Summary of Findings

• Italy produced 74.1 million metric tons of hay in 2018, according to the Italian Council for Agricultural Research and Economics (CREA). The production of alfalfa hay alone, the most popular type of hay produced in Italy, totaled 17.7 million tons.

• The top export destinations for hay produced in Italy include the United Arab Emirates, Saudi Arabia, Switzerland, Austria, the United Kingdom, and Japan.

• In 2018, the total market size for hay and forage production in Italy was valued at 1.9 billion euros.

• The county's total export reached 91.1 million euros or 3.6 million metric tons in 2018.

Calculations

• Total monetary value of hay production in 2018 (Italy) = 1.9 billion euros.  

• Total value of hay production in metric tons (Italy) = 74.1 million tons.

• Total monetary value of hay exports in 2018 (Italy) = 91.1 million euros. 

Hay and Forage Production/ Cultivation Data for Italy

• Alfalfa was cultivated on 713,200 ha of land in Italy in 2012.
• Alfalfa covers 47% of the forage area in Italy.
• Globally, alfalfa is grown on approximately 35 million hectares, "leading to an annual output of 47 million tons." This translated to 1.324 tons per hectare (47M/35M) of land.
• Therefore, Italy produces 957,725 tons (1.324*713,200 ha)--almost a million tons--of alfalfa.
• Sainfoin, sweet clover were cultivated on 354,000 ha of land in Italy in 2012. However, clovers and mixtures are not grown in Italy.
• According to Istituto Nazionale di Statista, 2,172 ha of the agricultural area was utilized by rotation forage in 2014.
• Agricultural area of all forage crops, as provided in EPPO's report (2012):
• Green Maize: 273,900 ha
• Lucerne/ Alfalfa: 713,200 ha  
• Sainfoin, sweet clover: 354,000 ha
• Other annual green fodder: 416,500 ha
• Temporary grasses and grazings: 1,123,800 ha 
• Carobs: 8,700 ha 

Research Strategy

Round Bales

•  Peapix reported that farmers in Italy used to manually prepare hay stacks weighing about 68 kilograms (150 pounds) and the process was very tedious. Today, hay stacking is highly mechanized and farmers are able to make round, uniform bales.
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•  DCM Italia reported that Italy's hay farmers can now purchase mini round balers for the production of low weight round bales that weigh about 20-30 kilograms.
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Small Square Bales

•  Gruppo Carli announced that it makes small bales that are packed in recyclable plastic. The small bales which weight about 18 kilograms are made from carefully selected, dust-free dehydrated Italian rye grass.

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•  Siromer is a mini-baler manufacturing firm in Italy and it reported that its baler is easy to operate and it has the capacity to run on rough terrain and in odd-shaped fields. The Siromer baler makes mini round bales weighing about 15-25 kilograms and which are ideal for feeding smaller livestock, such as goats and sheep.
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Large Square Bales

• Information on hay producer, Gruppo Carli's website shows that the company makes Blends bales made from natural meadow hay and tied with iron wire. The bale weighs over 700 kilograms. 
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Pellets

• The Italian firm, SO.PR.E.D., makes dehydrated alfalfa pellets that contain high amounts of pro-vitamin A, vegetable protein, beta carotene, calcium, phosphorus, and magnesium. According to SO.PR.E.D., the pellets provide good nutrition for cows, camels, sheep, and goats.
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•  SO.PR.E.D. also makes wheat straw pellets that are made from top quality chopped and dust-weakened straw that is shredded into 3 to 10 cm pieces. The pellets are good for animal feed and bedding.
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Hay Cubes

•  Gruppo Carli makes Carli Wafer and Carli Wafer plus Cereals cubes that are about 3 cm by 3 cm each. Carli Wafer cubes are made from equal proportions of rye grass and alfalfa and Gruppo Carli avails them in two package sizes: 18 kg bags and 1000kg bags.
• Carli Wafer plus Cereals cubes are made from equal proportions of rye grass and blended with cereals.

