Hay Market Research: Brazil

Delivered October 1st, 2020. Contributors: Varun N., Hillary O., Alexander B., Methody G., Vikrant J., Sheila L., Kennedy H., Barry and

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Hay Market Research: Brazil, Part 1

There is little data available on hay production in Brazil. Alfalfa hay is grown on 40,000 ha of land in Brazil versus 3.7 million ha in Argentina. The available statistics on Brazil's hay market has been populated in the attached spreadsheet. 
Brazil's Hay Production and Exports"In Brazil, even with great comparative advantages compared to other countries, such as favorable climate, availability of arable land, qualified human resources and new emerging markets, little is known about market statistics (of hay production), but it is believed to be practically null."
"Alfalfa plantations span only 40,000 hectares, primarily in the southern states of Rio Grande do Sul and Paraná, which is not enough to meet domestic demand. Vast amounts of alfalfa seeds get imported to Brazil from California, USA and Argentina"
Alfalfa crops are harvested eight to ten times per year. They can potentially yield "20 to 25 tons of dry matter per hectare each year."
Brazil exports 145.2 tons of "forage products including swedes, mangolds, fodder roots, hay, sainfoin, clover, forage kale, lupines, vetches etc., pelletized or otherwise."
Top countries that Brazil exported "forage products including swedes, mangolds, fodder roots, hay, sainfoin, clover, forage kale, lupines, vetches etc., pelletized or otherwise" in 2018 were Turkey, Lebanon, Uruguay, Egypt, Iraq, and Norway.
Brazil has a total of 1,637,459,361 livestock animals.
Research StrategyWe searched the Instituto Brasileiro de Geografia e Estatistica, the 2017 Census of Agriculture reports and tables, Brazilian Agricultural Research Corporation (Embrapa), the Food and Agricultural Organization, USDA, World Bank, economic databases (Trading Economics), research reports, dairy farming related websites, Brazil-Arab News Agency (ANBA), global animal feed resource databases (feedipedia), World Alfalfa Congress, Agri Links, and media sources for the hay production data in Brazil. However, it was not available in any of the aforementioned sources. The Census of Agriculture reports data for grain forage, cutting forage, cane forage, corn forage, palm forage, and fodder seeds but it does not publish any data for hay. A research report on the forage seed market we came across suggests--only on the basis that it finds mention and other types do not--that Alfalfa is the primary hay type used in Brazil, even though it is produced in low quantities; Alfalfa is grown on nearly 3.7 million ha in Argentina versus 40,000 ha in Brazil. There was also a source that indicated that "little is known" about the hay market in Brazil. Our findings largely suggest that hay is not as widely used as feed for livestock in Brazil in comparison to other countries.

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Hay Market Research: Brazil, Part 2

Brazil produces 40,000 hectares of Alfalfa. Data on the country's production of bentgrass, bermudagrass, fescue grass, kliengrass, meadow/pasture hay, oaten grass, timothy grass, clover, and the other crops specified could not be found or deduced. In the absence of this data, information on how some of these crops are sown has been provided in the attached spreadsheet.
RESEARCH HIGHLIGHTSIn Brazil, ryegrass is sown from March to May every year or ever two years, About 20 to 30 kg of ryegrass seed per hectare is sown. This grass is sown by haul or in rows, typically not deeper than 1cm. Grazing begins when the plants get to around 20cm in height and ends when they are about 5cm to 10cm in height.
There are several types of clovers in Brazil: white clover, persian clover, red clover, and vesicular clover. The most common one used in Brazil is white clover. 
While all clovers have high nutritional quality, they are not used alone. They have to be used with oats and ryegrass. White clovers typically tolerate moisture and require intense grazing. They are maintained through natural reseeding and sown from April to June. Up to 2 kg of seed is used per hectare. Grazing typically begins when the plants are "20 to 30 cm tall, leaving a residue of 7 to 10 cm."
Sudangrass is known as a rustic and productive species in Brazil. It is "more tolerant to drought, but less tolerant to humid soils." In South Brazil, it is typically sown from September and "will produce until the frosts start, the following autumn." The sowing density tends to be 25kg per hectare. It is planted in rows and the smallest spacing is used - spacing from 17cm to 45cm is typically the norm. The first grazing tends to be done when the plants get to 50cm, leaving residue around 5cm. Sudangrass is most appropriate for use in rotational grazing in Brazil. 
In Brazil, only 40,000 hectares of Alfalfa, out of a total of 4.5 million hectares in Latin America, is produced. 
RESEARCH STRATEGYIn order to locate or calculate the total hay produced by crops like Alfafa, bentgrass, and clovers in metric tons, we first consulted government resources, such as the website of the Ministry of Agriculture in the country. While articles provided by this website were PDF files in Portuguese - which means the entire files could not be translated, we were able to manually translate data specific to hay. This helped in finding the total alfalfa produced in the country. However, production data for other crops, including bentgrass, bermudagrass, fescue grass, kliengrass, and orchardgrass, was not provided. 

