Spanish farmers are, in the face of weak grain prices, switching increasingly to hay, and relying on soaring exports to the Middle East to mop up their extra production.

Spain's hay exports to the United Arab Emirates are expected to hit 372,000 tonnes in 2009-10, a jump of 25% year on year, and leagues ahead of the 27,568 tonnes recorded four seasons ago.

The increase puts the UAE way ahead of Spain's European Union neighbours, historically the biggest buyers of Iberian hay.

And it reflects a quest by Spanish farmers, already the EU's biggest hay exporters, for a reliable alternative to cereals, whose weak prices have been made them particularly unappealing in country where yields often fall victim to dry weather.

Climactic advantage 

"Spain's warm and dry climate is more favourable than other EU states for the dehydration process," a report from the US Department of Agriculture's Madrid bureau said.

And the need to find export markets was being driven by declines in Spain's dairy herd, the biggest domestic consumer, which has shrunk by 13.1% to 853,000 head over the last three years.

"Spanish producers see the growth in third-country exports as a solution to balancing their supply-demand situation," the briefing said.

Dairy in the desert 

Many Middle Eastern countries have, despite an arid landscape, created large dairy businesses to improve levels of self sufficiency in food, operations which have necessitated large imports of feed.

Saudi Arabia, home of dairy giant Alamarai, is the world's biggest barley importer.

However, the USDA report flagged a potential threat to Spain's dried fodder industry through reforms of Europe's agriculture subsidy, which will revise the terms of support which currently pays hay processors E33 a tonne.