 

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Research Strategy

Hay Production in Italy

• According to Researchgate, the Italian government signed a law that obliged farmers to use at least 50% of hay in their livestock's diet.
• Another article published in the Italian Journal of Animal Science noted that hay products constitute over 90% of the diet of animals in the dairy industry.
• The high use of hay in farms is further supported by the fact that over 95% of the produced hay is used in agriculture in Europe.
• According to Mordor Intelligence, the hay production market is highly fragmented. 
• The study in the Italian Journal of Animal Science did, however, note that a part of the hay used in dairy farms is produced locally but the majority of it still comes from commercial players.
• Some of the bigger players in the market include SO.PR.E.D, which produces 80,000 tonnes of hay per year, and Grupo Carli, with their 300,000 tonnes of hay production capacity.

Research Strategy

Dairy Cows

• Dairy Cows: There are 1.875 million dairy cows in Italy. A dairy cow will typically eat around 30-40 lbs of hay per day (or, 10,950 lbs. to 14,600 lbs. per year). This means that among total dairy cows in Italy, about 20.531 billion lbs. to 27.375 billion lbs. are consumed per year (or, 1.875 million x 10,950 and 1.875 million x 14,600). This equates to roughly 9,312,704 to 12,417,091 metric tons.

Beef Cattle

• Beef Cattle: Italy has around 2.85 million beef cows. A beef cow will typically eat somewhere around 20-30 lbs. of hay per day depending on its size and hay moisture (or, 7,300 lbs. to 10,950 lbs. per year). This means that among total beef cattle in Italy, about 20.805 billion to 31.208 billion lbs. of hay are consumed per year (or, 2.85 million x 7,300 and 2.85 million x 10,950). This equates to roughly 9,436,989 to 14,155,710 metric tons.

Equine

• Horses: There are around 369,300 horses in Italy. A horse will typically eat between 15 and 20 lbs. of hay per day (or, 5,475 lbs. to 7,300 lbs. per year). This means that among total horses in Italy, about 2.022 billion to 2.699 billion lbs. of hay are consumed per year (or, 369,300 x 5,475 and 369,300 x 7,300). This equates to roughly 917,163 to 1,224,245 metric tons.

Sheep and Goats

• Sheep: There are 7 million sheep in Italy. Sheep will eat around 1.5 lbs. of hay per day (or, 547.5 lbs. per year). This means that among total sheep in Italy, about 3.833 billion lbs. of hay are consumed per year (or, 7 million x 547.5). This equates to roughly 1,738,619 metric tons.
• Goats: There are 1.05 million goats in Italy. Goats will eat around 2-4 lbs. of hay per day (or, 730 lbs. to 1,460 lbs. per year). This means that among total goats in Italy, about 766.5 million to 1.533 billion lbs. of hay are consumed per year (or, 1.05 million x 730 and 1.05 million x 1,460). This equates to roughly 347,678 to 695,357 metric tons.
• For sheep and goats total, this equates to around 2,086,297 to 2,443,976 metric tons (or, 1,738,619 + 347,678 and 1,738,619 + 695,357).

Pets

• Small mammals as pets (e.g. rabbits, guinea pigs, hamsters, gerbils): There are 1.8 million small mammal pets in Italy. A typical 5 lb. rabbit will eat about 8 lbs. of hay per month (about 0.26 lbs per day, or 4.16 oz). Guinea pigs eat at least 1 oz. of hay per day. Hamsters and gerbils may eat hay, but will typically only consume small amounts at their leisure (overall less than 12 grams of all foods per day, or 0.035 oz). The overall calculated average across these small mammal types is then 1.73 oz. of hay per day (or, 631.45 oz. per year). This means that among small mammal pets in Italy, somewhere in the ballpark of 1.137 billion oz. of hay are consumed per year (or, about 1.8 million x 631.45). In pounds, this equates to about 71,062,500 lbs. This equates to roughly (likely less than) 32,233 metric tons.

