In MY2012/13 the Spanish dehydrated fodder sector will face a number of challenges.
THIS REPORT CONTAINS ASSESSMENTS OF COMMODITY AND TRADE ISSUES MADE BY
USDA STAFF AND NOT NECESSARILY STATEMENTS OF OFFICIAL U.S. GOVERNMENT
GAIN Report Number: SP1205
Spanish Dried Fodder Sector Faces New Challenges
Grain and Feed
In MY2012/13 the Spanish dehydrated fodder sector will face a number of challenges that include
lower water availability for irrigation (as the result of an extremely dry winter) and the total decoupling
of dried fodder support payments. The weak domestic demand is expected to be offset by a consolidated
presence of Spanish dried fodder in export markets, particularly in the Middle East.
Disclaimer: This report presents the situation for forage production and exports in Spain. This report
contains the views of the authors and does not reflect the official views of the U.S. Department of
Agriculture (USDA). The data are not official USDA data.
Abbreviations used in this report:
CMO Common Market Organization
EC European Commission
EU European Union
FAS Foreign Agricultural Service
GTA Global Trade Atlas
SPS Single Payment Scheme
HS Codes: Harmonized System codes for commodity classification used to calculate trade data.
Harmonized Codes for Dehydrated Fodder:
1214 Rutabagas (Swedes), mangolds, fodder roots, hay alfalfa (lucerne), clover, sainfoin, forage kale,
lupines, vetches and similar forage products, whether or not in the form of pellets.
121410 Alfalfa (Lucerne) meal and pellets; dehydrated, sun-cured and other.
121490 Hay (including alfalfa, whether or not double compressed, and Timothy); clover; and
MS EU Member State(s)
MT Metric ton (1,000 kg)
MY Marketing year (May/April)
PS&D Production, Supply and Demand
N/A Not Available
Spanish Dried Fodder Sector Faces New Challenges Page 2 out of 8
Acreage and Production
Spain is the EU Member State with the largest dried fodder production, representing over 50 percent of
the total EU-27dried fodder production. Fodder cultivation expanded when Spain joined the European
Union in 1986, and since then, fodder production, has generally followed an upward trend, with the
exception of those market years where grain plantings turned to be more profitable.
As shown in Table 1, alfalfa continues being the main fodder crop, representing over 80 percent of total
fodder acreage. In the main growing areas, alfalfa is part of the rotation alfalfa-corn.
After area increases in MY 2009/10 and MY 2010/11, better prices in the grain market resumed
farmers? interest in planting grain crops for MY2011/12 instead of fodder crops, which lead to a
marginal decrease of fodder crops area. However, the area reduction was offset in terms of production
by higher yields.
For MY 2012/13, the total area planted to fodder crops is expected to decline marginally. Fodder crops
are planted for a five year period. In Spain half of the fodder plantings are carried out in winter and the
other half in spring. Good prices, significantly low ending stocks and a strong export demand
encouraged winter plantings. However, water availability in the main growing regions is constrained by
an extremely dry winter and farmers might switch to less water demanding crops - this is particularly
true in the case of spring plantings. In addition to that, new regulations entering into force, such as the
total decoupling of fodder payments (see policy section) might play a role in farmer?s decisions.
Table 1: Spain, Area Planted to Subsidized Dried Fodder (Hectare)
Market Year Alfalfa Vetch Sainfoin Fescue Corn Rye Other Total
2006/07 164,020 4,716 956 5,596 1,190 8,274 7,176 191,928
2007/08 143,554 4,583 506 6,043 1,197 7,744 5,994 169,623
2008/09 122,411 4,039 679 5,696 1,248 5,972 5,993 146,038
2009/10 135,747 9,106 641 9,748 1,076 8,301 4,074 168,693
2010/11 147,065 12,375 469 7,724 1,1,74 8,063 7,946 184,815
2011/12e 146,800 6,200 595 5,850 915 7,350 7,100 174,810
2012/13f 143,100 6,050 580 5,750 900 7,170 6,950 170,500
Source: FEGA (Spanish Agricultural Guarantee Fund) AEFA and FAS Madrid estimates.
