based on further statements by the Instituto Nacional de Tecnología Agropecuaria.
• Specifically, the Argentinian government body reports that "there are no dehydration plants in Argentina" and that "all hay is cured in the field."
• Considering that dehydration plants are typically required to dehydrate hay, per alfalfa dehydration expert Anso Alfalfas, it appears unlikely that any meaningful portion of the country's hay production is dehydrated.
• Additionally, given that hay is cured in fields in Argentina, it is likely that wrapping is regularly used to ensure quality and "minimize weather risks."

Introduction

Hay Market Overview: Argentina

• Approximately 90% of alfalfa hay grown and produced in Argentina is used by local farmers, while the remaining 10% is either exported or sold for outside purposes. This information is also listed in row 3, columns AG-AH of the attached spreadsheet.
• In Argentina, about 95% of alfalfa hay is grown by small, local farmers. Such farmers have crops that cover less than 5 hectares of land. This information is also listed in row 3, column AI of the attached spreadsheet.
• Medium-sized alfalfa farmers make up nearly 4.44% of total alfalfa productions with crops spanning between 6-50 hectares. This information is also listed in row 3, column AK of the attached spreadsheet.
• Large or commercial farmers with more than 50 hectares of farming land only account for 1.11% of alfalfa productions in Argentina. This information is also listed in row 3, column AK of the attached spreadsheet.

Research Strategy

Dairy Cows

• According to FAO, Argentina has close to 1.9 million dairy cows spread across about 12000 farms.
•  DairyLando reported that hay contributes about 11% of total dry matter intake in Argentina's dairy industry.
• Information provided by Dairexnet indicated that dairy cows will on average consume about 22kg of dry matter per day.
• This implies that the total amount of dry matter consumed by dairy cows in Argentina is about 41,800 tons calculated by the formula: (the average dry matter intake per dairy cow (kg) * the population of dairy animals in Argentina)/1000 = (22kg * 1,900,000)/1000 = 41,800,000/1000 = 41,800 tonnes.
• Since hay contributes 11% of total dry matter intake in Argentina's dairy sector, the hay intake is about 1.7 million tons calculated by the formula: total dry matter consumption per day * the number of days in a year * hay percent share = 41,800 tons per day * 365 days in a year * 0.11 = 1,679,000 tons.
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Beef Cattle

• According to NEPCon, Argentina had over 52 million beef cattle.
•  IntechOpen indicated that hay contributes about 20% of beef feeds in Argentina's beef pastoral system.
•  Drovers reports that the average amount of feed a beef animal should consume per day is about 26 kg.
• This implies that the beef animals in Argentina will consume about 493 million tons of feed and about 99 million tons of hay per year.
• This was calculated by the formula: the number of beef animals in Argentina*average feed per animal per day*number of days in a year*hay percent feed share = 52,000,000 animals*26 kg per animal * 365 days in a year * 0.2 = 98,696,000. 

Equine

•  Scielo reports that Argentina has about 2.5 million equine species. According to Argentina Polo Day, horses consume between 6 kg and 9 kg of hay and/or grass per day.
•  Argentina Polo Day instructs that horses should have a sufficient amount of hay to chew and we assumed that hay could contribute to over 50% of the horse feed (over 3 kg — 4.5 kg) per day. We also assumed that the feeding regime provided by Argentina Polo Day applies to other equine species.
• This implies that equine will consume between 2.7 million and 4 million tons of hay per year. This was calculated by the formula: (the number of equine in Argentina*the amount of hay consumed per day*number of days in a year)/1000 = (2,500,000*3kg-4.5kg*365)/1000 = 2,737,500 tons — 4,106,250 tons per year.

Sheep & Goats

• According to eFarmNews, Argentina has about 15 million sheep spread across about 80,000 producers and FAO reports that sheep in Argentina are mainly fed by grazing.
• A report published in the Multequina Journal shows that there are about 4.2 million goats in Argentina and that most of these goats feed on grass and fresh grass and herbs.

Pets

• According to a report by The World Radio, about 78% of Argentines own pets and the population of the country is about 45 million. This implies that there are about 35 million pets in Argentina and this was calculated by multiplying the country's population by 78%.
• An in-depth study of the pet foods offered by the leading pet companies in Argentina does not show hay as one of the pet foods in this country. We assumed that the absence of hay in these companies implies that Argentines do not feed their pets on hay.

Key Findings

• Among major forage crops, namely bahiagrass, alfalfa, fescue and clover, alfalfa has the dominant market share in Argentina. The country is one of the two largest alfalfa growers in the world, with 3.2 million hectares of land dedicated to this in 2018.
• There are some quality metrics that are used for evaluating the quality or value of alfalfa hay, such as crude protein and relative feed value, but people in Argentina tend to choose hay based on such factors as smell, color, and the presence of leaves and pay by weight. This has resulted in the low-to-medium quality of alfalfa hay in the domestic market.
• The vast majority of alfalfa hay has been used to graze dairy and feed beef and sheep by farmers. Forage in the form of hay or silage is mainly grown and conserved for the time when there is a lack of hay in the market to feed livestock.

Research Strategy

Key Notes / Assumptions

• A significant portion of the information used to prepare a high level overview of Argentina's hay market was sourced from a white paper released in 2018 by Daniel Basigalup entitled "An Overview of the Alfalfa Industry in Argentina."
• Notably, Mr. Basigalup is a highly credentialed and widely recognized expert in Argentina's agriculture industry, as a leader within the country's Instituto Nacional de Tecnología Agropecuaria (National Institute of Agricultural Technology) who specializes in the "Mejoramiento de Alfalfa en INTA" (improvement of Alfalfa markets in the country).
• Meanwhile, several additional credible sources were also utilized to provide background information regarding the country's alfalfa hay market, including reports by market intelligence firms (e.g., TRIDGE, Market Data Forecast) and industry trades (e.g., Hay & Forage Grower, eFarmNews).