Global alfalfa market

Alfalfa is one of the most nutritious and therefore most demanded forage crops in the global market, rich in protein and fiber. As a valuable plant, alfalfa has been cultivated by people for more than 6 thousand years and now has more than 100 varieties growing on all continents. Alfalfa is used to make a variety of forages, including haylage, grass meal, chaff and combined silage, with hay and pellets being the main feedstuffs. As hay, the crop is used primarily for livestock feeding, while pellets are more popular in the poultry and сuniculture. In addition, alfalfa is an effective siderate and nectar source for honey bee, which additionally contributes to the popularity of this crop among farmers in many regions.

The active development of dairy and beef cattle breeding around the world in recent years has stimulated demand for alfalfa, but the main producers of this crop have already practically exhausted the possibilities for increasing its production, which opens up prospects for new players to enter the global market. At the same time, a characteristic feature of the alfalfa market is its limited traceability in statistics: most of the production is grown by farms for their own use, which makes the volume of trade of this crop small in relation to the actual gross yields. Therefore, any estimates of market capacity are approximate.

The U.S. accounts for the largest share of global alfalfa production and consumption. The absolute leader in the cultivation of this crop is the United States, where it is widely used by farms both for their own consumption and for subsequent commercial sales in domestic and foreign markets. Significant volumes of alfalfa are also grown in Argentina and Canada.

The European region also accounts for a significant share of global alfalfa production, with Italy and Spain leading the region in terms of gross alfalfa yields. Like the U.S., European countries have a strong livestock sector, which supports a high demand for nutritious feed ingredients in general and alfalfa in particular.

While relatively small amounts of alfalfa are grown in Asia, there is significant demand for alfalfa, and Asian countries have been the largest buyers of alfalfa for many years. In particular, China, which is actively developing dairy farming, is heavily dependent on imports of this crop. Today, the markets of the countries of the region are mainly supplied with alfalfa from the USA, but the growing needs of local livestock breeders and the actual exhaustion of American and European alfalfa production open up prospects for increasing supplies from Russia.

Due to a combination of factors and conditions, Middle Eastern countries, primarily the Gulf monarchies, are currently considered to be among the most promising alfalfa markets. For example, Saudi Arabia and the UAE are currently investing significant resources to increase domestic production of livestock products, but their climates are virtually unsuitable for growing field crops, including water-intensive alfalfa. As a result, the growing demand for nutritious feed ingredients in these Middle Eastern countries can only be met by sourcing from abroad.

In 2023, the world production of alfalfa in dry matter was about 109.8 million tons, which is 1.9% less than in the previous year and 12.3% less than in 2019. The decrease in the output of this crop in recent years is largely due to the maturity of the market of major producing countries: in a number of countries, alfalfa acreage is decreasing due to its high water content. At the same time, the demand for forage products remains high, especially in regions actively developing the livestock sector. As a result, today the world market has significant additional demand for hay, which can be satisfied by the start of alfalfa supplies by countries with a favorable climate and unrealized potential for growing this crop.

The United States is the world leader in alfalfa production and exports. In 2023, the country produced about 37.8 million tons of alfalfa in dry matter, while in 2019-2023, gross yields of this crop in the States decreased due to difficulties with irrigation in dry regions. In 2024, U.S. farmers increased production to 39.2 million tons, but this level is still markedly below the record levels of previous years. Some competition to U.S. alfalfa producers in the North American region comes from agribusiness companies in neighboring Canada, which are also important players in the global hay market.

Argentina is also a major producer of alfalfa, growing about 16-18 million tons of this crop annually (the largest volume among South American countries). At the same time, the bulk of Argentina's production is either used in the farms that harvest it or sold on the domestic market, while a small portion of the crop is exported. A similar situation is observed in Turkey: the country produces substantial amounts of alfalfa, but relatively little Turkish hay is supplied to the world market.

In the European region, Italy is the leader in alfalfa production, producing about 15-21 million tons of alfalfa annually. In 2019-2023, the country saw a decline in production, but in 2024, Italian farmers harvested 16.7 million tons of alfalfa hay, up 8.3% from 2023. Spain also makes a significant contribution to the development of the European alfalfa industry, harvesting about 3 million tons of the crop annually in dry matter.

China is considered Asia's leading alfalfa producer, harvesting about 3-4 million tons of alfalfa annually. The country is gradually increasing hay production amid rising demand from livestock farmers, but current production volumes are insufficient to meet current needs, and the country is one of the three largest importers of alfalfa, along with Japan and the Republic of Korea.

Australia also plays a key role in the global alfalfa market today, being the second largest exporter of alfalfa in the world (after the USA). Meanwhile, the local export-oriented alfalfa production has increased by nearly 40% during 2019- 2023, which is the best value among all developed countries.

In 2023, global imports of feed products that contain alfalfa totaled 8.8 million tons valued at US$3.4 billion. Compared to the record level of 2022, the value decreased by 19.9% in volume terms and 14.6% in value terms. At the same time, for 2019-2023 as a whole, global imports of these products decreased by 8.5% in volume terms and increased by 17.5% in value terms.

The basis of global imports of feed products containing alfalfa is hay - in 2023, this product accounted for 87.0% of total purchases in volume terms (7.7 million tons) and 87.7% in value terms (USD 3.0 billion). The share of alfalfa meal and pellets in the structure of global imports at the end of the year was 13.0% (1.1 million tons) and 12.3% (USD 424.8 million), respectively, which is noticeably lower than in previous years.

