U.S. farm equipment makers like John Deere & Co. are reporting fantastic results, in large part due to overseas demand. In the third quarter, Deere's sales outside the U.S. and Canada rose a whopping 30 percent. As they prosper and modernize, and take part in the global commodities boom, farmers in developing economies like Brazil, China, and India can increasingly afford to buy the expensive, productivity-enhancing tractors that Deere and its rivals make.
At the same time, there appears to be demand growing in the U.S. for cheaper, non-industrial tractors made by an Indian company. Doug Cameron reports in the Financial Times:
"Agco, the farm equipment maker, plans to start importing low-cost tractors from India to the US later this year to meet surging demand from so-called ‘rural lifestyle’ farmers.
The US group will import Massey Ferguson-brand tractors, built in a joint venture with Tafe in Chennai, to compete with such rivals in the small tractor market as Deere and CNH. Mahindra & Mahindra, the Indian tractor maker, already exports some models to the US. . .
Robert Crain, Agco’s senior vice-president for North America, said US farmland ownership is diverging into a mix of professional farmers working large acreages and a new breed of smaller sharecroppers, often city dwellers seeking alternative lifestyle and recreational pursuits.
Mr Crain said the US market for small tractors in the range of 35-60 horsepower could account for half the current annual demand of 250,000 units. Agco and its rivals are enjoying booming global demand for new equipment as farmers take advantage of high commodity prices to boost investment and raise productivity."
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