According to National Crop Area and Yields Survey (ESYRCE), at the national level, almost 70 of the
alfalfa acreage is grown under irrigation. In Aragón, the main producing region, the percentage of
irrigated alfalfa amounted to nearly 80 percent, while in other relevant producing regions, such as
Castile y León, the percentage of irrigated alfalfa added up to 60 percent of the total area. The overall
high rate of irrigated alfalfa results in stable yields per hectare throughout the years.
Table 2: Spain, Production of Subsidized Dried Fodder (MT)
Spanish Dried Fodder Sector Faces New Challenges Page 3 out of 8
Market Dehydrated Fodder Sun Dried Total
2006/07 1,832,791 141,860 1,974,651
2007/08 1,683,736 98,603 1,782,339
2008/09 1,317,700 209,800 1,527,500
2009/10 1,553,309 157,300 1,710,609
2010/11 1,673,106 131,320 1,804,426
2011/12e 1,674,250 135,750 1,810,000
2012/13f 1,665,600 135,000 1,800,600
Source: AEFA (National Dried Alfalfa Producers Association) and FAS Madrid estimates.
In MY2011/12, water availability in irrigated land along with mild temperatures until mid fall resulted
in good yields by enabling farmers to carry out up to 6 cuts in many of their fields.
There are different techniques in preserving fodder through reducing moisture content, mainly
dehydration, sun-drying and milling. The resulting product includes pellets and bales. Bales are the
most common product, representing over 75 percent of total production.
According to the national standardization rule UNE 34602, pellets are made of fodder flour and should
be presented in a cylindrical shape; with a diameter between 3 and 13 mm and a maximum length of 6
cm. Bales are parallelepiped shaped formed by pressure, and tied by rope.
Depending on the type of fiber content they can be classified as:
Short fiber bales: containing less than 20 percent of long fiber (over 10 cm).
Long fiber bales: containing less than 20 percent of short fiber (below 10 cm).
According to their size, bales can be classified as:
Small bales: below 40 kg weight, that can be handled without mechanical assistance.
Large bales: over 40 kg weight, or that can only be handled with mechanical assistance.
Table 3: Spain Dried Fodder Product by Production Type (MT)
Market Year Pellets Bales Total
2006/07 671,381 1,303,269 1,974,651
2007/08 605,995 1,176,343 1,782,339
2008/09 534,625 534,625 1,527,500
2009/10 427,652 1,282,956 1,710,609
2010/11 451,106 1,353,350 1,804,426
2011/12e 416,300 1,393,700 1,810,000
2012/13f 414,138 1,386,462 1,800,600
Source: AEFA (National Dried Alfalfa Producers Association) and FAS Madrid estimates.
There were 100 dried fodder processing plants in Spain in 2005. In 2008, only 76 were operational and
Spanish Dried Fodder Sector Faces New Challenges Page 4 out of 8
only 74 are expected to operate in MY 2012/13. Aragon and Cataluña, both irrigated by the Ebro River,
and Castile y León in Spain?s central plateau, are the regions with the largest installed processing
capacity, representing about 80 percent of Spain?s total capacity.
Table 4: Spain Location of Processing Plants
Region Number of Plants
Castile y Leon 12
Castile-La Mancha 6
Balearic Islands 1
Source: AEFA (National Dried Alfalfa Producers Association).
*As part of its purchase policy, a UAE agricultural company purchased two dehydrating fodder plants
in Spain, whose production is completely devoted to the export market. One of them is located in
Zaragoza and was acquired in 2009, and the other one is located in Lleida, acquired in 2012.
Table 5: Spain Number of Processing Plants by MY
Marketing Year Number of Processors
Source: AEFA (National Dried Alfalfa Producers Association).
