Tackle firms facing tough times ahead
Planning for more uncertain times ahead was the theme in the machinery, arable and livestock areas of the show. We continue our Royal Show report
UK farm machinery companies are bracing themselves for tougher times ahead.
Speaking in the machinery lines, chief economist for the Agricultural Engineers Association, Chris Evans said there were several key issues influencing the future of the industry. Those included a strong £, lower commodity prices and the uncertainty over CAP and world trade reform.
"Although the industry is not back to the low levels of 1992, when farming seemed to be on its knees, machinery suppliers are not experiencing the same level of business they have enjoyed in recent years," said Mr Evans.
Tractor sales were 14% lower in the first five months of the year compared with the same period in 1996. But allowing for a 3% increase in the average horsepower, the total hp sold was down by only 10%.
Combine harvester sales were more buoyant. The present season (September-August) will see the highest level of sales for many years at close to 1600 units. That compares with 1500 the previous year, he said.
"Most of the orders were taken shortly after harvest, but with lower grain prices we do not expect sales for next season to match those levels."
Sales of other machinery were 4% up on last year. The most buoyant area was grain drying and storage equipment and mower conditioners, Mr Evans pointed out. The strong £ was hitting domestic manufacturers, who were finding it increasingly difficult both to export and compete with lower priced imports at home.
"The £ has strengthened against all currencies, particularly the German mark and the French franc, by some 25% since last August and that is making life very difficult for everyone in the industry." *