Hay Market Research: Mexico

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Part
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Hay Market Research: Mexico, Part 1


Mexico exports hay to the United States of America. The US imported $11.14 million from Mexico from July last year to July 2020. Data on the total amount of hay produced, its market value and the amount of hay exported annually (in metric tons) from Mexico were unavailable. N/A was therefore inserted in Row 12, column C — E of the attached spreadsheet.

Summary

  • The total export value of Mexico's forage products cumulatively, including hay as of 2018, stood at the $17. 78 million.
  • The United States is considered Mexico's principal agricultural partner. It has primarily remained the country's market for agricultural produce this largely because of geographical advantage.
  • According to a report, Mexico became the second-largest importer of hay through July of this year, Canada led the list. Mexico was also the second importer of Hay to the US in the previous year.
  • It's estimated that US imports from Mexico increased by 13.79%, which is roughly $1.35 million.
  • The ministry of environment in Mexico is against the extraction of Hay in Mexico. According to the ministry, hay extraction contributes to environmental destruction as hay protects the soil against soil erosion and acts as animal protectors.

Research Strategy

The research team was unable to find most of the relevant data regarding the hay market in Mexico. Our first attempt was to source information from the ministry of agriculture in Mexico, The secretariat of Agriculture and Rural Development. We hoped to find published information regarding the country's hay market as it was directly related to the agriculture ministry. However, we were unable to find information that was relevant regarding the market.
As a second strategy, we decided to expand our scope and focus on countries that imported hay from Mexico. The team thought this would be a prudent idea because the importing countries usually publish information regarding the country's total hay produced alongside what they imported from the market and any other relevant data regarding the Mexico hay market. The second strategy proved to be silently useful as we made use of it to compile useful information. This strategy revealed that the US was the largest importer of agricultural produce, hay to be specific from Mexico. According to US Trade Numbers, Mexico was the second leading exporter of hay in the USA for the past two years. We were, however, unable to find the exact data regarding the hay market in Mexico.
Our last strategy employed language translation tools to gain access to articles, news articles, and reports published in Spanish (Mexico's national language). We opted to find information regarding the hay market in Mexico. We came across an article that stated that the ministry of Environment in Mexico was against hay extraction in the country. The ministry initiated campaigns to its citizens to stop buying hay as it promoted environmental destruction. According to the ministry, hay extraction led to environmental destruction, promoting soil erosion, and promoting animal harm. This article proved why little data or no data was publicly available regarding the hay market in Mexico. The team concluded that this was partly the reason data on hay production in Mexico was limited.

Part
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Part
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Hay Market Research: Mexico, Part 2

Mexico produces 10.7 million tons of alfalfa hay. The available production information on different hay types in Mexico can be found populated in columns J-W of row 12 of the attached spreadsheet.

Findings

  • "Alfalfa is the main forage crop in Mexico in terms of area planted with 583,561 ha, which represents 57.1%, while the forage crops corn, oats, and sorghum represent 42.9%."
  • 10.7 million tons of alfalfa hay is produced in Mexico annually.
  • Sonora, a state in northern Mexico, has a "large base of irrigated ryegrass for backgrounding cattle in the dry winter period."
  • In 2016-17, Mexico imported 4 million lbs. of annual ryegrass seeds and 4.4 million lbs. of sudangrass seeds from the US.
  • Pastures and meadows are spread over approximately 80 million ha of land in Mexico, roughly 10-15% of the harvested land.

Research Strategy

The last Agricultural Census in Mexico was conducted in 2007. As the Agricultural Census was outdated per the defined criteria, we searched research reports and industry portals to obtain the required information. While there is no data available on the quantity of alfalfa hay produced, we found the harvested area for alfalfa. Production statistics for other hay types were not publicly available; however, we were able to identify the more widely used types of hay in Mexico based on qualitative data.

Calculations for the quantity of alfalfa hay produced:

The average yield per hectare of alfalfa hay in Mexico = 18.3 tons/ ha
Therefore, the amount of hay produced in Mexico = 10,679,166 tons (18.3 tons/ ha * 583,561 ha)


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Part
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Hay Market Research: Mexico Part 3

Despite several hours of exhaustive research done through various credible sources, we were not able to find specific details on the breakdown of the various types of hay forms as portions of the total hay market in Mexico. Based on global data, bales are the most typical form of this product. Also, an Alfalfa harvest report from the agricultural department of Mexico shows a picture of a large bale as part of the harvest in the area. The lack of available data points and some helpful findings on the various types of hay forms being sold by Mexico were presented in the section below and reflected in the shared spreadsheet, row 12, and columns Y to AE.

