Agrishow: record harvest generates optimism in manufacturers – 01/05/2023 – Market

The reduction of the effects of the War in Ukraine and the pandemic on the prices of inputs and the production of electronic components and the record grain harvest in Brazil generate optimism among some of the main manufacturers of tractors and machines in the world.

If in recent years there were companies that spoke of a period of up to eight months for the delivery of machines due to waiting for the arrival of chips –and today almost all of them depend on these components–, currently the market claims that, when there is, the lead time waiting for equipment to be delivered has been reduced. But, as there are exceptions, the factories say that the rural producer has to plan to buy the machine at the right time to use it for planting or harvesting.

The Agrishow (International Fair of Agricultural Technology in Action) is forecast to negotiate more than the R$ 11.243 billion of last year in agricultural, irrigation and storage machines (R$ 11.77 billion, in updated values). 190 thousand visitors are expected.

In addition to seeing sales to Brazilian producers grow, there are brands that plan to sell more in South America as well.

John Deere expects to increase sales by up to 5% for tractors and harvesters in South America, with Brazil being the driver of this growth, according to the manufacturer’s sales director in Brazil, Marcelo Lopes.

He stated that the Covid-19 pandemic and the war between Russia and Ukraine had a strong impact on the entire logistics chain in many sectors and that several companies are looking for alternatives to maintain balance in this global scenario.

“For us and for the customers, the advance planning of investments and negotiations has become fundamental for the viability of the operations and for the availability of products. specific equipment requires an advance purchase decision. On the other hand, in many cases, we have good conditions to offer products for immediate delivery”, he said.

The vice-president of New Holland Agriculture for Latin America, Eduardo Kerbauy, said he was in line with Anfavea (National Association of Motor Vehicle Manufacturers) projections of a 3.5% reduction in sales compared to the previous year, but that this is not bad given the strong demand of recent years.

“Sales are as expected. According to Anfavea’s projections, the sales volume of the agricultural machinery industry should be a little lower compared to last year. positive. After all, the national agribusiness continues with appetite and has the perspective of a new record harvest of grains, which should continue to demand the machinery industry”, he said.

Conab (Companhia Nacional de Abastecimento) estimated that the 2022/23 grain harvest will be 312.5 million tons, which means 15% more than in the 2021/22 period. The expected increase in the planted area is 3.3%, which means that the strong growth is due to increased productivity in crops.

Kerbauy said that the mismatches in the supply chain caused by the war and the pandemic are being resolved and that there are occasional problems with delays in the delivery of components.

“The delivery time varies according to the product. Those with a higher rate of nationalization of parts have suffered fewer delays than products whose components are manufactured mostly in other countries, for example.”

These same mismatches resulted in a delay in the delivery of machines in 2021 and last year at Case IH, according to the company’s marketing and communication director for Latin America, Eduardo Penha. The brand did not report the sales projection for this year as it is listed on the Stock Exchange, according to him.

“We invested in several actions such as greater diversification of suppliers and other alternatives for logistics. For this year, we have practically reached normality and we have almost no shortage of components. we have adjusted their stock levels and have products ready for delivery, already thinking about the upcoming pre-planting period.”

At Massey Ferguson, the growth projection is 2.4%, in line with Abimaq (Brazilian Association of Machinery and Equipment Industry), according to sales director, Alexandre Stucchi.

He said this is due to the projection of a new record in grain production and a drop in input costs. “Given this scenario, farmers now have a better view of their profitability in order to invest in new equipment.”

As with other manufacturers, there was an improvement in the supply chain of raw material components over the past year, but Stucchi said there was instability in some suppliers, which tends to decrease from the second half.

“To minimize dependence on imported components, we have expanded our supply chain and are developing new ones, national and international. Our strategy is to have an optimized number of suppliers, with a very close relationship in terms of capacity, productivity, competitiveness, quality and development of new solutions and technologies,” he said.

UP IN THE AIR

The sector’s optimism in view of the projection of a record grain harvest is reflected not only in expectations for sales of tractors, planters and harvesters, but also in sectors such as aviation.

Embraer, maker of the Ipanema agricultural plane (powered by ethanol), sold 33 units in the first three months of the year alone, 38% more than the 24 aircraft sold in the same period last year.

The manufacturer says it expects to end the year with sales similar to or better than those of 2022, when 66 planes were sold. New orders from now on, according to Embraer, will enter the 2024 production and delivery planning.

The fair will have 800 national and foreign brands exhibited in an area of ​​530 thousand square meters, where the producer will be able to compare the machines of the most varied companies, see the operation in the field demonstrations and finance in his bank within the event itself. 190 thousand visitors are expected until Friday (5).

The Agrishow is held at km 321 of the Antônio Duarte Nogueira highway, in Ribeirão Preto, from 9 am to 6 pm.