Farmer Iron
Looking Ahead at Global Farm Equipment Market

Looking Ahead at Global Farm Equipment Market

Worldwide network of ag machinery associations are optimistic about the future.

During Agritechnica recently the Agrievolution Alliance released its eighth survey among manufacturers and importers of machines. From the report, more than half responding say the business situation is good or very good, pushing the Agritech Business Climate index up three points. The group notes that global equipment sales should rise as much as 7% in 2014, good news for a market that may be feeling a bit of a pinch with sliding crop prices into the new year.

BUSINESS CLIMATE: According to this chart from Agrievolution, an industry alliance, global equipment makers remain positive about the future.

According to the report, the perspective on farm equipment does remain positive, with sales up over the last three months in most markets compared to a relatively flat first half of the year. As Europe gets its financial house in order that may help stabilize that part of the market going forward as well, but the report shows that some parts of that market remain soft - France and Poland - or flat - U.K, Spain, Germany and Italy.

As is often true with this kind of report, the good news will happen in new markets - China, Brazil and Turkey are reported to show potentially above average growth.

One aspect of the report that is of interest is the attention given to automation, or technology. Farmers see the need to mechanize labor intensive chores - especially in those developing markets - which offers manufacturers some opportunities. Even in labor-intensive economies, food production is moving toward mechanization to make production more economically competitive.

The report points to mechanization in both field crops and in animal housing. A trip around the Agritechnica show floor would be enough to convince anyone that the market is looking for ways to mechanize, or automate, processes. And in some cases with actual robots - at least two were on hand at the show, the Agrobot and an automated tool from Kverneland. It's that kind of innovation that many farmers, no matter what the market, will find of value as the changing global labor picture evolves.

While the U.S. is seeing softer crop prices, the global sales picture for farm equipment appears to be stronger - and all those big players you buy from here are global players. The chart below shows that business climate index, which remains above the 0 baseline, which shows optimism going into 2014.

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