Getting Past Drought

Farmer Iron

Looks like global machinery buyers are already looking ahead to a prosperous New Year.

Published on: December 13, 2012

One of our editors is offering up his ideas for new tech and approaches in an upcoming issue, and asked for reader participation. Interestingly, he also asked that readers not send drought-related ideas because he had "heard enough of that for 2012." It appears that's the way the machinery market is looking for next year too.

The Association of Equipment Manufacturers issued a positive outlook for the machinery market and worldwide they're predicting a 5% boost in sales, on top of a strong 2012. AEM is part of a group called the Agrievolution Economic Committee, which is a gathering of all the major equipment manufacturer associations.

So why should a farmer care that big equipment companies are going to have another bang-up year? Essentially it's an outward and visible sign of the global strength of agriculture, which should help bolster prices - not reduce volatility - into 2013. Global food demand isn't falling, and carryover stocks of key commodities are tighter than ever.

While 2013 could be a high-producing year - if the drought (sorry) ever really ends - global demand remand strong. And climate/weather issues in other parts of the world keep crimping supplies too. For example, in Ukraine, tight wheat stocks have the market wondering about supply issues every day.

Farming, while intensely local, continues to play out on a global stage. And manufacturers are increasingly playing in all the markets (as noted here in the past even dealers are expanding globally). It's a trend that continues to bear watching. But stronger companies with financially sound dealers serving the U.S. market should offer new opportunities for high-tech support, innovation and productivity improvements.

So looking ahead, a group of key industry manufacturers painting a rosy picture is - in fact - a good thing.

At least that's how I'm looking at it. If you disagree, share a comment below.