1/25/2012News Releases
Worldwide demand for agricultural machinery remains at high level
While prospects for the global economy are still volatile, overall the agricultural machinery industry continues to be optimistic that in 2012 key markets for agricultural machinery, including tractors, will remain at an overall high level, according to a gathering last month of the world’s largest agricultural machinery associations.
The North America-based Association of Equipment Manufacturers (AEM) participated in the event, which was the annual meeting of the Agrievolution Economic Working Group, held at the EIMA Agrimach exhibition in New Delhi, India.
The global production volume of agricultural machinery for 2011 increased to $98 billion and could rise by another five to eight percent in 2012, according to preliminary estimates from the meeting.
Charlie O'Brien, AEM's vice president agriculture sector, noted that trends in both emerging and industrialized regions have contributed to the positive numbers. "Many newly industrialized countries are working toward increased agricultural mechanization; in developed regions such as North America and Western Europe, the trend is toward more precision farming, and demand is for the latest technologies and innovations that improve operating efficiencies," O’Brien stated.
Organizer of the Agrievolution working group, the German VDMA Agricultural Machinery Association, compiled an overview, including the following look at non-U.S. markets:
For the European Union, the outlook for 2012 still appears very positive overall, in light of good harvest revenues and higher prices for milk, as well as the fact that financing opportunities for new agricultural machinery can continue to be characterized as good. Nevertheless, following above-average growth in 2011, a few markets are declining somewhat. This is the expectation for the German market; as the second major market in Europe, France could remain at its present level; and for the Italian market, there are indications that the present downturn will continue.
For the eastern part of the European Union, the new member states continue to have high investment requirements for agricultural machinery, and if there are slightly increasing subsidies per hectare in the medium term, expectations for new and used machinery sales remain high.
In Japan, slight growth is again being seen; the forecast for the 2012 tractor market amounts to an increase of seven percent.
For China, 2012 growth is expected of 10 percent. This trend is assisted by considerable government support. In Brazil, the forecast for 2012 is an increase of 10 percent. It is reported that the national development bank is maintaining its favorable credit conditions for the sector.
For India, there is increasing demand for larger machinery on the part of individual investors and machinery cooperatives which cultivate the parcels of land of entire village communities.
About the Agrievolution Working Group
The Agrievolution Economic Working Group is co-ordinated by the German VDMA Agricultural Machinery Association and is composed of representatives of 12 national agricultural machinery associations (from Brazil, China, France, Germany, India, Italy, Japan, Russia, South Korea, Turkey, United States and United Kingdom) as well as the European umbrella organization CEMA). The working group was founded in 2009 and promotes exchange of market information for agricultural machinery at an international level.
About the Association of Equipment Manufacturers (AEM)
AEM is the North American-based international trade group providing innovative business development resources to advance the off-road equipment manufacturing industry in the global marketplace. AEM membership comprises more than 800 companies and 200-plus product lines in the agriculture, construction, forestry, mining and utility sectors worldwide. AEM is headquartered in Milwaukee, Wisconsin, with offices in the capitals of Washington, D.C., Ottawa, Beijing and a European presence in Brussels.
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