Summary

• In 2012, New Zealand harvested 862,057 ha of pasture/lucerne (hay).
• In 2019, New Zealand exported hay worth $7.46 million. 
• The quantity of hay exported was 28.26 million kg (28,260 tons).
• The top countries to which New Zealand exports hay to are Japan, Australia, Korea, Hong Kong, Singapore, China, Saudi Arabia, New Caledonia, and the United Arab Emirates.
• Japan is the largest importer of hay form New Zealand with a share of 42% ($3.17 million). The second-largest importer of hay is Australia, with a share of 31% ($2.33 million), and the third-largest is Korea, with a share of 16.3% ($1.22 million). 

• Lucerne produces 12-20 t DM/ha/yr.

Research Strategy

Select Findings

• NZ produces 466,776 tons/ yr. of alfalfa.
• Ryegrass-white clover pastures account for 110,211 ton/ yr of feed.
•  32,910 tons of ryegrass seeds were produced in 2018.
•  4,220 tons of white clover seeds were produced in 2018.
•  1,110 tons of orchardgrass/ cocksfoot grass seeds were produced in 2018.
• Bermudagrass and kleingrass pastures can be found in NZ.

Research Strategy

Related Findings

• In 2017, 801,882 thousand hectares of pasture/lucerne hay, silage, or balage were harvested in New Zealand.
•  41,268 thousand hectares of maize silage was harvested in the same year.
•  17,815 thousand hectares of other silage was harvested.
•  25,514 thousand hectares of cereal silage was also harvested in New Zealand in 2017.

Research Strategy

Key Findings

• According to the USDA Foreign Agricultural Service, New Zealand's animal feed demand is expected to continue its growth as its dairy, poultry, and livestock sectors continue to grow.
• The report forecasts a shortfall in livestock feed by 2020. Demand for feed in various sectors, including horses, and pets is "expected to grow by 104,000 MT or 9% by 2020."
• Furthermore, combined with the dairy feed shortfall and the likely reduction in PKE imports, feed shortage is expected to increase from "450,000 MT to 1.27 MMT per year by 2020."
• The Ministry of Agriculture in New Zealand "puts the number of smallholdings (between one and 40 ha) at well over 70,000, and growing fast."

Research Strategy

Calculations

• It is logical to assume that New Zealand produces and consumes any amount of its hay produce that is not exported or imported.
• TrendEconomy states that the country exported about 28,260,950kg (28,260,950/1000 = 28,260 tons) and imported about 688,123kg (688,123/1000 = 688 tons) in 2019.
• Using the value of total hay produced to be 13.8 million metric tons, New Zealand consumes [13,800,000 — (28,260+688)] = [13,800,000 – 28,984] = 13,771,016 metric tons. The percentage of hay produced and consumed is (13,771,016/13,800,800)*100 =0.997*100= 99.7%

• The percentage of hay sold is 0.3% (100-99.7)%.

Findings

• Lucerne/ hay consumed by cows in NZ: 47,328 tons/ yr.
• Lucerne/ hay consumed by beef in NZ: 55,392 tons/ yr.
• Lucerne/ hay consumed by equine in NZ: 1,168 tons/ yr.
• Lucerne/ hay consumed by sheep in NZ: 432,000 tons/ yr.
• Lucerne/ hay consumed by pets in NZ: N/A

Research Strategy

 

Source

 

Statistics

Calculations

Value of Hay in New Zealand: Definition

• According to DairyNZ (the organization that currently represents every dairy farmer in New Zealand), the most familiar ways of measuring hay's feed value (whenever it is traded in New Zealand) include measuring and defining its contents like DM (dry matter).

• Determining the value of hay in New Zealand also involves measurement of metabolizable energy for every kilogram of dry weight (known as M/D for short or MJME/kg DM), evaluation of percentage of CP (crude protein) content, NDF content (neutral detergent fiber), SSS content (soluble sugars and starch), and an assessment of the percentage of fat content.

• DM (dry matter): The cost of purchased hay is often discussed based on its dry matter in kilograms.

• M/D or MJME/kg DM: In New Zealand, the value of feed (including hay) is analyzed in terms of energy. Its value is often quantified in mega-joules of metabolizable energy per kilogram of dry matter M/D for short (or MJME/kg DM).

• Percentage of CP (Crude Protein): Crude protein content is one of the quality factors of significant importance in New Zealand. Crude protein includes the hay's nitrogen content, including amino acids and non-protein nitrogen (such as urea).

• Neutral Detergent Fiber (NDF) Content: Neutral detergent fiber (known as NDF) measures the cell wall or fibrous fraction of hay. This analysis includes cellulose and lignin.

• Soluble Sugars and Starch (SSS Content) is a parameter used to define hay's value in New Zealand. Most meadow hay in New Zealand contains 10 to 20% starch plus soluble sugar.

Stakeholders: Those Involved in the Sale of Hay In New Zealand

• There is a nationwide hay feed shortage in New Zealand. Some critical stakeholders involved in hay sales (combating this shortage) are small block farmers, commercial-scale farmers, and farmers associations like East Coast Young Farmers. Other stakeholders often participate in hay sales across New Zealand, including local council catchment staff, civil defence staff, and rural advisory group leaders.

• The importation of hay is restricted or prohibited in New Zealand. Consequently, local companies like Farmfeed, Hay And Straw Company, as well as local council staff, among other key players, often help in sourcing local hay for farmers to feed their animals.

