U.S.-manufactured agricultural equipment exports dropped 6% in 2013 for a total of $12 billion, according to data from the U.S. Commerce Department.
The reported drop is a continuation of a trend, a trend that follows three years of export growth.
During the years of 2010-2012, exports were up 16%. The ironic thing about this is that these strong years followed a 2009 decline of 23% on the heels of The Great Recession of 2007.
So why is the decline happening?
In Brazil, rising costs and slumping crop prices were the culprits for the fall in exports.
In addition, central bankers in Brazil carried out the steepest rate increases among major economies to tame inflation, he said.
Add to the fact that rising costs to finance farm-machinery purchases in 2014 will follow a 40% plunge in international corn prices in the past year and an 18% decline for soybeans.
However, the U.S. equipment export situation for Argentina is a little brighter than in Brazil.
Here’s why: The area has experienced a good rain season in 2012 following the 2011 drought, in addition to solid international commodity prices.
The top export destinations for American-made farm machinery in 2013 by dollar volume were: (1) Canada – $4.3 billion, up 6%; (2) Mexico – $988 million, up 3%; (3) Australia – $822 million, down 28%; (4) Brazil – $517 million, down 29%; (5) China – $491 million, down 5%; (6) Germany – $470 million, down 5%; (7) France – $344 million, down 7% percent, (8) South Africa – $303 million, down 4%; (9) Russia – $303 million, down 9% and (10) Ukraine – $269 million, down 30%.
The U.S. market, according to industry experts, is expected to be down next year from 5% to 10% due to the expected lower commodity prices and changes in tax and depreciation incentives that have gone away in 2014.
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