Hay Market Research: Argentina

Part
01
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Part
01

Hay Market Research: Argentina, Part 1

While we were unable to find exact statistics related to the overall production of hay in Argentina, we did find several sources with information on Alfalfa hay production (the primary forage in Argentina). Our findings have been presented in this spreadsheet. Detailed explanations and calculations related to our findings have been provided below.

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).


Part
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Part
02

Hay Market Research: Argentina, Part 2

Although credible, pre-compiled information regarding the precise breakdown of hay crop production in Argentina is not publicly available, the latest reporting by industry experts indicates that alfalfa represents the large majority of hay production in the country, followed by ryegrass, fescue and cocksfoot. Quantitative estimates for this breakdown are provided within the enclosed spreadsheet, while details of the associated calculations are provided within the below summary.

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%).
  • 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.


Part
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Part
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Hay Market Research: Argentina, Part 3

The most credible, recent reporting on Argentina's hay market indicates that the preponderance of hay in the country is packaged into "small bales, round bales or prismatic big bales," and that these products may be regularly wrapped but are rarely dehydrated.

Notably, and exhaustive review of industry trades (e.g., Today's Farmer Magazine), market research reports (e.g., Market Data Forecast), articles by experts in Argentina's hay market (e.g., INTA), content by industry organizations (e.g., World Alfalfa Congress), content by industry players (e.g., Bioceres), reporting by international trade organizations (e.g., USDA Foreign Agricultural Service) and information from hay retailers (e.g., Alibaba) revealed that there is no credible, publicly available information regarding the precise percentage breakdown of hay production in Argentina by shape, size or drying method. However, related qualitative commentary was identified, and has been synthesized within the helpful findings section below as well as within the enclosed spreadsheet.

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."
Part
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Part
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Hay Market Research: Argentina, Part 4

Introduction

In Argentina, a majority of alfalfa hay that is grown is used by farms for the purpose of grazing, particularly by dairy and beef farmers. Although Argentina is one of the world's largest producers of Alfalfa hay, only a small percentage of total crop produced is exported or sold for alternative purposes. In addition, almost all of the alfalfa hay grown in Argentina is farmed by small, local farmers that have crops spanning less than 5 hectares of land.

The specific values that define the data points listed above can be found in row 3, columns AG-AK of the attached spreadsheet. All sources used to compile this information are listed in row 3, column AL. Below is a brief overview of these findings, but please review the referenced columns for more details.


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

In order to identify the total percentage of alfalfa hay that is produced in Argentina and then used on farms (i.e. not sold or exported for alternative purposes), we first reviewed sources identified during previous portions of this research. This led us to a source by the International Trade Center that confirmed what portion of Argentina's alfalfa hay is exported. This value was used to reference what portion was already known to be used for alternative purposes. From there, we came across a source from the University of California, Davis that specifically stated more than 90% of alfalfa hay is used for grazing by beef and dairy farms in the country. As we were unable to identify exactly what value of alfalfa farms above 90% were used for this purpose, we took the liberty of sticking with the value of 90% even.

For addressing the size of alfalfa hay producers in Argentina, we had to reference a source that identified this information on a smaller scale and apply it to the country overall. Many sources we located, including those listed above, one from the China Alfalfa Development Conference and International Alfalfa Conference, as well as from the Food and Agriculture Organization of the United Nations (FAO), stated that just about all alfalfa farms in Argentina are owned by small, local growers. The source from the FAO provided specific values for the number of small-, medium-, and large-sized alfalfa growers in a province of Argentina — Santiago del Estero. The categories were defined by this source based on the relative number of hectares that a given farm had to grow alfalfa hay. Those with less than 5 hectares were considered small, those with between 6-50 hectares were medium, and any with 50+ hectares were considered large farms. Using this information and the fact that all other sources located also indicated that small farms were the majority growers, we made the educated assumption that this metric likely applied to the rest of Argentina relatively closely. This led us to the conclusion that 95% of alfalfa growers in Argentina are small, and the remaining are medium- and large-sized farmers. The specific values used to arrive at these percentages are listed in row 3, column AK of the attached spreadsheet, but can also be reviewed in the FAO source.
Part
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Part
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Hay Market Research: Argentina, Part 5

An overview of the hay market in Argentina can be found in row 3, columns AM-AR of the attached spreadsheet. The dairy, beef, and equine industries consume about 1.7 million, 99 million, and about 2.7 million tons of hay each year respectively. The amount of hay consumed by the sheep & goats and the pet industries is negligible.

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.

Beef Cattle

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

Pets

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Part
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Hay Market Research: Argentina, Part 6

The research looks into the hay market in Argentina where alfalfa is the dominant hay crops. Hay crops are mainly used to graze dairy and feed livestock, however, some quality or value criteria have not been well followed in the Argentinian market. For more details, please refer to the attached spreadsheet, row 3, columns AS-AV.

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

The research reviewed a variety of academic papers, conference papers, and market research reports. The Argentinian hay market is mainly concentrated in alfalfa, with limited information on other hay crops, such as bahiagrass, rescue and clover. Besides the practice of ensuring the quality or value of hay, there is limited information on common practices, regarding when to deliver hays to end-users once they are ready for sale, but it is expected to be in line with the market economics of demand and supply.
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Part
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Hay Market Research: Argentina, Part 7

A high level overview of Argentina's hay market has been provided within the enclosed spreadsheet. Notably, Argentina's alfalfa hay production is the largest in Latin America, and is forecast to grow meaningfully for the foreseeable future.

Key Notes / Assumptions


Part
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Part
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Hay Market Research: Argentina, Part 8

Argentina is one of the main producers of alfalfa hay and hay products in Latin America. Argentina is also one of the global leaders in biotech crops, producing over 12% of the total amount of bio-modified plants. Unfortunately, some of the major weaknesses of the haymarket in Argentina is the poor quality of the final product and its weak international presence. Despite that, Saudi Arabia's recent commitment to preserving its water supply has given the opportunity to the Argentine haymarket to boost its production and increase its exports towards the country. The only problem is that drought has been a big problem to the agriculture sector in the country as the episodes of La Nina have started becoming more frequent. All the information has been included in the attached spreadsheet.
Sources
Sources