• Hay (to be used for feed) often originates from farms in Manawatu, North, and Hawkes Bay area of New Zealand.

Common Practices

• Traditionally, farmers in New Zealand farmers depend on fresh grass to feed their animals like cows and make their supplementary hay. Recently, companies like PKE have become famous for delivering feed (including hay) to New Zealand farms.

• In New Zealand, hay bales get tied to weigh up to weigh about 900kg before sales. Traditional smaller squares of hay are still available across several parts of the country. Hay is packed in polyethylene bags (aquamarine raincoats) before sales.

• Hay contractors often shy away from small bales that require human handing due to lack of labor for offloading sold hay items. They prefer massive mounds of hay, which they handle using machinery worth several millions of dollars.

• Some companies like SGS New Zealand Limited are involved in testing the quality of hay before purchase.•

Research Strategy

Market Research:

• The world imports of dairy animal feed "Swedes, mangolds, fodder roots, hay, lucerne (alfalfa), clover, sainfoin, forage kale, lupines, vetches, and similar forage products, whether or not in the form of pellets." increased from $2.8 billion (in 2017) to $3.05 billion (in 2018). 
• The five biggest importing countries of diary animal feed, in 2018, included Japan (25% of the world's import) , China (17.4%), United Arab Emirates (13.7%), Korea (11.2%), and Saudi Arabia (9.7%). These countries contributed to a total market size of USD 2.37 billion. 
• The largest producers and exporters of animal feed that include hay, fodder, and similar commodities are the USA, Australia, Spain, Canada, and France; contributing to a global export share of 49.3%, 14.87%, 10.25%, 5.41%, and 4.01% respectively.
• Alfalfa Hay is legume hay also known as Lucerne, having higher protein and mineral content, compared to grass hay. The global Alfalfa market is projected at a 5.0% Compound Annual Groth Rate (between 2019-2025) and predicted to reach a market size of USD 39.7 billion by 2025.
• The United States Department of Agriculture Report on New Zealand's dairy animal feed consumption has estimated an increase of consumption from 3.84 million metric tons (MMT) (in 2012/2013) to 4.89 MMT (in 2017/2018).
• According to the 'Global Agricultural Information Network' report, New Zealand’s demand for grain and feed is predicted to grow around 5.9 million tonnes, between 2019-20, which will largely be met through imports.
• In 2018, New Zealand's export and import statistics for animal feed commodities such as hay, fodder, lucerne (alfalfa), and similar products are mentioned below:

• The dairy industry is the major consumer of hay, which directly adds to the increase in exports of dairy products. New Zealand is the 7th largest producer of milk worldwide, contributing to 3% of the global milk share market. 

• In 2018, the dairy farming contributed to 28% of the total merchandise exported. 

New Zealand Agriculture Facts and Statistics:

• The total land area is about 27 million hectares. Of which, two-third is inhabited by people, while one-third is in established pasture.
• The country's agriculture system heavily relies upon grassland pastures, based around ryegrass and white clover, to feed the livestock industry.
• Since the pasture growth and animal feed requirements are variable across different seasons, which creates a demand for on-farm stored supplementary feed - in the form of hay and silage.
• In the North Island Farms, pasture-derived hay and silage are predominant, where there is a need for more fodder crops as supplementary feed.
• In the South Island Farms, mixed livestock-grain cropping systems are predominant, compared with all-grass farming in the North Island.
• Forage brassicas and cereals (of which oat and maize crops predominate) are the major arable forage crops used for animal forage supplements in New Zealand
•  Fodder production and feeding have been a challenge in recent years, due to an increase in demand due to an increase in the population of dairy cows. Hence, an increase in demand for higher quality supplementary feeds.
• New Zealand's domestic animal and forage industry produce between 1.6 to nearly 2 million metric tons (MMT) of product per year (from data between 2013 and 2018). 
• In FY 2017/2018, New Zealand's domestic animal feed production was 1.86 MMT, whereas, the total supply was 5.5 MMT, which was met with 5.5 MMT of imports. 
• Whereas, the total exports of animal feed (in metric tons) shows a consistent declining trend ranging from 13,195 (in FY 2012/13), 13,358 (in FY 2013/14), 10,198 (in FY 2014/15), 9,192 (in FY 2015/16), 6,007 (in FY 2016/17), to 5,000 (in FY 2017/18).
• The statistics related to the area of agricultural land used for Fodder, Pasteur, and Alfalfa agriculture is mentioned below:

Research Methodology:

New Zealand's Hay Market SWOT Analysis

• The process of mowing, tedding, raking, and baling nowadays "requires much less manpower, and production is much quicker."
• Lucerne hay's export value in this country had a CAGR of 40.3% between 2006 and 2016, as per the latest data.
• New-season crops are currently (September 2020) "performing well."

• Other products, like silage and haylage, have replaced hay in popularity.
• As of September 2020, grain movement has been slow-moving in New Zealand.
• Feed contract pricing for 2021 is expected to be slightly behind compared to 2020.

• In 2019, hay prices in New Zealand decreased by 4.4%, which represents an opportunity to attract new businesses.
• In May 2020, the crop industry received a contribution from the government due to the latest drought experienced in the country. This could also be an opportunity for the industry to cope with financial burdens suffered by farmers.

• Hay production in New Zealand is "getting increasingly harder" because of the changing weather patterns that are not providing "dry, hot breaks when the hay is ready."
• Currently, border restrictions have caused a "shortage of foreign agricultural workers." This could represent a threat to the agricultural sector.