Despite vibrant crowds and widespread positivity at last week’s FTMTA Farm Machinery Show, exhibitors were honest in acknowledging that the demand for new machinery in Ireland and across Europe is beginning to slow.
This easing of the market comes off the back of a boom period for new equipment.
The drop in farmgate prices and the rise in interest rates seem to be the main underlying issues. We caught up with several industry personnel to find out more.
Karol Duignan.
Karol Duignan,
Claas area sales manager
“Business in Ireland has slowed a little, but things are ticking along. The two things I see impacting new machinery sales are the high interest rates and the fact the first-cut silage was very easy on machinery.
“We find that the demand for new machinery depends on the machine. Machines which are grant-aided under TAMS are still in demand, whereas demand for other items has eased off considerably.
“Lead times for new equipment has eased off significantly, especially with the bigger ticket items such as combines and foragers.
“Some of the smaller stuff is a little trickier due to some lingering supply chain issues, such as securing gearboxes for mowers or tedders.”
“Lead times on new tractors are currently running at around six months. At their peak, this was up as high as 12 to 15 months.
“The biggest challenge we find at present is that consumer confidence is low, which is down to farmgate prices and high interest rates. It’s affecting everything. The outlook for the next six months will all depend on commodity prices in the near future. Most manufacturers will be adding a 2% price rise at the end of the year.”
Pierre-Francois Tunier.
Pierre-Francois Tunier, export manager for MX, the French front-end loader manufacturer
“Business is slowing. We see tractor sales dropping off by 15% to 30% across Europe. Our business is fully related to tractor sales, so less tractors sold means a reduced requirement for our loaders and attachments.
“Business isn’t just quietening in Europe, we see this trend happening worldwide. Why? Well, dealer stock levels have returned to normal, commodity prices have fallen, while the price of machines and finance has increased.
“The order book is still solid, we are still working through a backlog. Our current lead time is four to six weeks.
“After Covid-19, it was over three months. We are still having some supply issues, but things have mostly returned to normal. The workforce is an issue, we are always looking for staff. The economic situation means the workforce is reducing.
“Our outlook is very mixed. We believe the market will be slower for the remainder of 2023 and into 2024. However, there will always be a need for machines, and machines will need to be replaced.”
Edward Hall.
Edward Hall,
McConnel export
sales manager
“The order book remains crazy. We have engaged a number of 2024 business plans and there are no obvious signs of major slow down or order cancellations.
“From Alaska to New Zealand, worldwide, the market remains buoyant. There is still product growth, but not to the same levels previously witnessed. Having a presence in numerous export markets allows us to spot potential challenges and make supply adjustments before they arrive to other markets.
“That said, supply chain issues remain lumpy. For example, not all component orders arrive fulfilled. China is trying to still catch up post its Covid-19 lockdowns.
“On a positive note, materials are starting to stabilise and return to contract prices, away from a time where quotes were only valid the length of the phone call.
“Without a doubt, sourcing skilled labour is one of the biggest challenges. We have increased the workforce by 10% to deal with demand and help overcome challenges.
“Our outlook is positive, the market will likely steady and price rises will also stabilise.
Jason Cross.
Jason Cross,
Cross Agricultural Engineering
“Poor farmgate prices across all sectors, coupled with those waiting for approval on TAMS III applications, we feel are the causes of things to slow in Ireland.
“However, the order book remains strong with lead times still up to 12 months on certain products.
“Manufacturing a wide range of products can be a challenge but means our eggs are not placed in one basket.
“Export markets provide the stability of being busy all year round. If one industry or market is slow, another tends to pick up.
Labour shortages, continued supply chain issues coupled with the results of Brexit still pose a challenge. In particular accessing componentry, not to mention all the paperwork required to get machines in and out of the UK.
“ Being situated in Kildare, leaves us competing with the likes of Amazon, Pfizer and Intel for skilled tradesmen. It’s hard for an Irish agricultural engineering company to pay the wages of US multinational companies.
“The outlook remains positive, but again depends on commodity prices. Component price increases seem to be stabilising which should see machinery price increases stabilising.”