Our next step involved scouring agriculture journals in Brazil or South America in general. We came across reports by Agencia de Noticias Brasil. These reports provided an overview of grass production in Brazil, but there was nothing specific to bentgrass, bermudagrass, fescue grass, kliengrass, meadow/pasture hay, oaten grass, timothy grass, clover, and the other crops mentioned in the spreadsheet. 

Next, we attempted expanding our scope to trusted databases that offer data on the production of different agriculture products by country. Through this, we encountered OEC World. Although this resource offered the production value of forage crops in Brazil, there was no data on the crops used to make hay specified in the spreadsheet; moreover, the data provided was expressed in dollars not in tonnes. 

Being that there was no readily available data from credible resources, the research team elected to identify and explore the total number of acres or hectares used to grow the specified crops. We encountered reports by the Brazilian Agricultural Research Corporation (Embrapa Brasil) that described how a few of the crops - clover, ryegrass, and sudangrass - are sown in Brazil. This information has been provided in the spreadsheet. 

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Hay Market Research: Brazil, Part 3

There is a strong worldwide demand for forages, as it is considered the best feed for livestock. Brazilian alfalfa holds great promise for increasing output for supplying the domestic market, but it is not widely grown in Brazil, with most of it coming from family farmers. According to the USDA, soybean production will increase to 133 million metric tons in 2020/2021.
Market OverviewThe leading countries that produce alfalfa are the United States, European Union, Argentina, Russia, Canada, and Australia, with 32 million hectares. 
Alfalfa spans over 4 million hectares in Latin America — 4 million in Argentina, 170,000 in Chile, 120,000 in Peru, 70,000 in Uruguay, and 40,000 hectares in Brazil.
 Matopiba is the acronym for the junction of four Brazilian Cerrado states — Maranhão, Tocantins, Paul, and Bahia, where the bulk of Brazil's grains and fibers come from. 
According to the USDA, soybean production will increase to 133 million metric tons in 2020/2021.
Granboi Distribuidora de Carnes produces 10,000 metric tons per month of alfalfa hay bales.
Research strategyWe searched through multiple industry reports, white papers, and government reports to find any quantitative forecasts for Brazil's haymarket. However, we were not able to find any information about the type of hay form. The majority of the reports focused on the overall hay or alfalfa market, with little information about the quantity of hay form produced in the country. We also tried to go through some of the major hay producers in the country but information was also scarce. We were able to find that Granboi Distribuidora de Carnes produces 10,000 metric tons per month of alfalfa hay bales but the rest of the information from the different companies mainly focused on describing the different bale types and their offerings rather than discussing how much they produced.

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Hay Market Research: Brazil, Part 4

The majority of hay is produced and used for the country's local beef and diary markets due to its high nutritional value. The market itself is still relatively fragmented but a few larger companies have a dominance over the competition. All the information has been included in the attached spreadsheet. 
NotesThe majority of hay is produced and used for the country's local beef and diary markets due to its high nutritional value. 
According to a recent report by the ANBA, the Brazilian hay market does not produce enough to support the domestic need for its diary and beef industries.
According to a 2014 study, 82.7% of diary farmers use corn in combination with other forage products, while another 6.5% use specialized crops like reygrass, oats, and barley to feed their livestock.
The Brazilian forage market is relatively fragmented but several major players dominate the market.
Research StrategyWe focused our research on industry reports and government databases but information about the specific breakdown for the use of hay products and the production type was not readily available. We did try to estimate how much of the hay production was used by local farmers but we could not find any numerical data to help us determine that. We did find a report by ANBA that stated that the local hay production could not sustain the demand produced by the Brazilian diary and beef markets but we could not find any additional data to support that claim. We also found from Mordor Intelligence that the forage market is still fairly fragmented but a few larger players still dominate the market in terms of market share.

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Hay Market Research: Brazil, Part 5

Based on the calculations outlined below, dairy cows consume an estimated 79.4 million metric tons of hay per year, while beef cattle consume about 876.4 million metric tons of hay per year. Requested details for the hay market in Brazil have been provided in row 5, column AM-AQ, of the attached spreadsheet.

