MILWAUKEE, Wis. — U.S. agricultural equipment exports dropped 27 percent during the first half of 2014, with $4.77 billion in exports shipped to global markets – compared to $6.53 billion at first-half 2013 – according to the Assoc. of Equipment Manufacturers (AEM).
"With good crop harvest predicted in many parts of the world, the world stocks are increasing and driving the prices lower," said Charlie O’Brien, AEM senior vice president and agriculture sector leader. "As with the U.S., crop prices drive farm income, which is ultimately reflected in equipment sales.
"We are seeing this softening grain price impact in Europe, a key trading partner with the U.S. Additionally, import policies in CIS (Commonwealth of Independent States, which are the former Soviet Republics) are negatively affecting the high-value combine sales in this region."
Located in Milwaukee, the AEM, an off-road equipment manufacturing trade group, produces global trends reports using U.S. Commerce Department data to assist members’ business planning. For first-quarter 2014, U.S. agricultural machinery exports totaled $2.185 billion, compared to $3.04 billion in the first quarter of 2013 – a decline of 28.1 percent, AEM reported in June.
In its latest report, released on Sept. 5, it stated all world regions experienced declines, from South America with a drop of 8 percent, to Asia with a 35.7 percent decrease, in purchases of U.S.-made agricultural machinery.
At mid-year 2014, exports of agricultural machinery to Europe declined 26.9 percent compared to first-half 2013, for a total $1.21 billion, and exports to Canada dropped 34.3 percent to total $1.55 billion, the AEM added.
Moreover, exports to Asia declined 35.7 percent to $420.7 million for the first half of 2014. Mid-year exports to Central America decreased 12.5 percent to $528 million, and exports to South America declined 8 percent to $528.5 million.
In addition, Australia/Oceania’s agricultural equipment export purchases dropped 22 percent for a total $360.9 million, and African nations took delivery of $168.7 million worth of agricultural equipment, a 23.4-percent decrease, the AEM report stated.
After nearly 40 years in the agricultural mechanization business, Kinze Manufacturing, Inc. in Williamsburg, Iowa, a U.S. farm equipment manufacturer that specializes in row crop planters and grain auger carts, continues to expand its international market.
Brooke LaTour, account director at Karwoski and Courage Public Relations in Minneapolis. Minn., which represents Kinze, said the eastern Iowa company opened its first production plant abroad in Lithuania last year to support its growing customer base in Eastern Europe.
"The facility manufactures Kinze row crop planters, contributing to its growing market in neighboring countries, including Russia, Ukraine, Czech Republic, Bulgaria and Hungary," she said, adding that political unrest and the ability of farmers to secure credit is one factor having an effect on exports.
According to the AEM, the top countries buying U.S.-made agricultural machinery for the first half of 2014 were: Canada at $1.55 billion, down 34.3 percent; Mexico at $442.6 million, down 15.1 percent; Australia at $321.9 million, down 24.9 percent; Brazil at $230.1 million, down 11.9 percent; China at $208.5 million, down 27.8 percent; Germany at $175 million, down 36.2 percent; Russia at $154.9 million, down 15.6 percent; Ukraine at $144.1 million, down 0.3 percent; France at $116.2 million, down 40.8 percent; and South Africa at $113.6 million, down 27.1 percent.
Despite nearly $7 billion in sales at mid-year 2013, the AEM said exports of U.S. agricultural equipment dropped 6 percent last year compared to 2012, with had a total $12 billion shipped to global markets. The AEM added the decrease followed three years of export growth (16 percent in 2012, 23 percent in 2011 and 12 percent in 2010), after a 2009 decline of 23 percent during the recession.
Conversely, in its latest monthly Flash Report released on Sept. 11, the AEM said the sale of all tractors in the United States for August 2014 was up 2 percent, compared to the same month last year. In the same report, the AEM said the sale of all tractors domestically for August were up 2 percent, compared to the same month last year.
