EU ag machinery sales to fall even faster in 2015

The decline in machinery sales to European Union arable farmers will accelerate this year, thanks to weak demand from France and Germany, the bloc's top two agricultural economies, industry group Cema said.

Cema said that sales of arable farm equipment, such as seed drills and sprayers, dropped by 5% to E3.6bn last year, with sales of cultivation machinery particularly soft.

And the group - a European association of national agricultural machinery groups, whose members include businesses such as JCB, John Deere, and New Holland - forecast a further drop in volumes 2015, by some 7%.

"At the moment, few markets in Europe are displaying growth signals," said Gerd Wiesendorfer, co-ordinator of the Cema product group.

Weak demand

Indeed, the association highlighted "continuously weaker demand in France", the EU's top grower of grains such as corn and wheat, besides the emergence of a "downward trend" in second-ranked Germany too.

The two countries combined account for more than 35% of overall EU sales of farm equipment.

"The outlook for the Russian market, which had performed comparatively well for certain companies in 2014, is also less positive," Cema said.

Earlier this month, Ekotechnika Group, one of the biggest farm machinery dealers in Russia, unveiled a restructuring in the face of growing losses, blamed on "marked deterioration in... [market] conditions resulting from the depreciation of the Russian rouble and the massive increase in financing costs". 

Sobering forecasts

The agricultural machinery industry worldwide has noted a slowdown, with 2015 already seeing sobering forecasts from a number of equipment sellers and manufacturers, including CNH, the maker of New Holland tractors, and Agco, the owner of the Massey Ferguson marque.

However, thanks to low crop prices, arable farm machinery markets have been particularly hard hit.

"In line with the overall trend observed for agricultural machinery in Europe, sales of soil working, sowing, fertilizing and plant protection equipment are declining," Cema said.

Some agricultural machinery sectors are seeing more robust demand, with the group noting a "trend towards high-end spraying equipment", which improve the accuracy of applications, and so can save on input costs.

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