Notes

• According to the Spanish Alfalfa Association, in 2019, the total production of alfalfa amounted to 1,411,400 metric tons. 
• The second most popular cultivated legume was vetch, with roughly 120,000 hectares. 
•  Reygrass and fescues were the other two forage plants with the most mount of cultivated land.
• In 2019, Spain produced 1,223.5 metric tons of reygrass.

Research Strategy

Key Assumptions

• Although data from the AEFA (National Dried Alfalfa Producers Association) regarding the precise breakdown of hay production by hay form is not directly available for free, reporting of AEFA data by international trade organizations (e.g., USDA Foreign Agriculture Service) and industry media (e.g., The Dairy Site) consistently indicates that approximately 75% of all hay produced in Spain is in the form of bales.
• While these and other credible research sources, including market research reports (e.g., Mordor Intelligence), content by industry players (e.g., Groupo Contenosa) and information from hay retailers (e.g., Alibaba), fail to further delineate hay production between small square bales, round bales and large square bales, direct reporting by the AEFA suggests that the majority of hay bales produced in Spain are "large format," with "all manufacturers" in the country selling these larger square bales, with "weights ranging from 700-800 kg" per bale.
• However, the AEFA adds that "various manufacturers" are also now producing "small bales with weights that range from 25-40 kg."

Hay market in Spain

• In 2019, Spanish exports for alfalfa hay were valued at $54.54 million, with an expected CAGR of 5.3% between 2020 and 2025. Spain serves as one of the top exporters of alfalfa hay globally with the highest market share. Alfalfa meal and pellets accounted for 18.7% of the total exports in Spain in 2019.
• In 2015, Spain exported approximately 200-kilo tons of Alfalfa Hay.
• The alfalfa hay market includes the sale of bales, pellets, and cubes. Applications for the products include meat/dairy animal feed, poultry, horse feed, and other animal types.
• As reported by the FAO, the market's growth is driven by an increase in livestock in Spain, with the cattle and bull population increasing from 6.46 million in 2017 to 6.51 million in 2018. Also, the export sales of alfalfa hay from Spain increase due to the nutritional properties the product offers with 15-22% crude protein.
• "Spain's is the EU-28 largest dry fodder producer and exporter. Dry conditions prevailing in MY2017/18 limited production, and consequently, export possibilities during that season. Despite the industry's lower overall plantings, a marginal recovery in dried fodder production levels is anticipated for MY2018/19 due to better yields, particularly in non-irrigated land."
• The initial segment of MY2018/19 was held up by three weeks due to rains and mild spring temperatures, which delayed the crop's development and lengthened the MY2017/18 season. Eventually, the season concluded with minimal stock levels. Regarding quality, the overabundance of water was damaging to the MY2018/19 initial cut.
• Meanwhile, dry conditions at the start of the summer season facilitated a qualitative recuperation of the summer cuts. Due to a lack of considerable domestic demand, the fodder industry in Spain continues to search for brand-new markets to help broaden its products' destination.
• The Ebro Valley (Aragon and Catalonia) and Castilla y Leon serve as Spain's most significant alfalfa-farming regions. Agricultural techniques vary depending on the alfalfa producing regions.
• Aragon is the most commonly cultivated alfalfa in the Ebro Valley with 75% of it obtained through land under irrigation. It is an export market-oriented the area, and the Port of Barcelona acts as the primary exit port.
• Almost 70% of the alfalfa in Castilla y Leon is non-irrigated, with production being directed towards sustaining the domestic dairy herd. "Tierra de Campos" are the most widely known type of alfalfa being cultivated, and it performs admirably within heavy clay soils.
• In MY2017/18, arid conditions in the complete crop cycle diminished the yield within non-irrigated land, representing close to 30% of Spain's overall alfalfa planted area, as well as accelerated irrigation requirements in irrigated land. Total production levels decreased by 10% over the prior season.

Overview market

• Most of the Spanish dried alfalfa exports are distributed within a small volume of nations, with the United Arab Emirates serving as the top destination of the nation's dried fodder exports.
• "A shorter Spanish crop in MY2017/18, combined with the stiff competition with U.S. alfalfa in Saudi Arabia, prevented Spanish fodder exports to this market to grow despite its decision to phase out its domestic forage production."

• Spain maintains the greatest market for the export of alfalfa hay in Europe. The country exported approximately 273,000 metric tons of the product in 2015.

