Exports of U.S.-made agricultural equipment declined 15.8 percent for the first three quarters of 2015 compared to January-September 2014, for a total $5.8 billion shipped worldwide.
Asia recorded double-digit gains, however, while South America and Europe had the steepest declines, according to the Association of Equipment Manufacturers (AEM). The AEM equipment manufacturing trade group cited U.S. Department of Commerce data it uses in global market reports for members.
Exports by World Region
January-September 2015 U.S. agricultural equipment exports by major world regions compared to January-September 2014:
• Canada dropped 19 percent, for a total $1.8 billion
• Europe declined 28 percent, for a total $1.2 billion
• Central America gained 4 percent, for a total $844 million
• Asia gained 21 percent, for a total $738 million
• Australia/Oceania fell 3 percent for a total $539 million
• South America dropped 34 percent, for a total $521 million
• Africa decreased 26 percent, for a total $198 million
AEM Market Analysis Overview
AEM's Benjamin Duyck, director of market intelligence, provides some insights:
The third quarter of 2015 marked the 7th consecutive quarter that U.S. agricultural equipment exports and imports experienced year over year declines. These results are in line with the domestic and global demand trends.
AEM's third quarter North American ag equipment industry conditions trends report initial results indicated that 76.75 percent of respondents felt demand had fallen compared to the same period the previous year.
Only 13.95 percent of respondents felt demand had remained unchanged. That marked the 6th quarter that more people felt the market demand was decreasing vs. increasing. Also, according to the survey, 55.2 percent of exporters felt their exports had fallen year over year while 31.5 percent felt they had remained unchanged.
From a global perspective, our Agritech Business Barometer, a report from the Agrievolution Alliance, indicated that agricultural equipment manufacturers still remain pessimistic. However, there were some variations between regions. North America and South America, namely the U.S. and Brazil, continue to experience a strong downturn as new orders fall short.
Additionally, Brazil is also struggling with strong credit restraints. Eastern markets such as Russia, China and India seem to be in a better mood, driven by optimism regarding government support. Optimism in the eastern markets seems to be supported by the double digit uptick in exports to these markets.
The deteriorating export position does not only pertain to the agricultural machinery industry, but also to the larger goods market. In November, overall U.S. exports experienced a bump that was driven mainly by the service economy as that sub-segment is less impacted by the strong dollar.
The overal export of goods was actually down 8 percent from a July 2014 peak. Aside from a strong U.S. dollar, the lower commodity prices are taking a toll on worldwide farm income, profitability and thus exports.
Exports by Top 10 Countries
The top countries buying the most U.S.-made agricultural machinery during the first three quarters of 2015 (by dollar volume) were:
1. Canada - $1.8 billion, down 19 percent
2. Mexico - $737 million, up 8 percent
3. Australia - $473 million, down 3 percent
4. China - $418 million, up 47 percent
5. Germany - $196 million, down 20 percent
6. Brazil - $172 million, down 49 percent
7. France - $147 million, down 12 percent
8. United Kingdom - $129 million, down 5 percent
9. South Africa - $127 million, down 31 percent
10. Belgium - $122 million, up 6 percent
Economic Resources Available
AEM's Agricultural Equipment Global Markets Export report and select other reports are available to the public through the AEM store (www.safetymaterials.org). AEM members may access the global markets export report and the Agrievolution report on the AEM website (www.aem.org) in Market Intelligence section.
Custom detailing exports by 10 Digit HS code to various countries worldwide, as well as an overview of export market opportunities by product, are available to members on request. For more information, contact AEM's Benjamin Duyck, director of market intelligence (bduyck@aem.org).