Agriculture

Introduction The French market for agricultural machinery Agricultural machinery, the main players

France is Europe’s largest producer of food and the second largest exporter of food in the world. So it is no surprise that it is one of the world’s largest markets for agricultural machinery (AM).

France accounts for a staggering 10% of the global market and 25% of the European market for agricultural machinery. Despite fears that 2004 would be negatively affected by higher raw material costs (e.g. steel) and uncertainty over EU agricultural policy, the market was strong. In value terms, it topped €3.8Bn in 2004, an increase of 5% on 2003.

Demand was lead by cattle breeders and grain/cereal farmers, particularly of larger farms. This was reflected in the demand for certain types of machines, notably tractors (+5.3%), which is significant as tractors make up 30% of French AM), high-density bailers (+37%) and combine harvesters (+11.9%). Typical of farming, the outlook is mixed. Certain activities, notably the pork, sheep and wine industries, are seeing hard times. Other sectors, like beef and cereals are benefiting from good harvests and pricing environments.

Overall demand for AM is likely to be influenced by several factors. On the negative side, French farmers will be reluctant to invest as they are still unsure of the effects of EU enlargement.

On the positive side, more stringent hygiene norms applied throughout the EU will bolster demand. One of the key long term drivers of AM demand will be the growing use of precision farming. The use of technology (GPS, soil analysis, yield maps, etc) capture a meaningful share of French farming. This should bolster demand for more precise, and differentiated machinery.