Yes, this industry has a bright future as it can provide solutions for many hot topics like the growing demand for quality food and renewable energy. This was the tenor of the impressing line-up of speakers at the CEMA Economic Forum which presented their views on the future market development for agricultural machinery in the different parts of the world.
All speakers were optimistic about the mid- to long-term perspectives of the agricultural machinery industry. However, the short term-outlook for 2010 was strongly influenced by the global economic crisis and the negative effect on demand and prices for food and biofuels. Nan-Dirk Mulder from Rabobank’s Food and Agribusiness Research focused his optimism on the need to raise yield in agriculture. He predicted an increase in global farm equipment demand of 40% within the next 10 years, mainly driven by Asian farming.
Michael Schmitz, Professor for agricultural politics at the University of Giessen (Germany) had a close look at Europe’s Common Agricultural Policy (CAP) and its future. He predicted cuttings in direct payments, the abolition of export subsidies and a higher price volatility. He nevertheless saw comparative advantages for the EU in producing and exporting quality food and accordingly a need for farmers to invest in cost reduction via improved mechanization.
Ingvald Loyning, CEO and President of Kverneland, described his companies approach to the growing markets in Eastern Europe, which has been hit extremely hard by the financial and economic crisis. He saw optimism coming back slowly, but pointed out that the question of financing remains the key for the return to growth in that region.
Gary Collar, AGCO’s Senior Vice-President in charge of Europe, Africa, Middle-East, Australia & New Zealand, also identified financing as one key topic. He saw the success of the agricultural machinery industry depending on the ability to offer solutions for challenges like a slipping financial support to EU farmers, lower use of pesticides, higher energy efficiency and a stronger protection of soil and water resources.
John Hickman, Economist of John Deere, provided an outlook on the North American agricultural economy in 2010 and the renewable energy production in the Americas. He reported that soon the US domestic ethanol production would reach 10% of the gasoline consumption.
CEMA members can download all presentations of the event from the CEMA website.
