Following a poor 2014, this year will be remembered as another difficult business one with tractor and combine markets depressed around the globe.
There are no exceptions either, with all manufacturers feeling the effects of lower commodity prices and falling farm incomes. A good indication of how bad things are is, with the exception of Fendt, the tractor makers have stopped talking numbers.
The German tractor maker expects to produce just 13,500 new tractors this year, well below 2013’s 17,837 units and the lowest level for the past five years.
Fendt vice-president and brand director Peter-Josef Paffen admitted it was having to fight hard in a very difficult and competitive market.
“Low producer prices, especially for dairy and meat products, has resulted in less willingness by European farmers to invest,” he said.
Proof of this is evident in the fact parent company Agco lost US$3 billion (£1.9bn) in sales during the last two years.
Fendt’s message was echoed by brand president Andreas Klauser of Case IH, who said the global agricultural sector faced enormous challenges.
“We are currently in a very competitive environment with a heavy downturn in sales of farm machinery," he said.
In western and central Europe this downturn will see new tractor volumes fall by about 10 per cent to below 152,000 units (excludes Turkey) this year.
And low commodity prices and political instability persists for some, 2016 offers no panacea.
A survey of more than 5,350 Agritechnica visitors revealed only 52 per cent planned to replace machinery and equipment during the next two years (57 per cent at Agritechnica 2013).
One positive industry outlook signal comes from the European association of agricultural machinery manufacturers (CEMA). There are a few exceptions, such as a further expected decline in the big Euro tractor markets of France and Germany, but overall the organisation expects the demand for new tractors and farm machines to stabilise in 2016.
Fendt too remained positive and was cautiously-confident for a slight recovery during the second half of 2016. However, not all the major players are quite so confident and New Holland predicts further declines in sales of new tractors and combines in Europe.
Continued pressure on the European dairy sector wais likely to result in a flat market, said John Deere, and in the worst case scenario could see farm machinery sales fall by 5 per cent next year.
In an already depressed South American market, Deere predicted industry sales of tractors and combines could fall by as much as 10-15 per cent.
Next year’s negative outlook follows a bleak 2015 when worldwide net sales fell by a fifth, and profit levels tumbled by nearly a half. And it expects earnings to fall again in 2016.