The dairy herd, which is the primary consumer of dehydrated fodder in Spain, has diminished its
inventories almost 10 percent throughout the last five years. Dried fodder demand in the domestic
market remains weak, driven by the downward trend of dairy cow population. However, milk prices
paid to farmers grew and so did dairy cow inventories throughout 2011.
Table 6: Dairy cow population, dairy cow milk production and milk average prices
Year 2007 2008 2009 2010 2011
Dairy cow population 932 888 837 837 851
Milk production (1,000 MT) 5,779.2 5,879.2 5,776.3 5,887.6 5,930.0
Spanish Dried Fodder Sector Faces New Challenges Page 5 out of 8
Price (Euros/ 100 kg) 36.41 39.08 30.02 30.26 31.80
Source: Eurostat. MARM. Dairy Survey and FAS Madrid estimates.
In MY2011/12, the pace of dried fodder sales during the first half of the marketing year has been higher
than in previous years resulting in lower company stocks and a tight market situation. The strong
demand of the export market has been the main driver.
The EU-27, lead by Spain, is the world third largest exporter of dried fodder after the U.S. and
Australia. While Spain?s imports come mainly from other EU Member States, United Arab Emirates,
followed by the EU and North African countries are Spain?s main clients.
Table 7: Spain Total Imports of Fodder by Origin in MT *
C MY MY MY MY MY ountry of Origin
2007/08 2008/09 2009/10 2010/11 2011/12e
EU-27 17,088 24,336 7,588 10,664 10,400
Others 1,129 1,171 944 158 400
TOTAL IMPORTS 18,217 25,507 8,532 10,822 10,800
Source: GTA and FAS Madrid estimates. * Includes both bales and pellets.
The EU and North Africa countries have been the traditional destination of Spain?s fodder.
Nevertheless, exports to United Arab Emirates (UAE) have been growing steadily over the five past
In MY2011/12 lower competition from the United States in the export markets allowed Spain to
increase its imports, concentrated mainly in the Middle East. In MY2011/12, exports to the UAE are
expected to account for almost 70 percent of Spain?s fodder exports, followed by the EU-27, which
represented about 20 percent of total exports. Other countries such as Saudi Arabia are also steady
increasingly importing fodder from Spain. For instance, in MY2011/12, exports to Saudi Arabia are
anticipated to represent nearly 10 percent of Spain?s total exports.
Table 8: Spain Total Exports of Fodder by Destination in MT *
Country of MY MY MY MY MY
Destination 2007/08 2008/09 2009/10 2010/11 2011/12e
Spanish Dried Fodder Sector Faces New Challenges Page 6 out of 8
EU-27 208,670 131,001 115,590 235,259 161,077
United Arab Emirates 202,803 260,458 370,294 335,917 585,985
Saudi Arabia 20,714 8,153 60,831 60,761 80,179
Morocco 44,508 25,812 11,460 37,248 9,352
Others 15,421 35,490 27,776 89,152 33,702
TOTAL EXPORTS 492,116 460,914 585,951 758,337 870,296
Source: GTA and FAS Madrid estimates.* Includes both bales and pellets.
Production, Supply and Demand
Table 10: Spain Production, Supply and Demand for Dehydrated Fodder
Mar Y MY MY MY MY MY Unitket Ye Mar
2007/08 2008/09 2009/10 2010/11 2011/12e 2012/13f s
P 1,782,33 1,527,50 1,710,60 1,804,42 1,810,00 1,800,60roduction
9 0 9 6 0 0 (MT)
Imports 18,217 25,507 8,532 10,822 10,800 10,500 (MT)
T 1,800,55 1,553,00 1,719,14 1,815,24 1,820,80 1,811,10otal supply
6 7 1 8 0 0 (MT)
Consumptio 1,308,44 1,092,09 1,133,19 1,056,91
n 0 3 0 1 950,800 951,100 (MT)
Exports 492,116 460,914 585,951 758,337 870,000 860,000 (MT)
Total 1,800,55 1,553,00 1,719,14 1,815,24 1,820,80 1,811,10
Demand 6 7 1 8 0 0 (MT)
Source: FAS Madrid estimates.
