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Optimistic outlook for agricultural machinery
NEWS HIGHLIGHT
Optimistic outlook for agricultural machinery
In sharp contrast to most other sectors, agricultural machinery manufacturers remain positive about 2009.
March 4, 2009 By ThomasNet IndustrialNewsRoom
In sharp contrast to most other sectors, agricultural machinery manufacturers remain positive about 2009. Already, farm debt-to-asset ratios are at an all-time low while farms continue to invest in equipment.
Everyone has been cutting back on expenses and buying less, but there is one thing people cannot live without: food.
"Certainly, recent economic conditions are testing the market's confidence. But people need food," says Charlie O'Brien, Association of Equipment Manufacturers (AEM) vice president of agricultural services. "The global population is growing, and is expected to increase 23 percent by 2025 and total 9 billion by 2050. It is predicted food production will need to increase by 50 percent by 2025 and double by 2050."
According to the AEM's Farm Equipment Sales Forecast for 2009, farming machinery sales are expected to weather the downturn due to the growing population. Equipment will be needed to plant, harvest and process crops. Although there will be some short-term effects from the overall economic slowdown, the agriculture industry can rely on these for long-term viability.
North America, in particular, is expected to do well even in the short term. Sales of most machinery components and tractor sales are anticipated to increase during 2009 for the US and Canada, the AEM report says. Sales of four-wheel drive tractors are predicted to go up 4.4 percent in the US and Canada's two-wheel drive tractors are expected to gain 3.3 percent. Combine sales are expected to increase 9.3 percent in the US and gain one percent in Canada.
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