Several countries are becoming bigger players in the hay export market. Each year, US competition is growing more stiff as agricultural systems around the world improve. Where is the world’s hay going? And what do we need to do to continue grow markets and remain competitive?
Hay Export Competition
Lynn Jaynes of Progressive Forage published an update provided by information from the US Export Council (USFEC), and argues that there are many strong players in the hay export market. USFEC director John Szczepanski spoke at the California Alfalfa and Forage Association Symposium in Reno, Nevada.
“We’re not the only dog in town,”Szczepanski said.
Hay supplies are coming from all over the world. Many of the big players remain the same- Canada and Australia have always been strong. But countries like Spain, Sudan, Egypt, Pakistan, Bulgaria, Romania, Ukraine, Kyrgyzstan, Kazakhstan and Mongolia are stepping up as well. Agricultural systems in many of these countries are improving, and they’re now becoming bigger players in the export market. The US edge is fading. Szczepanski provides one example.
“Argentina, which we would have laughed at a few years ago [as being a hay export player], is now not laughable, as they’ve become a forage exporter of note,” he said.
Where is the world’s hay going? Szczepanski provides a run-down of the major hay export markets.
Japan buys 35% of “other” forages and is the number one export destination for them. Exports to Japan are about the same as they were ten years ago, and total around $400 million. Japan is particularly concerned with the US use of clopyralid on some forages as a pre- and post-emergent herbicide. It’s consumed by cattle and doesn’t break down easily. Cow manure there is frequently used for vegetable fertilizer, and that’s been damaging their vegetable crops.
To remain competitive, US growers need to watch their use of clopyralid and make sure that they know the products they’re using that contain it- Clean Slate, Curtail, Confront, Colt, Lontrel, Redeem, Stinger, SureStart, WideMatch, TrippleFLEX, Millennium Ultra, and Reclaim. Szczpanski says growers need to follow the label, and that hay shouldn’t be exported the same year clopyralid is applied.
Korea represents around 16% of the export market with around $200 million in sales. Most of it is fescue and straw.
United Arab Emirates
The UAE market has shrunk since its peak in 2010. It’s now a $100 million market and they’re buying larger amounts of low-quality hay from Eastern Europe.
Saudi Arabia represents 13% of hay exports. Many predict growth potential due to government restrictions on irrigation there. It’s a market that has already grown significantly in the last five years.
Seth Hoyt of Hay and Forage Grower also says that Saudi Arabia could be a growing market for hay exports. No alfalfa has been planted there since last September. Saudi Arabia isn’t allowing large alfalfa growing farms to use irrigation, which has made hay production difficult. A lot of the hay that’s been exported there thus far has come from Western US states like California and Arizona. It’s a market that may continue to expand to other areas through 2019.
Hoyt also see potential in China if there’s a resolution to the trade war. West Coast alfalfa hay exports to China have been down from the previous year- 32% in September and 47% in November. The tariffs have made US hay too expensive for Chinese dairy farmers to buy. They’ve been filling the gap with less expensive, lower quality hay from Spain and the Sudan in Africa. If there happens to be a resolution to the trade war, China will have additional demand for US hay and exports would increase.
Szczpanski estimates that China represents 24% of the hay export market and is number two overall. They’re number one for alfalfa. China has been trying to us domestic sources for hay, but is also likely looking to alternative sources. Szczpanski says this is a dangerous situation. Once a customer moves to a different feeding system, it’s hard to switch.
Growing New Markets
Szczpanski predicts that India may be a growing hay market. The country has 135 million cows and 125 million buffalo. For the most part, dairies there are small- but there is growth potential.
“Remember,” Szczepanski said, “it only takes a sliver of progressive dairies that creates a market of opportunity.” USFEC will send six to 10 forage exporters to a tradeshow in Mumbai this spring to try and open some markets. “It’s not just putting out fires in China with tariffs,” he said, “but looking ahead to new opportunities in the future.”
In a related Ag Nook article titled, “2018 Hay Round-Up“, learn what factors will be in play for the 2019 hay market.
Szczpanski sees potential in hay exports to India. Hoyt predicts hay exports to Saudi Arabia to grow. There is also a possibility of increased exports to China if the trade war is resolved. Korea, UAE and Japan are also large export destinations. In order to remain competitive in Japanese markets, US growers will need to monitor herbicide use.