Hay Market Research: Argentina, Part 1 (A)
We have updated the required data in row 3, columns C-G of the attached spreadsheet. Below is a summary of our findings and the triangulation used to compute the data.
- In 2017, Argentina exported 54,423 metric tons of Alfalfa hay, more than double the volume of 23,406 metric tons exported in 2016. The same represented only 0.7% of the global Alfalfa hay market, which reached around 8.3 million metric tons in 2017.
- The most important destinations to which Argentina exports its Alfalfa hay include the United Arab Emirates (UAE) and Saudi Arabia (SA). Other destinations that have a relatively much lesser share in exports include Jordan and China. Chinese exports started recently in 2016.
Hay Production & Yield/Harvest
- In 2017, there were around 850,000 hectares of Alfalfa grown for hay extraction in Argentina. Using the hectare-acre converter, the same aggregates to ~2,100,396 acres (rounded off to the nearest integer).
- The average Alfalfa yield/harvest varies greatly according to soil and climatic conditions, management practices, and moisture availability (rainfall or irrigation). As per data from The National Institute of Agricultural Technology (INTA) in Argentina, for rain-fed operations, the average yield can vary from 4-6 tons (average 5 tons) DM/hectare/year under 3-5 cut systems to 18 tons DM/hectare/year under 7-8 cut systems. Thus, the average Alfalfa yield across different cut systems for rain-fed operations can be computed as 11.5 tons DM/hectare/year. [(18+5)/2]
- Under irrigation, yields can range from 10-12 tons (average 11 tons) DM/hectare/year in 4-5 cut systems to 16-18 tons (average 17 tons) DM/hectare/year in 8-9 cut systems. Thus, the average Alfalfa yield across different cut systems for irrigation operations can be computed as 14 tons DM/hectare/year. [(11+17)/2)]
- As per the National Alfalfa & Forage Alliance website, "approximately 80% of the total Alfalfa area in Argentina 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."
- Using the above-mentioned percentages, we can estimate that out of 850,000 hectares of Alfalfa grown for hay extraction in Argentina in 2017, 680,000 hectares (850000*80/100) were grown under rain-fed conditions, and the remaining 170,000 hectares (850000*20/100) were devoted to hay production under irrigation. Using the average yield numbers mentioned above, the total hay production under rain-fed conditions aggregates to 7,820,000 tons. (680,000*11.5) and that under irrigation amounts to 2,380,000 tons (170000*14). Hence, total annual hay production under both conditions and different cut systems aggregates to 10,200,000 tons. (7,820,000+2,380,000)
- Using tons to metric tons converter, the above number translates into 9,253,284 metric tons (rounded off to the nearest integer) or 9.25 million metric tons.
- Since the pre-compiled market value of hay production in Argentina was not available in the public domain, we have used the export price of hay in Argentina to compute an approximate value.
- According to the World Alfalfa Congress literature, the average export price per ton for hay in Argentina in the first semester of 2018 was USD 342. Hence, the total export market value of 10.2 million tons can be calculated as USD 3,488.4 million (10.2*342). Using the USD-Argentine Peso (ARS) exchange rate of 1 USD= 20.11 ARS from March 31, 2018, the total export market value computes to ARS 70,151.7 million (3488.4*20.11).
We tried to find the pre-compiled values for the required data by scouring through various regulatory and government databases such as INTA, FAO, USDA, OECD, etc., and research publications and studies from Science Direct, Research Gate, Academia.org, McKinsey, and Deloitte, among others. We also searched through media articles from Forbes, WSJ, Bloomberg, Reuters, Businesswire, etc., but no relevant data could be garnered. However, during our research, we were able to find pertinent data points related to hay production in Argentina, which we have leveraged to triangulate the amount and value of hay production in Argentina. Kindly note that all the data found was related to the Alfalfa hay as it is the most prominent and largest produced hay variety in Argentina. Hence, we have used the same and assumed that the numbers for Alfalfa hay closely represent the overall hay production data in Argentina. Also, we have corrected the data entered in the attached spreadsheet in the last iteration to reflect the updated numbers computed above.