Despite vibrant crowds and widespread positivity at last week’s FTMTA Farm Machinery Show, exhibitors were honest in acknowledging that the demand for new machinery in Ireland and across Europe is beginning to slow.
This easing of the market comes off the back of a boom period for new equipment.
The drop in farmgate prices and the rise in interest rates seem to be the main underlying issues. We caught up with several industry personnel to find out more.
Karol Duignan.
Karol Duignan,
Claas area sales manager
“Business in Ireland has slowed a little, but things are ticking along. The two things I see impacting new machinery sales are the high interest rates and the fact the first-cut silage was very easy on machinery.
“We find that the demand for new machinery depends on the machine. Machines which are grant-aided under TAMS are still in demand, whereas demand for other items has eased off considerably.
“Lead times for new equipment has eased off significantly, especially with the bigger ticket items such as combines and foragers.
“Some of the smaller stuff is a little trickier due to some lingering supply chain issues, such as securing gearboxes for mowers or tedders.”
“Lead times on new tractors are currently running at around six months. At their peak, this was up as high as 12 to 15 months.
“The biggest challenge we find at present is that consumer confidence is low, which is down to farmgate prices and high interest rates. It’s affecting everything. The outlook for the next six months will all depend on commodity prices in the near future. Most manufacturers will be adding a 2% price rise at the end of the year.”
Pierre-Francois Tunier.
Pierre-Francois Tunier, export manager for MX, the French front-end loader manufacturer
“Business is slowing. We see tractor sales dropping off by 15% to 30% across Europe. Our business is fully related to tractor sales, so less tractors sold means a reduced requirement for our loaders and attachments.
“Business isn’t just quietening in Europe, we see this trend happening worldwide. Why? Well, dealer stock levels have returned to normal, commodity prices have fallen, while the price of machines and finance has increased.
“The order book is still solid, we are still working through a backlog. Our current lead time is four to six weeks.
“After Covid-19, it was over three months. We are still having some supply issues, but things have mostly returned to normal. The workforce is an issue, we are always looking for staff. The economic situation means the workforce is reducing.
“Our outlook is very mixed. We believe the market will be slower for the remainder of 2023 and into 2024. However, there will always be a need for machines, and machines will need to be replaced.”
Edward Hall.
Edward Hall,
McConnel export
sales manager
“The order book remains crazy. We have engaged a number of 2024 business plans and there are no obvious signs of major slow down or order cancellations.
“From Alaska to New Zealand, worldwide, the market remains buoyant. There is still product growth, but not to the same levels previously witnessed. Having a presence in numerous export markets allows us to spot potential challenges and make supply adjustments before they arrive to other markets.
“That said, supply chain issues remain lumpy. For example, not all component orders arrive fulfilled. China is trying to still catch up post its Covid-19 lockdowns.
“On a positive note, materials are starting to stabilise and return to contract prices, away from a time where quotes were only valid the length of the phone call.
“Without a doubt, sourcing skilled labour is one of the biggest challenges. We have increased the workforce by 10% to deal with demand and help overcome challenges.
“Our outlook is positive, the market will likely steady and price rises will also stabilise.
Jason Cross.
Jason Cross,
Cross Agricultural Engineering
“Poor farmgate prices across all sectors, coupled with those waiting for approval on TAMS III applications, we feel are the causes of things to slow in Ireland.
“However, the order book remains strong with lead times still up to 12 months on certain products.
“Manufacturing a wide range of products can be a challenge but means our eggs are not placed in one basket.
“Export markets provide the stability of being busy all year round. If one industry or market is slow, another tends to pick up.
Labour shortages, continued supply chain issues coupled with the results of Brexit still pose a challenge. In particular accessing componentry, not to mention all the paperwork required to get machines in and out of the UK.
“ Being situated in Kildare, leaves us competing with the likes of Amazon, Pfizer and Intel for skilled tradesmen. It’s hard for an Irish agricultural engineering company to pay the wages of US multinational companies.
“The outlook remains positive, but again depends on commodity prices. Component price increases seem to be stabilising which should see machinery price increases stabilising.”
SHARING OPTIONS