Germany and China are the largest external suppliers of farm equipment and machinery in the United States, according to data from the International Trade Commission (USITC).
The first place is occupied by Germany, with sales to the US market of 1.62 billion dollars in the period from January to August 2021, an increase of 37.5% year-on-year.
Although in the second position, the corresponding exports from China, for 1,006 million dollars, grew 50.7%, in the same comparison.
Below and immediately were Canada, which had a rise of 32.6%, to 991 million dollars, and Japan, whose sales rose 50.2%, to 939 million dollars.
Dairy, rancher, and row crop farm operators, as well as the independent contractors who service such farms, purchase most farm equipment.
Likewise, the CNH Industrial company reports that row crop farmers generally buy tractors in the mid to upper range of horsepower (hp), combines and harvesting equipment and crop production equipment.
For their part, dairy and livestock producers often use tractors in the medium to low horsepower range and implements for preparing and packing crops.
CNH Industrial competes with Deere & Company, AGCO Corporation, Claas Group, Argo Tractors S.p.A., the Same Deutz Fahr Group, and Kubota Tractor Corporation.
The key factors influencing farm equipment sales are the level of net farm income and, to a lesser extent, general economic conditions, interest rates and the availability of related financing and subsidy programs, farmland prices and levels of agricultural debt.
Other external suppliers of agricultural equipment and machinery in the United States are: South Korea (592 million dollars from January to August 2021 and an increase of 67.2%), Mexico (560 million, 30.1% more) and Italy (514 million and an increase of 38 percent).
Globally, government agricultural programs, including the amount and timing of government payments, are a key income driver for farmers growing certain commodities in the United States and the European Union.
The existence of a high level of subsidies in these markets for agricultural equipment reduces the effects of cyclicality in the agricultural equipment business.
The effect of these subsidies on the demand for agricultural equipment is largely dependent on the United States Farm Bill and programs administered by the United States Department of Agriculture, the Common Agricultural Policy of the European Union, and the negotiations of the United States. the World Trade Organization.
In addition, the Brazilian government subsidizes the purchase of agricultural equipment through low-rate financing programs administered by the National Bank for Economic and Social Development (BNDES). These programs have a significant influence on sales.