News: Agricultural

2020-10-23

Global Recovery: Opportunities and Challenges

SUMMARY. The global economy, especially within the Engine, OEM and Components industries, has felt the immediate impact from COVID: assembly line shutdowns, labor issues, supply chain issues, logistics and transportation to name a few.  The pandemic has exposed many weak links in the global economic chain. However, by end of summer, most of these challenges were either completely resolved or temporary solutions had been put in place. 

Yosyf Sheremeta
Yosyf Sheremeta

Diversification has become the theme during the pandemic recovery, and we expect this trend to continue.  Not only are companies looking for new markets and suppliers to grow top and bottom line revenue as well as to minimize risks, but we see a shift into new industries.  Furthermore, rapid developments of new technologies create massive opportunities for OEMs and suppliers as well as posing real threats to OEMs that solely rely on traditional products that are powered by fossil fuels. 

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2020-09-27

DATAPOINT: US Combines, 2020 NA Production Forecast–6,300 units

The 6,300 units is the estimate by Power Systems Research of the number Combines to be produced in the U.S. in 2020.

This information comes from industry interviews and from two proprietary databases maintained by Power Systems Research: EnginLink™ , which provides information on engines, and OE Link™, a database of equipment manufacturers.

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2020-08-23

Expansion of “Amkodor-Onego” Plant Started

Currently construction at the plan includes rebuilding of warehouses and administrative buildings in preparation for installation of new crane equipment.

Maxim Sakov
Maxim Sakov

“Amkodor-Onego” LLC was established by Belarus holding “Amkodor” in 2019 following the bankruptcy if the “Onego Tractor Plant”. The plant needed an investor, and “Amkodor” stepped up. “Amkodor” is going to create a site for assembly, and then – for import substituting full cycle production of forestry machines – harvesters, forwarders, etc.

An investment contract was signed in June 2019. Under the contract, full modernization of the warehouses and major overhaul of the buildings are planned. Total cost of the project is estimated by US$ 220 million. The government of Karelia (Russian region) assumed the priority of the project and established several requirements.

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2020-07-26

Rural Economy Helping Ride Out COVID Impact

With extended lockdowns in most parts of India, the production of all non-essentials was at a halt or at minuscule levels in April and May until the economy was unlocked. This move reduced demand in the short-term, but owing to intrinsic domestic demand, we are optimistic about future business expectations

Aditya Kondejkar

Better Outlook of Rural Economy

However, hope has arisen from India’s rural part as the agriculture sector appears to have been relatively less impacted by the lockdown. This part of the country never truly went into a harsh lockdown, and thus procurement, harvest, and consumer activities have remained unaffected. Farming continued during the lockdown, especially for rice and wheat cultivation. The return of migrant workers caused a surplus of agricultural labor. This resulted in the fact – more land was brought under cultivation than ever before. As a result, the country has witnessed a good season of rabi harvest.

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Brazil CE Sales To Grow 15% Despite COVID

Fabio Ferraresi
Fabio Ferraresi

Construction Equipment Internal Sales in Brazil from January thru May grew 35% over the same period of 2019. The Brazilian Machinery Builders´ Association (ABIMAQ)  expects 2020 sales to hit 20,000 machines, 15% more than in 2019.

Source: Valor Econônico      Read The Article

PSR Analysis: The Construction segment was the less affected by the pandemic than some other segments. The interest reduction directed investment to real state, especially housing, and some measures, such as the new regulation for sanitation, recently approved by the parliament, will boost the Construction business in 2020 and more significantly in the coming years. PSR

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DataPoint. NA Tillers 2020 Forecast: 261,100 Units

The 261,100 units is the estimate by Power Systems Research of the number of tillers to be produced in North America (Mexico and the U.S.) in 2020.

This information comes from industry interviews and from two proprietary databases maintained by Power Systems Research: EnginLink™ , which provides information on engines, and OE Link™, a database of equipment manufacturers.

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2020-06-22

COVID-19 2020 North American Impact: Ag, -12%, Construction, -14%

HDMA-PSR COVID Webinar Presentation

COVID-19 continues to batter production of off-highway equipment as we continue to move through 2020. The effects of the virus on Agricultural and Construction equipment production in North America were analyzed in a June 17 webinar presented by the Heavy Duty Manufacturers Association (HDMA) and Power Systems Research (PSR). The webinar updated information presented in PSR’s webinar in April.

Jim Downey
Jim Downey

The PSR webinar team was Jim Downey, PSR vice president-global data products , and Yosyf Sherementa, PhD, PSR director-product management and customer experience.

PSR projects AG to be down 9.4% and CN to be down 11.3% when comparing global production for this year (2020) to last year (2019).

China and India which have the largest volumes for ag machinery are the lower side for production percentage drops this year. China which is also the largest producer of construction equipment is not expecting a decline this year.

Yosyf Sheremeta
Yosyf Sheremeta

A slight recovery for Construction equipment is expected in 2021, but not until 2022 for Agricultural machinery. Ag sector recovery will ultimately depend on overall economic recovery from the COVID-19 pandemic.

The construction segment will not return to pre-virus production volumes for another few years, at best. We’re looking out to 2024 or possibly 2025 to get back to 1.48 million units.

We don’t see a V-shaped type scenario on the horizon in North America, but rather recovery will look like something between a “U” and an “L.” Somewhat of a swoosh shape or upward sloping L.  Economic activity will slowly return to a sense of normalcy as the curve of new COVID-19 cases flattens.

Government support and intervention will be needed, and stimulus will provide an economic backstop. We expect modest growth in 2021. Pent-up demand and continued economic stimulus should also help with rebound.

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2020-06-15

John Deere Starts Grader Production in Brazil

Fabio Ferraresi
Fabio Ferraresi

John Deere announced the start of production of G series of Graders in Brazil in the coming months. It had previously imported these units. With the movement, John Deere will attend the South American Market with 90% of products made in Brazil.

Source: AutoData     Read The Article

PSR Analysis:  The decision of nationalization started in 2018 and makes more sense with recent local currency depreciation. With this movement, Deere will be more competitive in delivery time and it will have some room for margins and pricing variation, what will lead to a moderate growth of share in the market, what is already reflected in our databases forecast.

2020-05-23

COVID-19 Update: ARGO Tractors Resumes Manufacturing

Production has resumed in ARGO Tractors plants after being shut down for almost two months.  Different measures were put in place in order to comply with government health regulations.  In April ARGO started to sanitize the factories and prepare to resume operations.  Protection equipment is distributed to workers who must keep social distancing and whose temperature is registered at the entrance of the factories. 

Source: Argo Tractors      Read The Article

Source: PSR OE Link™

PSR Analysis: The prolonged halt in production and the continuous uncertainty related to the development of the coronavirus pandemic had a significant impact on the global agricultural industry and on ARGO tractor volumes.   Despite that, with the re-opening of the production lines the Italian OEM was able to address the orderbook received before the start of the lockdown, and at the same time, collect new orders. 

According to our forecast, we expect production to be down 16% this year.  However, this performance might turn a bit less bitter if the current pandemic evolution does not result in a second wave of lockdowns in the coming months. PSR

Emiliano Marzoli is Senior-Business Development Manager-Europe