• In the United States, the total trade value of alfalfa exceeds Spain's by about USD 5 million. Despite this, Spain's net quantity is higher as the United States produces superior quality crops.

• From 2020 to 2025, the alfalfa hay market in Spain is expected to register a CAGR of 5.3%. The country is one of Europe's most significant alfalfa producers. The demand for alfalfa is expanding in the market because of its high nutritional content. This is bolstering the market as the need for quality feed is growing.

• Spain's major export destinations include France, the U.A.E., and China. Growth in domestic production, the increased demand for hay within the U.A.E. and the Middle East are major factors accelerating the alfalfa hay market in Spain.

Nutrient content export market

• Compared to grass hay, alfalfa hay is higher in both minerals and protein because of its nutritional benefits. Alfalfa is rather high in energy, acting as a great source of minerals and vitamins.
• "It contains between 15 to 22% crude protein and an excellent source of a wide range of vitamins and minerals. Due to the high nutritional content of alfalfa, the demand is growing across the world."

• Spain was one of the major alfalfa pellets and meal in 2019, as it maintained 18.7% of overall exports.

• In "2019, the amount of feed and pellets exported was 230,851 tons compared to 342,270 tons in 2018. Spain accounted for the export value of USD 54,544 thousand in 2019 compared to USD 76,478 thousand in 2018." 
• The major importers for Spain in 2019 were France, the U.A.E., and China, with shares of 19.6%, 14.7%, 12.1% respectively.

Research strategy

Value of Hay

• The value of hay is measured in relative feed value (RFV) and crude protein (CP).
• For hay packaged in bales, the quality of RFV and CP are categorized into superior, extra, primera (first), and segunda (second). For hay processed into pellets, the quality of RFV and CP are categorized into extra, primera (first), and segunda (second).
• RFV is regarded as a better measure of quality compared to CP.

Players

• Players involved in the sale of hay include farmers and manufacturers of bales and pellets.
• The Spanish Manufacturers Association of Dehydrated Alfalfa (AEFA) represents 90% of Spanish manufacturers.
• For domestic consumption, hay is sold primarily to breeders of dairy cows. Other buyers include breeders of sheep and goats.

Common Practices Employed

• In Spain, hay is produced through sun-drying or mechanical dehydration.
• Sun-cured hay is typically less homogeneous and is produced for domestic consumption. The processes involved in the production of sun-cured hay include "mowing, which may be combined with conditioning; turning and tedding to allow an even drying, windrowing, collection, and baling".
• Dehydrated hay undergoes cutting in the field, it is then windrowed and taken to the processing plant where it is dried with an airflow of 300ºC using the processing plant drier. The final product has moisture levels of 12-14%.

Market Overview

• In 2019, Spanish exports for alfalfa hay were valued at $54.54 million USD with an expected CAGR of 5.3% between 2020 and 2025.
• Spain is one of the leading exporters of alfalfa hay globally with the highest market share. Alfalfa meal and pellets accounted for 18.7% of the total exports in Spain in 2019.
• In 2015, Spain exported approximately 200-kilo tons of Alfalfa Hay.
• The alfalfa hay market includes the sale of bales, pellets, and cubes. 
•  Applications for the products include meat/dairy animal feed, poultry, horse feed, and other animal types.

Trends

• According to FAO, the growth in the market is driven by an increase in livestock in Spain with the cattle and bull population increasing from 6.46 million in 2017 to 6.51 million in 2018. 
• In addition, the export sales of alfalfa hay from Spain are increasing due to the nutritional properties the product offers with 15-22% crude protein.  

Key Players

•  Alfalfa Monegros 
•  S. L., Al Dahra Agriculture 
•  DYCASA Anderson Hay & Grain Inc. 
•  Cubeit Hay Company 
•  AGER S.L 
•  Grupo Osés 

Highlights

• The bulk of alfalfa exports from Spain is concentrated in a few countries particularly countries in the Middle East-North Africa such as Saudi Arabia, China, Jordan, Morocco, Lebanon, Kuwait, Japan and Tunisia, with the United Arab Emirates being the major destination. This can be regarded as a weakness.
• Spain could benefit from the existing trade war between the United States and China and further consolidate its presence in the country. For example, China only recently lifted duties on U.S. alfalfa in September 2019, the duties on U.S. alfalfa were imposed in mid-2018. Consequently, Spain registered increased sales of fodder to China.
• More than 50% of Spain's planted area for alfalfa and vetches "maintains contracts with the dried fodder industry."

Research Strategy