Research Strategy

• Some of the parameters that are used to assess the quality of the hay include the following: "relative nutritional value (RFV), digestible energy content (DE), neutral cleansed fiber (NDF), acid cleansed fiber (ADF), water-soluble carbohydrates (WSC), starch and crude protein (CP)."
• The relative nutritional value (RFV) considers the anticipated consumption and digestibility as a measure of the maturity of the hay. When this value goes beyond 100, the quality of the hay is high. If the RFV is below 100, the hay has a lower quality.
• The digestible energy (ED) per gram will reveal the number of calories per gram that the animal will consume from eating the hay.
• The other metrics mentioned are indicators of the quantity of the specific nutrients or beneficial components found in the hay feeds.
• When selling hay, it is expected that the hay is salable and of good quality.  
• When buyers or their representatives personally check the hay and accept the product, the guarantee of quality and salability will be limited to those defects that were not found during the personal inspection. If a contract calls for a certain grade of hay, the supplier should guarantee that the portion of the hay that was not visible during the personal inspection should meet the agreed quality.
• With regard to the basic bargaining unit, it is implied that the hay always shrinks by the quintal (100 kg.) whether it is stored dry on a barn or left in an open field when it is not yet fully mature.
• Hay can be categorized based on the number of times that it has been cut. The first cut from "established and artificial" fields is referred to as the "Maggengo" hay. This type of hay also pertains to those that were cut within the month of May from the meadows. The succeeding cuts of hay are called in Italy as follows: agostano, terzuolo, quartirolo, and quintirolo.
• Tier 1 hay must possess the following characteristics: good appearance, healthy, pleasant smell, right maturity, not too ripe, good leaves, slim, has no contaminants, and did not originate from low quality or harmful grass.
• Hay is sold loose or bounded into bales or round bales. The type of packaging and binding is required to be laid out in the contract. For hay that is bought and weighed before it leaves the area, it is generally accepted that there will be a small reduction in quality due to natural causes. This natural decline gives the following tolerances in favor of the supplier based on the month sold: 30% for the months of June, July, and August; 20% for the months of September and October, and 1% for the other months.
• The relationship between the hay trader and the grower is mandated by regulations as follows: when the supplier is the farmer, the hay must be weighed at the public weighing scale that is selected by the supplier. The buyer must then solely pay for the collection expenses. The seller shoulders the loading expenses.
• Meanwhile, if the buyer is the farmer, the hay will be only be weighed in a public weighing machine chosen by the farmer upon delivery. The seller will shoulder the transport and delivery costs. The farmer will pay for the unloading costs.
• The weight of the hay that is displayed by the public weighing scale is deemed valid if the hay is carried on wagons. If the hay is stored in barns or in silos, the measurement and the estimated weight declared by the land surveyor is considered valid. These terms need to be stated in the contract to prevent disputes. The weighing or measuring costs are paid for by the seller. Usually, the meter is selected as the unit of measure.
• Contract issues usually arise when there are quality issues with the hay such as chemical contamination, too much fermentation, or if the hay appears to be burnt, too wet, or too dusty. There are no tolerance limits permitted with regard to these quality issues.
• Payments for the various steps are usually completed immediately after the delivery was done on the succeeding market day.
• For the mediation process, contract brokers are paid a commission as well.
• There is also a certain contract that have random terms. These agreements usually involve the procurement of all the hay that a certain field will yield in a year or in a given cut. In this case, the buyer will shoulder any losses in whole or in part of the product. If all the yield for the year will be negotiated, the buyer is limited only to do five cuts. Inducing chemical nitrogen fertilization is also not allowed. For the hay in the grass, the expenses associated with "mowing, maturing, and loading" are all shouldered by the buyer. The buyer also needs to pay for irrigation expenses. The seller will pay for the cost of the water.
• For hay fodder, herdsmen typically purchase this for their livestock.
• The sale usually involves a written contract, laid out from August to November for dry fodder and from March to April for green fodder.
• The harvest and transportation expenses of the fodder are shouldered by the farmer. The expenses associated with the cleaning of the stable and the transfer of the manure to the pit are shouldered by the herdsman.
• The contract revolves around the amount of hay or forage straw that will be required by the herdsman for his livestock during the entire duration of his livestock's stay in the stable. The herdsman also pays for the grass beyond a specified stay duration.
• The agreement includes the free use of the designated areas for housing, milk processing, livestock shelter, and the needed beds. The price of the hay incorporates the "enjoyment as pasture of the 5th cut" of the complete field extension given to the herdsman as long as done within an agreed period.
• If the herdsman will stay beyond an agreed date, he will be the one to purchase the grass by the quintals (100 kg.) or by the poles.
• The mowing and transport expenses associated with the "perch-contracted grass" will be shouldered by the farmer.
• Meanwhile, the raking and transport of the grass will be shouldered by the herdsman if the hay farmer takes on the responsibility to clean the stable.
• The weight of the hay stored inside the barn will be estimated by a measurement technician who will be selected by the parties.
• Hay inside barns is weighed regularly and transported by wagon to the farmer's stable. When the grass becomes wet due to the rain, a 10% weight reduction tolerance is given.
• The weight of the hay is usually estimated around November as this is when the last cut of the hay has completed the fermentation process. The seller pays for the measuring technician's fees.

