Machinery for agriculture sector expects a two-digits growth in 2021 in Brazil

“Due to the capitalization of the farmers, who are seeking for investments in technology to increase their yield”

Alfredo Jobke, Marketing Director at AGCO South America

Despite the pandemics that has been weakening the global economy, the Brazilian agribusiness has been able to continue growing.

In 2021, the machinery for agriculture market has shown good results, according to Abimaq (Brazilian Association of Machinery and Equipments Industry) with a 62% growth in the first quarter of the year compared to the same period in the last year.

AgriBrasilis invited Alfredo Jobke Marketing Director of AGCO South America, bachelor at Agriculture Economics by University of Belgrade and MBA in Business Management. Before AGCO, Jobke was Marketing Diretor at Case New Holland Argentina and Latin America.

AGCO was created in 1990 in North America and started manufacturing equipments for agriculture in South America in 1996 with the acquision of Iochpe-Maxion in Brazil and the Deutz Argentina S.A. in Argentina.

AgriBrasilis – How is the performance of machinery for agriculture market? 

Alfredo Jobke – This is a positive moment for Brazilian agribusiness, the commodities’ prices are high and it’s expected a new record for the 2021/22 harvest, about 295 million tons.

The steady growth of the demand, great harvests and high prices paid for the commodities end up in an increased income, therefore we believe the farmers will invest in their property, seeking for technologies that improve the fields results, and machines are an essential part of this technification process.

AgriBrasilis – Is the industrial capacity enough to meet the demands?

Alfredo Jobke – The component and raw material suppliers are the foundation of the business. Break in the supplier’s chain, as the sector lives nowadays, affects the production capacity. However, an excellent execution of the in-house staff and the hi efficiency and efforts of the whole supplier’s chain has been minimizing the impacts of the provision limitations. Also, we have been working alongside the concessionaires to attend the farmers’ demand, even if it takes a longer time.

AgriBrasilis – Can this higher demand causes a raise of the prices?

Alfredo Jobke – There are some adjustments of component prices pressuring the costs, the industry has no option but pass some costs on the farmers, although the dollar exchange rate is still good for the farmer.

AgriBrasilis – What types of financing are available for the purchase of tractors and implements?

Alfredo Jobke – About a year ago, practically all finances were made through a specifically fund of Brazilian Development Bank (Finame/BNDES), but due to the good moment of the Brazilian agribusiness the credit lines widened and farmers can find good options in private banks, including funding in other currencies. AGCO, for instance, has as a differential, the factory bank (AGCO Finance), with attractive conditions. We can’t leave behind that a wall capitalized farmer can purchase machinery to prompt payment. Besides the many credit types, the banks offer today, consortium is a good alternative.

AgriBrasilis – Is the farmer more carefull in the purchase decision?

Alfredo Jobke – The farmer is more demanding with their investments, focusing in products and services with technologies that increase the productivity, operation efficiency, resources and wastes reductions in addition to the increase final harvest yield. When the farmer is well remunerated, like now, they seek for renewing their machinery and equipment and invest in their business.

 AgriBrasilis – What are the sector’s perspectives for the next years?

Alfredo Jobke – Our expectation is that the Brazilian machinery market will grow two digits during 2021, due to the capitalization of the farmers, who are seeking for investments in technology to increase their yield. Our global vision in long term remains positive. A commodity demand growth is expected driven by a constantly growing society, the raising of meat consumption in emergent economies and the use of biofuels will support a health growth of our industry.