Japan is the world's largest importer of feed products containing alfalfa, purchasing 1.9 million tons of this product in 2023 (21.3% of world imports in volume terms). The top five major buying countries at year-end also included the Republic of Korea (1.4 million tons or 16.1% of world imports), China (1.2 million tons or 13.9%), UAE (1.0 million tons or 11.4%) and Saudi Arabia (854.3 thousand tons or 9.7%). Cumulatively, the top 10 importers accounted for 90.2% of global purchases of the products in volume terms in 2023.

In 2019–2023, imports of feed products containing alfalfa increased most significantly in Vietnam (20.9 times or 183.2 thousand tons), European Union countries (4.9 times or 258.6 thousand tons), the United States (+86.6% or +230,200 tons), and the Republic of Korea (+23.3% or +266,700 tons). At the same time, purchases of this product by the UAE (-47.8% or -916,000 tons), China (-24.3% or -392,800 tons) and Japan (-22.2% or -535,200 tons) decreased significantly during the same period.

In terms of value, Japan is the largest importer of feed products containing alfalfa, purchasing US$724.6 million worth of these products in 2023 (21.0% of global imports). Significant purchases at the end of the year were also made by China (US$523.0 million or 15.2% of global imports), the Republic of Korea (US$455.9 million or 13.2%), the UAE (US$440.2 million or 12.8%), and Saudi Arabia (US$389.0 million or 11.3%). In total, the top 10 buyer countries in 2023 accounted for 89.8% of global imports of feed products containing alfalfa in value terms.

In the period 2019–2023, the main growth in global imports of feed products containing alfalfa in value terms was provided by Vietnam (16 times or US$60.5 million), EU countries (4.9 times or US$102.1 million), the US (+89.4% or +$84.0 million), and Saudi Arabia (+63.8% or +$151.5 million). At the same time, purchases of this product were significantly reduced by Japan (-10.5% or -$85.3 million) and the UAE (-4.5% or -$20.8 million).

In 2023, global exports of feed products containing alfalfa amounted to 8.8 million tons worth US$3.4 billion. Compared to the record level of 2022, the indicator decreased by 20.1% in volume terms and by 15.6% in value terms. At the same time, in 2019–2023, global exports of these products decreased by 8.8% in volume terms and increased by 15.4% in value terms.

Hay traditionally accounts for the bulk of global exports of feed products containing alfalfa: in 2023, it accounted for 87.3% of total shipments in volume terms (7.7 million tons) and 88.0% in value terms (US$3.0 billion). The share of alfalfa meal and pellets in the structure of global exports at the end of the year was 12.7% (1.1 million tons) and 12.0% (US$405.5 million), respectively, which is significantly lower than in previous years.

The largest exporter of feed products containing alfalfa is the United States – in 2023, the country exported 4.0 million tons of this product category, accounting for 45.4% of global exports in volume terms. Australia (1.7 million tons or 19.9%) and the EU countries (1.5 million tons or 16.8%, with Spain, Italy, and France supplying the largest volumes) were also among the leading players in the global alfalfa market at the end of the year. In total, the top 10 countries supplying feed products containing alfalfa accounted for 96.9% of global exports of these products in volume terms in 2023.

In 2019–2023, Australia (+55.6% or +623.6 thousand tons), Argentina (+50.7% or +46.0 thousand tons) and Canada (+42.8% or +186.3 thousand tons) increased their supplies of feed products containing alfalfa the most . At the same time, exports of these products from Sudan (-72.0% or -140.7 thousand tons), EU countries (-23.1% or -445.3 thousand tons) and the US (-18.6% or -913.3 thousand tons) decreased over the same period.

In terms of value, the largest share of exports of feed products containing alfalfa in 2023 was accounted for by the US (about US$1.6 billion or 46.4% of global supplies), Australia (US$618.1 million or 18.4%) and EU countries (US$563.7 million or 16.7%, mainly Spain, Italy and Romania). or 18.4%), and EU countries (US$563.7 million or 16.7%, mainly Spain, Italy, and Romania). In total, the top 10 suppliers of feed products containing alfalfa accounted for 96.8% of global exports of these products in value terms in 2023.

In 2019–2023, there was a significant increase in the value of exports of feed products containing alfalfa from Egypt (2.5 times or US$43.9 million), Australia (+58.8% or +US$228.9 million), and Canada (+47.7% or +US$79.4 million). At the same time, supplies of these products from Sudan (-54.2% or -$30.0 million) and South Africa (-11.1% or -$6.2 million) decreased.

The average import price of feed products containing alfalfa increased by 6.7% in 2023 compared to the previous year and reached a record high of US$391 per ton. Among the leading importing countries, the most expensive products were purchased by Saudi Arabia (16.3% above the world average price), the UAE (12.4% above) and China (9.4% above). The lowest purchase prices at the end of the year were recorded in Switzerland (23.4% below the world average price), the Republic of Korea (17.6% below) and Vietnam (14.3% below).

The average export price of feed products containing alfalfa in 2023 was US$383 per ton, which is 5.7% higher than in 2022 and is the highest value in the last five years. The most expensive products among the leading exporting countries were supplied by Sudan (20.5% above the world average price), Egypt (19.2% above) and Argentina (17.0% above). The lowest prices at the end of the year were recorded for products from Mexico (36.7% below the world average price) and Australia (7.6% below).

Among feed products containing alfalfa, hay is traditionally more expensive – in 2023, its average import price was $394 per ton, which is 6.1% more expensive than flour and pellets. At the same time, between 2019 and 2023, the import price of alfalfa meal and pellets increased by 41.1%, while hay increased in price by 25.2%.

The most expensive type of exported feed products containing alfalfa is hay, whose export price reached US$386 per ton in 2023, which is 5.9% more expensive than flour and pellets (US$364 per ton). At the same time, between 2019 and 2023, the export price of alfalfa meal and pellets increased by 40.5%, while hay increased in price by 23.2%.