Dairy Cows
There are about 20,000,000 dairy cows in Brazil. A dairy cow will typically eat around 24 lbs of hay per day. This means that among total dairy cows in Brazil, an estimated 48,000,000 pounds (20,000,000 x 24) of hay is consumed per day. Using the pound to metric ton conversion calculator, an estimated 217,724.3 metric tons of hay is consumed per day. This equates to an estimated 79,469,369.5 metric tons (217,724.3 x 365) of hay is consumed by cows per year in Brazil.
Beef
There are about 211,764,292 beef cattle in Brazil. Beef cattle will typically eat around 20-30 lbs of hay per day. This means that among the total beef cattle in Brazil, an estimated 5,294,107,300 pounds (211,764,292 x 25) of hay is consumed per day. Using the pound to metric ton conversion calculator, an estimated 2,401,366.7 metric tons of hay is consumed per day. This equates to an estimated 876,498,834.6 metric tons (2,401,366.7 x 365) of hay is consumed by beef per year in Brazil.
Equine
There are about 5,000,000 horses in Brazil. A horse will typically eat around 15-20 lbs of hay per day. This means that among total horses in Brazil, an estimated 87,500,000 pounds (5,000,000 x 17.5) of hay is consumed per day. Using the pound to metric ton conversion calculator, an estimated 39,689.3 metric tons of hay is consumed per day. This equates to roughly 14,486,594.5 metric tons (36,689.3 x 365) of hay is consumed by Equine per year in Brazil.
Sheep and Goats
There are about 10,000,000 goats in Brazil. A goat will typically eat around 2-4 lbs of hay per day. This means that among total goats in Brazil, an estimated 30,000,000 pounds (10,000,000 x 3) of hay is consumed per day. Using the pound to metric ton conversion calculator, an estimated 13,607.7 metric tons of hay is consumed per day. This equates to an estimated 4,966,810.5 metric tons (13,607.7x 365) of hay is consumed by goats per year in Brazil.
There are about 17,400,000 sheep in Brazil. A sheep will typically eat around 1.5 lbs of hay per day. This means that among total sheep in Brazil, an estimated 26,100,000 pounds (17,400,000 x 1.5) of hay is consumed per day. Using the pound to metric ton conversion calculator, an estimated 11,838.7metric tons of hay is consumed per day. This equates to an estimated 4,321,125.5 metric tons (11,838.7x 365) of hay is consumed by sheep per year in Brazil.
For sheep and goats the total hay consumption per year equates to an estimated 9,287,936.0 metric tons (4,966,810.5 + 4,321,125.5) of hay consumption per year.

Research Strategy
Our research team began by scouring through the public domain for any data provided by market research and industry-specific reports. We also searched for any reports or statistics released by government resources such as the Brazilian Center of Agrarian Sciences, Brazilian farmers, as well as relevant government authorities, including the Ministry of Agriculture. Additionally, we looked for any reports produced by international bodies such as the Food and Agriculture Organization (FAO), among others. However, there was no specific information available on hay consumption by different animal species in Brazil.

Having found no readily available statistics, the research team decided to triangulate the required information. The research team did this by finding the number of dairy cows, beef cattle, horses, goats, and sheep, then multiplying by the amount of hay consumed by each animal species. Unfortunately, we had to use some figures/data from articles because we could not locate information on hay consumption levels from government or market research sources. Also, we could not find data specific to the hay consumption by animals in Brazil. Notably, even among the same animal species, the amount of hay consumed per animal varies based on factors such as health, size, and weather conditions. Economic factors would also impact the amount of hay fed to the animals. Since it was not possible to take all of these variables into account, the above figures should be treated as estimated figures.

Furthermore, we determined that 'pet' is a subjective term, and it is based on the owner's relationship with the animal. This means that any number of animals, including cows and goats, would be considered pets. However, we tried to triangulate by finding the number of pets animals in Brazil, but due to lack of data, the calculations were not possible.

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Hay Market Research: Brazil, Part 6

Alfalfa hay in Southern Brazil is mostly sold to dairy cattle farms and horse farms. The value of alfalfa hay is defined in terms of its protein content. We have provided these and other findings about the hay market in Brazil in row 5, columns AS to AV of the attached spreadsheet.  
Summary of FindingsIn Southern Brazil, alfalfa hay is primarily sold to dairy cattle farms and horse farms. 
In Brazil, the value of alfalfa hay is defined in terms of its protein content. It is rich in protein and has a higher protein quality than grasses. It is also the cheapest protein for feeding herds.
After the alfalfa hay is grown, it is typically processed and sold as pellets, bundles and chaffs, as well as in ground form. 