The following are some of the helpful findings available that pertain to the various formats of hay products that are being sold globally and in Mexico.
  • According to the report from GM Insights, the various product formats of Alfalfa hay include bales, pellets, and cubes.
  • Bales are the most typical format of this product. This format can come in "two-string bales, three-string bales, and up to six-string bales weighing up to half-a-ton." These bales can also be configured as square bales that weigh around 25 to 35 kg.
  • The product can also be presented as round bales with a diameter ranging from 1.4 to 1.8 meters, and with a weight range of 100 to 500 kg.
  • The product is typically ordered in bales than pellets as the former has more size and weight options. Bales are also more convenient to transport.
  • Haylage is also a preferred format for dairy cows as it is more flavorful and can maintain its nutrient levels for a long time. Haylage is composed of finely chopped and fermented Alfalfa.
  • Meanwhile, a harvest report from the Agriculture Department of Mexico features a picture of a large Alfalfa hay bale.
  • The Mexicali Valley in Mexico was able to harvest 536,838 tons of Alfalfa in the area.
  • Between 7 and 8 crop cuts were done to harvest the Alfalfa.
  • Meanwhile, a vendor sourcing from the Mexico region reported that they bale the Alfalfa hay that they harvest into" 3-tie bales or big bales."
  • Their bale sizes range from "small to large, and bale weights include 30 kg., 60 kg., 120 kg., and 450 kg. " These sizes make it easier to optimize the loading into sea containers to minimize costs.

Research Strategy

To determine how much of the hay produced in Mexico becomes large bales, small bales, round bales, pellets, wrapped, and other forms, we looked through various relevant government and global sites such as FAO, USDA, Gobierno de Mexico, U.S. Trade, WTO, Comtrade, Trademap, Intracen, and other similar sources. Based on this search approach, we were not able to find the breakdown of the quantity of the various types of hay products. What we found were general statistics on the hay and Alfalfa harvests in Mexico.
We then looked through various market reports such as those from Mordor Intelligence, GM Insights, Market Watch, and other similar sources. While we found several insights on the various forms of the hay products that are being sold in the market on some of the reports, the information is global in nature and is not specific to Mexico.
We also searched through various studies and research journals such as those from Scielo, Science Direct, various university studies, and other similar sources. However, most of the insights found on the hay format types in these reports are general concepts. We were not able to find quantitative data that we can use to triangulate the requested information.

We also checked trade databases such as Go4World Business and the websites of several hay vendors operating in Mexico such as Guadalupe Victoria, Campo Parson, BYSA Company, The Gombos Company, and other traders. We hoped to determine if these vendors have indicated any information on the breakdown of the format of the hay products that they are selling. While several vendors stated the various forms of the hay products that they are selling, we still did not find any specific breakdown on the quantity of each hay product form.
We then compiled all the relevant information we found above and presented them as helpful findings.
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Part
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Hay Market Research: Mexico, Part 4

The majority of hay is produced and used for the country's dairy markets due to its high nutritional value. Mexico is the second-largest importer of hay in the United States; the majority of the hay is produced by commercial companies. All the information has been included in the attached spreadsheet.

Helpful Findings

  • The majority of hay is produced and used for the country's dairy industry while significant quantities are sold.
  • Mexico is the second-highest exporter of hay to the United States. From January to July 2020, Mexico exported hay valued at about $11.14 million to the United States increasing Mexico's hay export to about 14%.
  • According to research published by Elsevier, small-scale dairy enterprises contribute 35-40% towards hay production.
  • The majority of the hay is produced by commercial companies that collect the hay product from local farmers. About 60-65% of the hay production is done by Alfalfa Hay, Humberto Ramos, MGM, Santa Lucia, and others. However, Grupo Corrales Sonora is the sole supplier of Timothy hay in Mexico.

Research Strategy

To locate the percentage of hay produced used in the farm and sold for other uses and how much of the hay produced is made by small-scale farmers and commercial producers, we began by combing government websites like the International Trade Administration and the USTradeNumber. While we were able to locate hay market export information, there was no information regarding the percentage of hay used in farms and sold for other uses. Our research team went further to research the Mexico hay festival official website hoping to locate press releases and news that referenced the breakdown of how much hay produced is used by farms and sold for other uses. Unfortunately, we were unable to locate relevant information. We only located highlight of passed events, Nobel Prize awards, and others using this strategy.

Next, we continue to research press releases, market reports, and industry reports like go4WorldBusiness, Mexico News Daily, WFMJ reports, for information regarding the percentage of hay produced used in the farm and sold for other uses and how much of the hay produced is made by small-scale farmers and commercial producers. This strategy was not successful as information found only referenced Mexico as an exporter of hay and some commercial manufactures and suppliers. Unfortunately, there was no information regarding the percentage of hay used in farms and sold for other uses.

Our final research method was to scoured academic publications from credible journals like Researchgate and Elsevier. While we were able to locate relevant information regarding hay used by farm and sold for other uses, but information about the specific breakdown for the use of hay products and the product 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. After extensive research, our research team concluded that numerical data was not publicly available.

