Exports of U.S. agricultural-related equipment topped $5.8 billion by mid-year. That's 30.5% above last year's pace, reports Charlie O'Brien, vice president of agricultural services for the Association of Equipment Manufacturers. AEM is a North American-based international trade group representing the off-road equipment manufacturing industry,
Farm equipment exports have steadily risen higher over the last six to seven years, says O'Brien. "We can't say whether they're setting export records; We don't have enough data. But we do know that, due to the weak U.S. dollar, U.S. machinery is a better deal, more economical compared to European competition," he adds.
Domestic plus export demand is keeping major U.S. manufacturers running on all cylinders. AGCO's second quarter report posted a 24.2% jump in net sales for the first six months of 2008, compared to the same period in 2007.
CNH reported record second-quarter 2008 earnings with ag industry sales up 29%. Deere and Company reported worldwide net sales up 17% for the first nine months, and projects a 38% increase in worldwide ag equipment sales for the year.
What's selling like 'hot cakes'
The above corporate reports mirror what O'Brien says: "Large tractors – above 100 horsepower, four-wheel drive tractors and large combines are in heaviest demand. That's why Deere plans to expand high-horsepower tractor production capacity by 25% and raise its harvesting equipment manufacturing capacity by 30%.
"We continue to see global demand for equipment as producers around the world seek to enhance their productivity to meet the food needs of populations in both developed and developing countries, and the need to develop renewable energy resources worldwide," he added.
The top 10 export destinations for U.S. farm machinery for the first half of 2008 were:
(1) Canada: $1.55 billion, up 35%;
(2) Russia: $456 million, up 63%;
(3) Germany: $331 million, up 25%;
(4) Australia: $305.5 million, up 97%;
(5) Mexico: $305 million, up 9%;
(6) France: $244 million, up 23%;
(7) Ukraine: $243 million, up 71%;
(8) United Kingdom: $233 million, up 25%;
(9) Belgium: $179 million, down 2%;
(10) Kazakhstan: $156 million, up 56%.