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Hay Market Research: Brazil, Part 7

Introduction & Research StrategyThe market for hay in Brazil is a relatively fragmented but developed industry that has much room for growth. Based on sources located from organizations including the Brazilian Center of Agrarian Sciences and the ArabBrazilian Chamber of Commerce, we were able to locate data that provides a high-level overview of this industry and its potential for future growth. While hard data and statistics were hard to come by without accessing paid research reports, we were able to locate data that indicated the relative land area of hay farms in Brazil, the typical production time frames, use cases, and manufacturing methods. This information has been detailed in row 5, column AW of the attached spreadsheet. All sources used to compile this overview are listed in row 5, column AX in footnote format. Below is a brief overview of these same findings.

Brazil Hay Market Alfalfa hay is the primary variety of hay that is produced by farmers in Brazil. Much of the hay produced in Brazil is exported to buyers in the Middle East, including Saudi Arabia, the UAE, and Egypt, among others. 
There are approximately 40,000 hectares (~100,000 acres) of alfalfa farms throughout Brazil, most of which are located in the southern regions. 
Many producers of alfalfa hay in Brazil, especially those in the northern regions, must conserve their stocks for dry seasons, during which it is more difficult to farm hay as a result of rainfall and humidity.
 Major use cases for hay in the Brazilian market include livestock feeding, exports, and even cosmetics. 
Please review row 5, column AW of the attached spreadsheet for more detailed information on this topic. 

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Hay Market Research: Brazil, Part 8

A SWOT analysis of the Brazilian hay market has been provided on column AY, row 5 of the attached spreadsheet.
Highlights From the AnalysisSTRENGTHSBrazil is the fourth-largest producer of alfalfa in Latin America with about 40,000 hectares of alfalfa plantations behind Argentina, Chile, Peru, and Uruguay.
Brazil’s Cerrado and semiarid areas have the machinery and irrigation services, as well as the necessary export infrastructure to commercialize the production of alfalfa.
WEAKNESSESDespite being considered the best forage plant for dairy cattle, alfalfa it is not widely grown in Brazil.
Alfalfa plantation in Brazil is primarily in the southern states of Rio Grande do Sul and Paraná and covers about 40,000 hectares compared to large producers such as Argentina with over 4 million hectares.
OPPORTUNITIESRising demand for forage plants in the world presents an opportunity for farmers in Brazil to export hays to major importers such as Saudi Arabia, UAE, and China if the output can be increased with the availability of types of machinery and irrigation in Brazil’s Cerrado and semiarid areas.
With the application of alfalfa going beyond the dairy farm, there is an opportunity for Brazil to explore other opportunities in the agroindustry such as cosmetics and pharmaceuticals. 
THREATSWith only about 40,000 hectares of alfalfa plantations in Brazil, this is mostly farmed by family farmers, the hay market in Brazil is not enough to meet domestic demand.
Major producers such as California, USA, Russia, Australia, and Argentina pose a significant threat to any possible export opportunity for alfalfa hays to other countries.

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Sources

From Part 01

Feno: um mercado ainda pouco explorado no Brasil | MilkPoint

milkpoint.com.br

Quotes

"Argentina, which ranks 9th in terms of hay trade volume, already exports US $ 13.3 million. In Brazil, even with great comparative advantages compared to other countries, such as favorable climate, availability of arable land, qualified human resources and new emerging markets, little is known about market statistics, but it is believed to be practically null."

Brazil - Cereal Production (metric Tons) - 1961-2017 Data | 2020 Forecast

tradingeconomics.com

Alfalfa in demand on international markets

anba.com.br

Publication Year: 2020

Quotes

"Considered the best forage plant for dairy cattle and horses, and used as feed for sheep, goats, rodents and even pets and humans, alfalfa is not widely grown in Brazil, with most of it coming from family farmers."
"The biggest alfalfa producing country in Latin America is Argentina, with some 4 million hectares farmed. In Brazil, alfalfa plantations span only 40,000 hectares, primarily in the southern states of Rio Grande do Sul and Paraná. This is not yet enough to meet domestic demand."
"Duarte Vilela, an agronomist and researcher with Embrapa Dairy Cattle, told ANBA that vast amounts of alfalfa seeds get imported to Brazil from California, USA and Argentina"
"Alfalfa is considered the best of all forage plants, with 18% to 26% crude protein content, nitrogen-fixing capabilities, low seasonality, eight to ten harvests per year, and a potential for 20 to 25 tons of dry matter per hectare each year."