united arab emirates saudia arabia a market for manitoba hay

1. 1 United Arab Emirates & Saudia Arabia – A Market for Manitoba Hay Glenn Friesen Manitoba Agriculture, Food & Rural Initiatives Feb 17, 2010

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5. 5 World Forage Importers(2007 – FAOSTATS) Japan Korea United Arab Emirates China Switzerland USA Germany Canada France Portugal

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7. 7 Canada: the rail lines are responsible to get that container back to port ASAP – because they are paying for empty lease cost. US: container can travel anywhere for various uses – because companies are responsible for the container maximize its use and return on investment.Canada: the rail lines are responsible to get that container back to port ASAP – because they are paying for empty lease cost. US: container can travel anywhere for various uses – because companies are responsible for the container maximize its use and return on investment.

8. 8 Canadian Exports. Largest markets highlighted.Canadian Exports. Largest markets highlighted.

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14. 14 United Arab Emirates Oil-rich country comprised of 7 emirates (provinces). Abu Dhabi leader is President Dubai leader is Prime Minister Total area: 20 M acres (80% desert) Population: 6 M (20% nationals) 88% urban Official language: Arabic English is widely spoken. Corruption Rating: 30th of 181 (Canada 14th) Dubai is the largest city with 1.6 M people.Dubai is the largest city with 1.6 M people.

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16. 16 United Arab Emirates Agricultural land base: 610,000ac (Cdn 167M, Spain 18M) 173,000ac cultivated land: 24% vegetables, 30% fruit, 10% feed crops, and 36% for other uses. 41 Ag extension offices, & multiple research stations. Farm numbers rose from 4,000 in 1970’s to 18,265 in 1988 Main commodities: 600,000 tons of crops tomatoes, cucumbers, egg plant, lettuce, cabbage, dates, vegetables, watermelons; poultry, eggs, dairy products, fish. Cereals: wheat, barley, maize, rye, oats, millet, Self-sufficient in salad crops & poultry and exports crops to markets in Europe…. Self-sufficient in salad crops & poultry and exports crops to markets in Europe.Self-sufficient in salad crops & poultry and exports crops to markets in Europe.

17. 17 United Arab Emirates UAE's existing production capacity and ability to meet their current requirements for hay remains minimal In 2003, the UAE grew: 0.2 Mt wet alfalfa on 7,000ac (4.3t/ac) 2.86 Mt wet green fodder on 75,000ac (5.6t/ac) Ag sectors account for up to 85% of water consumption. Livestock production has seen dramatic growth Forage & cereal prod’n is 100% dependent on ground water irrigation. Self-sufficient in salad crops & poultry and exports crops to markets in Europe. The desalination process itself - of vital importance to the Gulf, which houses the vast majority of the world’s installations - went through a major transformation around the turn of the century. “In 1999 or 2000,” says Allan, “we saw a change [in desalination techniques] which saw the price of desalinated water drop to 60 cents a liter from $2.50 ten years ago and from $5 20 years ago. Self-sufficient in salad crops & poultry and exports crops to markets in Europe. The desalination process itself - of vital importance to the Gulf, which houses the vast majority of the world’s installations - went through a major transformation around the turn of the century. “In 1999 or 2000,” says Allan, “we saw a change [in desalination techniques] which saw the price of desalinated water drop to 60 cents a liter from $2.50 ten years ago and from $5 20 years ago.

18. 18 United Arab Emirates Water conservation techniques are in full effect. Reduced uses Retention dams Geological surveys (monitoring use levels) UAE investing in water & crop production Domestic production – research ongoing (salt water irrigation) Foreign production – in progress. Development in West Africa, some investment in US. Virtually no testing on animal nutrition….. Desalination will provide the majority of irrigation water: 1980 $5/litre 1990 $2.50/litre 2000 $0.60/litre Self-sufficient in salad crops & poultry and exports crops to markets in Europe. Desalination will provide the majority of irrigation water. Self-sufficient in salad crops & poultry and exports crops to markets in Europe. Desalination will provide the majority of irrigation water.

19. 19 United Arab Emirates Government Tender January 2007/08, 2008/09, 2009/10 ~600,000t/yr alfalfa, + ~200,000t/yr grass. 396,000t from US 150,000 from Spain Aug/2010 cease irrigation subsidy for Rhodes Grass (5-6%CP). additional 600,000t grass. 2 Major companies (Jenaan, Al Dharra,) GRM (Australia) contracted to set up “Farm Service Center” Expected to rise to 2-3Mt/yr in 5 years.

20. 20 Current Demand - UAE Feed type: High quality alfalfa hay Some Timothy hay Pellets, cubes? Grass seed straw (no endophytes?) Livestock Primary: general farm livestock (camel, sheep, goats) Falling conception & live birth rates Secondary: Expensive Arabian race horses, Recreational horses Bovine dairy Camel dairy – low fat, high value

21. 21 United Arab Emirates Requested specs for dairy quality alfalfa 25,000MT Crude Protein 16% ADF 32% Max Moisture 12% No soil contaminants 10,000MT Crude protein 18%min ADF 30%max high proportions of leave thin stem intense green color typical hay odor flowering    10% max Moisture 20%max   34-35 days sailing time from North America to Dubai. Up to 60 days if you go cheaper routes to South America.34-35 days sailing time from North America to Dubai. Up to 60 days if you go cheaper routes to South America.

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23. 23 Saudi Arabia Strong rumours Saudi is ready to begin importing alfalfa. Already importing wheat and will discontinue prod’n by 2016. Credit arrangements have been made with US banks. 2-5 Mt in next 5 years. Some Timothy - only very top end (Supreme) Some Canadian shipments have not met this quality  Some importers are mis-representing lower quality for Supreme.

24. 24 Other Middle East Markets Kuwait Oman Qatar Kingdom of Bahrain

25. 25 Top Ten World Forage Exporters

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27. 27 Spain Spain: 1997: net importer (0.2-0.3 Mt) 2003/04: net exporter (0.2-0.4 Mt) 10-20% of production. Primarily due to subsidies - equivalent to Canadian farm gate 2006/07: supplied most of UAE tender 480,000t

28. 28 US Exports

29. 29 Exported hay and straw

30. 30 1. For & against

31. 31 Why the Middle East? Global shortage of forage products = real demand Global freight rates coming down and container availability appears to be improving A difficult business to get into Over capacity of processing, but is this competitive processing? Japanese over production of milk Asia looking for cheaper sources of fibre No trade protocol between Canada & China Australia not a preferred supplier - can’t grow alfalfa. US is not a preferred supplier (politically), and may be less competitive because of shifting market needs – more mixes.

32. 32 Caution Inland & ocean freight rates from Canada are still uncompetitive. Questionable players in export & import markets The Global economy Competition for acres of cash crops Exchange Rate??? Uncertain money markets Cheaper protein alternatives available Avoid selling cheap “commodity” feed Only a national voice will compete. #9. spain did it 3 years ago, US 2 years ago, now their reputation is affected. Cheap $$ = poor quality = reduce demand.#9. spain did it 3 years ago, US 2 years ago, now their reputation is affected. Cheap $$ = poor quality = reduce demand.

33. 33 Canadian Forage & Grassland Association Fact Finding Mission March 19-31, 2010 Riyadh, SA and Dubai, UAE. 9 Representatives Ed Shaw, Marc Lavoie, Darren Guidinger, Sarah Sommerfeld, Phil Friesen, Bill Drew, Ray Robertson, Remo Pasteris, Glenn Friesen. Government decision makers, GRM, bovine and camel dairies, race track, hay depots, Bedouin farmers.

34. 34 Thank-you!