Frankfurt, September 26th, 2023 – The agricultural machinery industry in Europe is in excellent shape. "We are coming to Hanover with record results," said Dr. Tobias Ehrhard, managing director of the VDMA agricultural machinery association, at the pre-press conference for the world's largest agricultural machinery trade fair, Agritechnica, which will be held in Hanover from November 12 to 18. "Continuously high growth rates in order intake have ensured that the agricultural machinery industry has been positioned among the top growth sectors of the machinery and equipment industry for more than three years."

For 2023 as a whole, the VDMA again expects a sales volume from German production of more than 12 billion euros. The agricultural machinery industry thus remains at the top level.

Very good result in the first half of the year

The first half of 2023 brought the industry a very good result. Across all segments, agricultural machinery and tractor manufacturers succeeded in increasing their sales by a high double-digit percentage to almost 6 billion euros. Manufacturers were pleased with full order books; the order backlog in the spring was almost 7 months, which is an all-time high. The industry-wide boom is reflected along the entire agricultural production chain.

Easing on the supply side

The situation on the international raw material and supply markets, which had been tense for a long time, eased at a rapid pace during the spring.

"Well-filled dealer inventories are currently having a braking effect on ordering behavior, which is why demand from the agricultural machinery trade has slowed down recently," Ehrhard said. On the plus side for the industry is the continued good income situation for farmers. "In almost all key markets, we are benefiting from the high level of liquidity, investment and innovation among farmers and contractors," Ehrhard said.

At home around the world

The industry, which is at home in more than 130 markets around the globe, plays an important role in world nutrition. After all, the uninterrupted availability of good-quality food and feed on a global scale is by no means a matter of course. Natural, weather- and climate-related, but also geopolitical and economic factors limit the field of action in many places. "The fact is that there is less and less land worldwide that can be farmed. Innovative agricultural machinery is therefore a decisive factor in being able to further increase efficiency and output in agriculture," explained Ehrhard.

However, since innovation can only flourish fruitfully in open competition, high-performance technology is at best a necessary, but not a sufficient condition: "We need open markets without compromises, especially today, when compartmentalization seems to be becoming acceptable again in many regions of the world. For the VDMA, multilateral agreements have priority, but bilateral solutions are better than no solution at all," said Ehrhard. Getting politicians to finally bring the EU-Mercosur trade agreement to a successful conclusion is therefore a core concern of the industry association. "For agricultural machinery, the future potential of the countries of South America is immense. Regardless of all the frictions that still exist, we must work towards becoming much more present in the south of the double continent," said Ehrhard.

New stage of digital evolution in arable farming

The industry association sees digital networking solutions, as well as innovative drive and fuel options, as an "attractiveness factor and sustainability booster" for agribusiness worldwide. "Applying crop protection products in a minimally invasive manner based on the needs of the individual plant, as made possible, for example, by spot farming using state-of-the-art sensor, video and software technology, is a new stage in the digital evolution of arable farming," explained Ehrhard. Similarly gentle and effective methods of applying fertilizer with pinpoint accuracy are being used, but the trend toward mechanical weed control using hoeing technology is also unbroken.

 The current technological development is linked to a rapidly growing degree of automation throughout the industry, which in the future will extend to fully autonomous processes.

"Autonomous agricultural machinery and tractor concepts have long since reached the trial phase in the industry's development departments. For our industry, they are an important part of tomorrow's solution space. However, due to the heterogeneity of agricultural production forms, I am certain that we will see both driver-assisted and autonomous machines in agricultural practice in the future, depending on the location and purpose of use," Ehrhard emphasized.

Sustainable fuel strategy for agriculture

The VDMA sees an immediate need for action in the decarbonization of agricultural vehicle fleets. "A sustainable fuel strategy for agriculture is long overdue. This involves providing tangible incentives for the use of biogenic and synthetic fuels. After all, the combustion engine will continue to be indispensable for operating high-performance agricultural machinery in the future," said Ehrhard. To reduce CO2 emissions as quickly as possible, climate-neutral liquid fuels are the best solution. To achieve this, all currently available fuel options would have to be drawn on.

One promising, immediately available option is hydrogenated vegetable oils from residues – called HVO. "They could already save up to 90 percent of CO2 emissions compared to fossil fuels," Ehrhard said. "Battery-electric drives are also seen as a valid option for limited fields of application in the power range up to 100 kilowatts. "Tomorrow's CO2-free energy mix is diverse – and it has an immediate impact, especially on the existing fleet," Ehrhard summed up.