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Part
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Hay Market Research: Mexico, Part 5

Dairy cows in Mexico consume about 70 million to 87.5 million pounds of hay daily, while beef cattle consume approximately 110.52 million pounds daily. The statistics of hay consumption by animal species in Mexico have been entered in columns AM-AQ of the attached spreadsheet.

Findings

Dairy Cows

  • According to Index Mundi, the total number of dairy cattle in Mexico in 2020 is 3,500,000. The typical weight of a dairy cow is about 1000 lbs.
  • As a rule of thumb, a dairy cow will eat "2 to 2.5 pounds of hay per day for every 100 pounds of body weight."
  • Calculations;
    • A dairy cow eats between (1000x2)/100 to (1000x2.5)/100= 20 pounds to 25 pounds of hay daily.
    • Total daily consumption of hay in Mexico would then be = (3,500,000x20) to (3,500,000x25)= 70,000,000 pounds to 87,500,000 pounds.

Beef

  • According to Index Mundi, the total number of cattle in Mexico in 2020 is 8,105,000.
  • Calculations;
    • The total number of beef cattle would be =8,105,000-3,500,000= 4,605,000
    • A typical beef cow would consume about 24 pounds of hay per day.
    • Therefore, total daily hay consumption is =(24x4,605,000)=110,520,000 pounds.

Research Strategy

After an exhaustive search, we found limited information that directly addresses hay consumption by animal species in Mexico. However, we got some useful data that helped us estimate the amount of hay consumed by dairy cows and beef cattle, which we have provided in our findings above. We could not determine hay consumption statistics by equine, sheep and goats, and pets due to limited information.

We exhaustively searched through relevant industry databases and reports like CEIC, USDA Foreign Agricultural Service, Cogent Food & Agriculture, and Food and Agriculture Organization of the United Nations. However, we found no information related to hay consumption by animal species in Mexico. We also searched through the Mexican hay festival and Mexico's Ministry of Agriculture websites to no avail.

Lastly, we decided to search for sources that would aid us in triangulating the requested information. We were able to locate relevant data from Index Mundi, which provided the 2020 population of cattle in Mexico. We also found publications that provided the standard consumption level of hay by dairy cows and beef cattle. We then used the available data to provide estimates of daily consumption of hay by beef and dairy cows, as shown in our calculations above.
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Part
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Hay Market Research: Mexico, Part 6

Research Methodology:

During five hours of exhaustive research, we could not identify government websites, or scientific publications citing information regarding the hay agriculture, market size, import and export statistics, companies and industries involved, methods for value assessment, and the sale process. This is largely due to a lack of transparency at the agricultural ministry level. Though, related information (statistics) regarding animal feed, in general, is mentioned below.

Facts & Statistics related to Hay Agriculture in Mexico:





Part
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Part
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Hay Market Research: Mexico, Part 7

An overview of the hay market in Mexico can be found in row 12, columns AW-AX of the attached spreadsheet. In the first half of 2020, Mexico exported hay valued at about $11 million to the United States. The top-rated alfalfa hay suppliers and manufacturers in Mexico include Neal Farm Services, Bojormex, and Maqui Agro.
Part
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Part
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Hay Market Research: Mexico, Part 8

Strengths, weaknesses, opportunities, and threats for the Mexico hay industry have been presented in the attached spreadsheet. Mexico is among the top exporters of forage in the world although it faces competition from other neighboring hay exporters such as Canada and the United States

Strengths

  • Mexico was among the top 20 exporters of forage in the world in 2018. It exported about $17,778,765 worth of forage. It has a global market share of 0.62%.
  • According to the US Trade Numbers, Mexico is the second-highest exporter of hay to the United States. Mexico exported hay valued at $11 million between the months of January and July 2020.

Weakness

  • According to Scielo, the main forage crop in the country is alfalfa. Given its "high water demand, alfalfa may be replaced by other crops with lower water requirements."
  • The production of hay in Mexico faces competition for water and land from crop production for other uses.
  • According to the Mexicanist, insecurity in Mexico is negatively impacting animal feed producers. Areas such as Mexico City and Puebla have high cases of crime. Some producers have halted operations in these areas.

Opportunities

  • Mexican farmers can take advantage of the increasing global demand for forage plants and export hay to major importers in the world such as the United Arab Emirates, Saudi Arabia, and China.
  • Mexico can also 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 the end of 2026 at a CAGR of 0.1%.

Threats

  • Climate change is one of the biggest threats to the hay market in Mexico. According to Scielo, the main forage crop in the country is alfalfa. The crop is threatened by the increasing "temperature and its influence upon the reduction of areas with high productive potential."
  • The hay market in Mexico faces competition from other neighboring hay exporters such as Canada and the United States. The United States has a market share of 49.3% while Canada has a market share of 5.41%.
  • A decrease in agricultural land due to urbanization poses a threat to the hay market in Mexico.
Sources
Sources