The agricultural market has come to a standstill: are we waiting for a miracle?
2024. March 20.It seems that the situation in the agricultural market is not good.
In December last year, the price of farm machinery rose 88, 65 and 54 percent in a single year.
The situation is no better in Germany, where there are piles of unsold, highly valuable agricultural equipment.
But what can we do?
Can we really only rely on a miracle?
Already in the autumn you could see that there was trouble
In September, there were already reports that the agricultural market, which has been booming for the past 10 years, could no longer keep up and sales had come to a halt.
In Hungary, for the first time in 9 years, we had a quarter last year when dealers sold 20% fewer machines than before.
As a result, refurbishments, used machine sales and purchases are gaining more and more attention.
This is also evident from the fact that although sales of field machinery have fallen, this fall has not occurred for spare parts, which in fact exceeded sales by several billion forints.
The trend is therefore being maintained by maintenance and operating expenditure.
So, until farmers can expect better incomes, we certainly cannot expect a recovery in the agricultural market, which is currently very much on the back burner.
For now, everyone is on the sidelines and domestic buyers are cautious.
What could help is the falling interest rate environment and the grant money that could possibly boost investment in the sector.
Despite this, farmers are not optimistic about a good year for their incomes.
It is no coincidence that most farmers are postponing their machinery purchases, preferring to wait until the situation has settled.
This trend is likely to continue throughout the year, so there is little hope for the agricultural market.
Even the basic machines cost more
The contradictory situation has led to a staggering rise in prices as a whole.
The price of trailed sprayers rose by 88% in just six months between 2022 and 2023.
As for seed drills, they rose by more than 65% in the same period, while fertiliser spreaders rose by almost 54% in a year.
And it’s not just the lower-volume implements, as tractor prices have risen by almost 41% in the space of a year.
And as for smaller tillage equipment, cultivators, which are now almost indispensable, cost 24% more, while self-propelled loaders are “only” 16% more.
Similarly, the price of seedbed makers has risen “only slightly”, with just 19% more than before. 
Has machinery production stopped?
Already at the end of last year, there was talk that the Germans were making fewer and fewer machines.
So the distribution situation was already not very rosy.
According to German statistics, the price of agricultural machinery and implements has risen by around 25% in the last two years.
At the end of the year, the dealers’ yards were still not empty, although they were normally ‘robbed’ by the autumn.
The reason is quite clear: production costs are sky-high and the price of agricultural products has plummeted.
Most farmers have no access to credit, as the interest rate on these loans has risen sharply due to inflation.
According to the Germans, sales levels are back to 2016 levels, but the field machinery sector can still claim to be successful.
Factories are still reporting revenue growth.
But whether this will be the case again this year is a big question mark.
How was last year’s turnover?
Among the products purchased in the largest number of units were soil cultivation tools.
The biggest drop in demand was for ploughs, with 331 sold in 2022 and just 172 in the first three quarters of 2023.
The situation was similarly bad for seeders, where only 104 instead of 163 were sold.
Demand was also weak for soil spreaders, seedbedders, disc cultivators and rollers.
Similarly, there was little money for tractors, of which 3,020 were purchased in the first 10 months of 2022, but just 1,757 had been sold by dealers by October 2023.