U.S. exporters may see fewer alfalfa hay sales to the United Arab Emirates (UAE) in 2014. The UAE bought enough hay last year that it will scale back purchases, hay export companies have told Seth Hoyt, market analyst and author of The Hoyt Report weekly newsletter.
“UAE imported so much hay that it has a logjam of supplies over there right now,” said Hoyt quoting export sources.
Alfalfa hay shipments have also slowed to China from the West Coast, Hoyt was told. That was confirmed by U.S. Department of Commerce data; alfalfa hay exports to China dropped by 15% in December 2013 vs. November. Alfalfa hay exports to China should pick up in coming months. Some exporters think that the West Coast will see a smaller year-to-year increase in alfalfa hay exports to China in 2014 as compared to the increase in 2013 vs. 2012 totals. This is mainly due to competition from dairies in the West, particularly those in California.
Hoyt won’t attempt, at this point, to guess the extent that U.S. hay exports will decline. But the UAE is the largest importer of Western U.S. alfalfa hay, he reminded listeners while speaking at the World Ag Expo Forage Seminars in mid-February.
In November of 2012, the UAE imported 63,000 metric tons (mt) of alfalfa hay from the West Coast – compared to 46,000 mt in November 2013. That’s according to the most recent U.S. Department of Commerce numbers. A new commerce department report on exports will come out in early March.
“Hay supplies in the UAE exceed demand, particularly on lesser-quality hay, according to export sources. It appears that West Coast exporters will sell less fair-quality export alfalfa hay to the UAE in 2014,” Hoyt said.
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The Chinese, who increased hay imports by 60% in 2013, at times have erratic buying patterns and have over-purchased alfalfa hay in the near term, export sources told Hoyt.
“The latest number I heard is that there are 15 million dairy cows in China. We have 9.2 million (in the U.S.). The government in China stated a year ago that they wanted to double milk production within five years.
“But their milk production went down 5.7% in 2013. Some of the Chinese dairies are complaining that they don’t have enough quality feed. So it appears that there will be good demand from China for quality alfalfa hay.”
The country also just signed off on a deal to buy dehydrated alfalfa from Spain, he said. “And they’re trying to grow alfalfa hay in their country and other parts of the world. They’re looking all over the world for supply, but some exporters believe they will still need to buy more alfalfa hay from us in 2014 than what they purchased last year.”
West Coast exports of alfalfa hay to China peaked last year at 65,000 mt in August. In December 2013, exports were down to just more than 47,000 mt, but still 7,000 mt higher than the December 2012 total, according to the U.S. Department of Commerce.
In Japan, alfalfa hay imports from the U.S. were down by 2% in 2013 and look to be flat in 2014. “The weak Japanese yen has really impacted purchases of hay,” Hoyt said. “Exporters don’t look for any increases there.”
Sudangrass hay exports to Japan were down as much as 5% and, with the weak yen, it doesn’t appear that there will be any increase in 2014.
Timothy exports to Japan from the Pacific Northwest (PNW) were down 15% in 2013. But that market could be strong early in the 2014 season as Japanese buyers look for higher-quality timothy, according to some exporters.
Some Japanese government subsidy money is also still available. “The subsidy has been decreasing, but it hasn’t been eliminated,” said Hoyt according to his sources. Some exporters are not as positive about the demand and market for lesser-quality timothy in 2014.
Hoyt cited Japanese port data showing December 2013 PNW exports of timothy hay at 25,000 mt compared to the December 2012 total of 38,000 mt.
Oaten hay from Australia, which harvested a large crop this past fall, may make the country a tougher competitor to U.S. exporters for the Japanese market in the coming year, he added.
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