28 May 1999

Milk price rise helps boost German sales

HIGHER milk prices helped to lift sales of German farm machinery to £956m (DM2.8bn) in 1998, 6% ahead of the previous year.

Forage equipment was the star performer, says Franz-Georg von Busse, president of the farm machinery manufacturers association LAV.

"Although forage equipment sold particularly well last year, sales of all farm equipment were high in dairying areas," he told visitors to a preview of this autumns Agritechnica Show in Hannover.

Speaking in Osnabruck, Lower Saxony, Dr Busse said new tractor registrations rose by 6.5% to 27,539 units last year. Only in areas of intensive pig production did new tractor registrations fall reflecting last autumns depressed pigmeat prices of 54p/kg (1.6dm/kg). In the first three months of this year 6956 tractors were registered, a small dip in the same period last year.

Each year about 45,300 tractors are produced in Germany of which 75% are exported, mainly to Western Europe and North America, said Dr Busse.

Higher arable prices boosted sales of drills, fertiliser spreaders and sprayers although the very wet autumn left sales of ploughs and harrows unchanged compared with 1997. Combine and potato harvester sales also rose significantly.

Machinery exports to Western Europe countries stagnated in sharp contrast to tumbling exports to East European countries and rapidly rising exports to South America.

"Although exports to Holland rose by more than 30% and to Sweden by 13%, the UK market sales displayed a substantial slump," says Dr Busse.

Reflecting the economic crisis in Eastern Europe, machinery exports to Poland, the Czech Republic, Slovakia and Ukraine all tumbled by 30% or more. Deliveries to North America rose by 18% last year to reach £229m (DM680m). Similarly, exports to middle and South American countries, valued at £37m (DM110m), increased by 45%.

Agreement earlier this year to reform the CAP will introduce much needed stability into the European machinery market. But Dr Busse predicts the German market will stagnate this year and combine sales will almost certainly fall. In the longer term he expected exports to central and eastern European countries would rise.

This years DLG farm equipment show takes place at the Hanover Fairgrounds between Nov 9-13. &#42