Hay Market — Italy

• Italy is the fifth-biggest exporter of hay in the world based on data from 2017; hay export from Italy represented 3% of all global hay exports in 2017.
• According to a report by Mordor Intelligence, the Italian alfalfa hay market is expected to experience a cumulative annual growth rate of 2.3% between 2020 and 2025. The same report notes that some of the primary drivers of the market include the rising demand for dairy and meat products, as well as the increasing need to improve the quality of animal feed.
• The alfalfa hay market in Italy is highly fragmented, which means it is highly competitive without dominant market players. That said, companies that can be considered major include Gruppo Carli, Bagioni Group, Alfalfa Monegros SL, and Anderson Hay & Grain Inc.

Research Strategy

Strengths

• Italy is one of the largest hay exporters in the world. In 2017, its exports accounted for 3% of the global hay exports.
• Thanks to the country's landscape, Italy can produce hay from Alfalfa, Clovers, Loiessa, Corn, and other plants.
• The Italian hay market has continuously grown in the last years, and it is expected to grow more until 2025, especially the alfalfa hay market, which is the one that Italy produces the most.
•  Gruppo Carli, one of Italy's largest hay producers, is one of the leaders in the global market.

Weaknesses

• The production of hay requires large amounts of water resources and land, which limits its production in certain regions, as it requires favorable weather, irrigated water access, and dry climate during some months of the year.
• The USA and China are currently leading in biotech-developed alfalfa varieties, increasing their production and domain over the global market.

Opportunities

• The country is quickly increasing its reach in the EMEA and Asian markets, mainly in the UAE, Saudi Arabia, Japan, and China.
• Along with the rest of hay producers, Italy can take advantage of the growing hay needs to feed livestock around the world, as it is expected that the alfalfa hay global market will grow to $29,500 million by 2025 at a CAGR of 0.1%.
• The Italian hay market is expected to grow faster than the global market at a CAGR of 2.3% between 2020 and 2025.
• The Italian hay market is currently dominated by four major competitors: Group Carli, Bagioni Group, Alfalfa Monegros SL, and Anderson Hay & Grain Inc., leaving an open door for more companies who want to enter the industry.
• The production of hay in Germany has been affected by drought, which has increased its prices, presenting an opportunity for other producers, like Italy.
• While the competitors are relying on modified alfalfa hay, Italy can take advantage of the non-GMO movements of the quality of its hay.

Threats

• The large demand for hay exports has drawn attention from environmental activist as it requires a lot of water resources and land for its domestic production. They complain that the country's water is being exported through the hay exports.
• Its largest competitors are the global market leaders of hay exports, the USA with 58% of the market, Australia with 14%, Spain with 10%, and Canada with 4%.