From November 9 to 13, the EIMA trade show, a worldwide reference point for all operators gravitating around the agricultural mechanization and farming sector, was held in Bologna.
The economic crises that have hit the global economy over the past two years have failed to stop the development process of agricultural mechanization. In fact, according to data released at the event, sales of agricultural mechanization equipment have maintained good levels over the past two and a half years, marked by the severe economic crises following the Covid-19 pandemic and the Russian-Ukrainian war. In the nine months between January and September 2022, the market remained at higher volumes than before the pandemic, although between the end of this year and the first part of 2023 the sector is set to be affected by inflation and geopolitical uncertainty.
In 2021 there was a marked revival, with conspicuous increases in the United States (+10%), India (+13%) and Europe (+16,6%), an expansive phase from which China, still grappling with the health emergency and related restrictions, as well as a poor domestic economy, remained excluded. Overall, the agricultural machinery market marked an increase of about 13% in 2021 (ICE data).
Looking at the international markets of greatest interest to Italian companies, the United States of America is the leading nation in terms of technology quality and is one of the leading markets as sales value.
Looking at the performance of the U.S. market in recent years, sales of tractors and self-propelled machinery reached $11.9 billion in 2019, a 5% growth over 2018, while equipment touched $5.1 billion (-1,8%), for a total value of $17 billion. Also in 2019, the average investment in agricultural machinery exceeded $8,400 per company. 2020 saw further growth. In fact, according to data from the AEM (the U.S. Agricultural Equipment Manufacturers Association), between January and October 2020, sales of tractors exceeded 247,000 units (up 15% over the same period last year), while combines stood at 4,333 units (up 5,5%). These are substantial increases, accrued in a period in which the health emergency has greatly affected economic activities (FederUnacoma data).
During these months of crisis, the U.S. market benefited from $37 billion in federal aid (+68% over 2019), which increased the spending capacity of farms. According to the vast majority of U.S. dealers (vendor sentiment is a reliable indicator about industry trends), the value of sales is expected to remain stable or grow further over 2020. Highlighted above all are tractors, one of the strengths of the U.S. market, but the shortlist of technologies demanded by farmers is very wide. The Italian industry can leverage precisely on the demand for specific technologies for the different American production contexts. Moreover, Italian manufacturers are already present in the U.S. with important export volumes (with 486 million euros in 2019 alone, the U.S. is the third largest destination market for domestic agricultural machinery exports).
It is precisely exports that are the driving force behind the good prospects that entrepreneurs see, even in the face of the negative signs that dot the statistics on registrations of tractors, combines, trailers, and lifts not only in Italy, but in Europe, the U.S., and India, and concerns about energy costs, inflation, and restrictive policies: in the seven months between January and July 2022, compared to the same period last year, Italian agromechanical exports increased by 10,4% in value.
America represents the dream, in the Italian imagination, of a land full of opportunities, but to seize them, one must be well prepared: the business sense in the States is, in some respects, very different from that in Europe.
It is precisely with Italy, however, that the United States has a privileged relationship: the Americans hold a special predilection for certain categories of Italian products, and it is no coincidence that the U.S. represents one of the most favorable markets for Made in Italy exports.
Federico Rubini
