The record of turnover of the agro-equipment sector is beaten! In these complicated times, the VDMA, the association of German manufacturers, has just announced more than 12 billion euros in turnover in 2022. That is a significant increase of 18% in sales recorded by the VDMA versus the previous year.
Dr. Tobias Ehrhard, Managing Director of the VDMA, explains: “We have thus succeeded for the first time in achieving an industrial turnover of more than 12 billion euros. THE innovative agricultural machinery are in demand at home and abroad as seldom before, as it is an indispensable element to ensure security of supply worldwide. A factor that matters right now.”
Producer prices at the next level
Good producer prices in almost all agricultural segments, especially for milk and wheat, have fueled demand for technology from farmers and entrepreneurs everywhere. In recent months, producers have flocked to world markets. For the time being, it is difficult to predict whether this trend will continue, given the possible speculative effects on the commodity markets.
Orders from Russia and Ukraine were lost following the war between the two countries. A loss globally more than compensated. “In North and South America in particular, but also in the main markets of Western Europe, the good cash position of the farms triggered buying impulses,” says Ehrhard.
Positive currency effects
German manufacturers, as production sites, also benefited from positive exchange rate effects. The sharp devaluation of the euro, accompanied by an appreciation of the dollar, led to a sharp increase in the value of exports to the United States. Similar effects were observed for agricultural production in the euro zone.
Bottlenecks in supply and logistics, on the other hand, have caused persistent frictions on a global scale of the sector. Their resolutions have only been progressive. “Since the end of 2022, the situation has calmed down slowly but surely. In the last quarter, sales jumped by 50% thanks to less strained logistics,” emphasizes Ehrhard.
Order books are full
Suffice to say that the orders are not lacking at the moment. The order books are full, which offers good prospects: “The challenge lies above all in the consistent implementation of the high order books. The whole industry is working hard on this,” summarizes Dr. Ehrhard. However, the tight cost situation of agricultural enterprises remains to be observed. The exceptionally high prices of inputs, fertilizers and phytosanitary products, for example, do not make life easier for farmers. We can also expect significant volatility on the basic production markets, combined with geopolitical uncertainties.