In 2006, the existing EU support for the dried fodder sector, which initially was fully paid to the
processing industry, was redistributed between growers and the processing industry on a 50/50 basis.
Direct support to growers was integrated into the Single Payment Scheme (SPS), based on their
historical deliveries to the industry and within national support ceilings. The implementation of this
reform coincided with the beginning of Spain?s increasing exports to UAE, which allowed the
processing industry to remain competitive despite of the lower CAP payment received and the weaker
Until MY2011/12 there was a single dried fodder MGQ for the EU-15 of 4,855,900 MT that merged the
previous maximum guaranteed quantities for dehydrated and sun-dried fodder. For the new Member
States, there was a separate MGQ of 104,823 MT. The total EU-25 MGQ is 4,960,723 MT.
The MGQ was split into Guaranteed National Quantities (GNQ) by Member State. Under this system,
penalties were imposed (reductions in aid) if the EU MGQ is exceeded by any Member State for one
year. Penalties are applied in those countries which are responsible for the overrun. If EU dried fodder
production during a given marketing year did not exceed the MGQ, the full aid was paid.
Spanish Dried Fodder Sector Faces New Challenges Page 7 out of 8
Since MY2006/07 the MGQ has not been exceeded so the aid has been fully paid without reductions.
According to Commission Regulation (CE) 707/2011 the final amount of the aid to be paid to
processors for dried fodder in MY2010/11 remained at 33 Euros per MT, since the maximum
guaranteed quantity has not been exceeded. While there are not official data available yet, the same
amount of money is expected to be paid to the processing industries in MY2011/12.
To be granted a production subsidy of 33 ? per MT, the processing industry must have had contracts
with farmers which established price and acreage. In the event that the dehydrating plant had its own
fodder production or acquires fodder from authorized buyers, delivery declarations are required.
Regarding quality standards, fodder to be dehydrated or milled in the plant should have a minimum
moisture content of 25%. The product obtained must have a maximum moisture content of 12% in the
case of sun-dried fodder or dehydrated fodder that had undergone a milling procedure. The maximum
moisture content could be up to 14% for other dehydrated products. In addition, sun-dried fodder
should have undergone a milling procedure within the processing plant to be eligible for the subsidy.
The minimum protein content as compared to dry matter had to be 15%.
From 1 April 2012, the aid for dehydrated fodder scheme will be fully incorporated into the farmer?s
Single Payment Scheme (SPS) and processors will no longer receive the aid. The amount of money to
be paid to farmers via SPS will be based on their historical deliveries. The reference period considered
includes years 2007 and 2008.
Under the SPS farmers receive a set amount per hectare of agricultural land maintained in good
conditions, and not linked to the crop produced. Thus, the decoupling of the subsidy to fodder
production could result in changes in fodder production levels. Planting decisions will be solely based in
market conditions and the dehydrated fodder industry will have the 33 Euros per metric ton less to offer
to farmers. With the integration of fodder payment in the SPS, minimum quality requirements
(including minimum moisture content) will not be mandatory.
At the moment, the aid scheme after 2013 remains to be defined. However, the European structural
deficit of vegetal protein, the environmental benefits of alfalfa cultivation could justify a special
treatment to the fodder sector. For the forthcoming aid scheme, the processing industry defends the
maintenance of specific payments at least partially linked to the implementation of supply contracts
between farmers and the dehydrating industry. They also defend the establishment of minimum amounts
of fodder to be delivered to the processing industry to grant the continuation of their activity.
Spanish Dried Fodder Sector Faces New Challenges Page 8 out of 8