Data revealed in the wake of last month’s Agritechnica exhibition suggests what many in the trade already suspected – that the industry is in for a tough 2016, with investment in new farm equipment expected to remain at the levels seen during 2015. But there is some hope that the deepest part of the recession may have been reached.
Sales of tractors and farm equipment of all types fell across all major European countries during 2015, with the UK market among the worst hit, suffering a collective drop across all product categories likely to total 15% by the year end, while other big markets such as Germany are expected to fall 10%. That’s according to CEMA, the European body which represents farm equipment makers. It says tractor sales are down in all European markets, and that the estimated consequence is a 7.1% overall decrease in the total market. But while demand is expected to remain low during 2016, some countries will at least benefit from market stability, CEMA suggests.
While further slight market decline is anticipated in France and Germany, it’s anticipated that demand will stabilise in the UK and in Italy. Brighter prospects include Spain, which enjoyed a 6% growth in demand during 2015 and, it is expected, will benefit from a further small increase during 2016.
The European combine market for 2015 is reckoned to be down by 5%, hit by lower sales in the UK, France, Spain and the Netherlands, although brighter spots included Germany and Italy, and sales levels are expected to have bottomed out, with no further significant drop expected during 2016. Other significant cost items such as round and large square balers suffered big sales falls during 2015, particularly in the UK and France, but there is brighter news regarding sprayers, with an increase in demand anticipated next year across most European countries.
Meanwhile, a survey of more than 5,000 visitors to Agritechnica revealed that 71% of those questioned plan to make business investments during 2016-17, a drop of 4% since the last show. The proportion of those surveyed who plan to replace machinery over the same period also fell, from 57% to 52%. Some 8% of visitors suggested they had no investment plans in the next two years, up from 5% in 2013.
With almost three-quarters of the visitors to the show estimated to have come from Germany, the survey samples may have been slightly skewed, but it does provide a good indication of where the industry is heading this year, suggests the DLG, which organises the show and commissioned the surveys. It also provided data on the average enterprise size of farmer visitors, which gives some idea of the growth in farm sizes. Some 8% of visitors surveyed said they farmed over 2,001ha, a figure 2% up on 2013, while the proportion of visitors who farm 301-500ha, 501-1,000ha and 1,001-2,000ha was up 1% in each bracket, to respectively account for 8%, 6% and 5% of total visitors. The majority of visitors (30%) farmed 101-300ha, up from 28% in 2013.