Agricultural Machinery & Equipment

An Expert's View about Machinery and Robotics in Uruguay

Posted on: 26 Nov 2011

Summary
Stimulated by the rising prices of international agricultural commodities and Uruguayan land prices, Uruguayan farmers have been investing heavily in the renewal of their stock of agricultural machinery and equipment. Sales declined somewhat in 2009 but fully recovered in 2010. The U.S. market share of many products has been on the rise. The decline in sales in 2009 was partly attributable to a severe draught that occurred from October 2008 through February 2009 and the worldwide economic crisis. Agriculture plays the most important role in Uruguay’s economic, political, and social sectors. Ag-related exports have grown 70% in recent years and the sector now represents 65% of Uruguay’s exports. In 2009 it represented 9% of GDP. While Uruguay’s growth has been on average 4.5%/year, the ag-sector has been growing 9%/year. 2010 agricultural sector exports increased 17% over 2009 figures and reached $4.4 billion (led by soy exports $701 million; forestry products $522 million; and dairy products, $517 million).

Uruguay should continue to present reasonable opportunities for U.S. suppliers of agricultural machinery during the next several years, a market in which it has traditionally been the third largest supplier, preceded by neighbors Brazil and Argentina. While U.S. brands lead the market, much of the equipment is manufactured in Brazil. Agricultural machinery is not subject to any import duties. There is strong demand for pre-owned and refurbished machinery and most of it, except tractors, is sourced in the U.S. Uruguay is the world’s fourth largest exporter of combed wool, the seventh largest of rice, soybeans and frozen beef, and the eighth largest exporter of malt. 2010 imports of fertilizers amounted to $250 million, up from $156 million in 2009 (621 thousand tons in 2010 against 507 thousand tons in 2009). Uruguay’s surface dedicated to farming is approximately 40.5 million acres (16.4 million hectares).

Market Data
The market for agricultural equipment is virtually 100 percent supplied by imports.

Best Prospects
The best sales prospects for U.S. equipment are as follows (not in specific order):

• Data collection equipment such as global positioning systems, yield monitoring, soil sampling, crop and field scouting, and remote sensing technologies used for monitoring soil properties and crop conditions. Only seven or eight percent of agricultural producers operate such equipment today.

• Laser-controlled earth-leveling machinery.

• Computerized management systems (such as used for livestock). Agrifood machinery and equipment used by food processing companies may also provide opportunities. These could include grain processing equipment, fruit and vegetable processing equipment (separation, cleaning, etc.), meat processing equipment, poultry production equipment, etc.

• Chutes to discharge harvested grains into different storage devices.

• Advanced turbine sprayers (and associated pumps.)

• Combines and other harvesting equipment.

• Agricultural Tractors and Harvesters. Uruguay imposes no restrictions on the imports of refurbished tractors and harvesters. Notwithstanding U.S. prices of refurbished tractors (even those U.S.-made) are not competitive with those offered in Europe.

• Parts and accessories for harvesters and tractors: demand is expected to increase in line with increased utilization of machinery.

• Cultivators and other solid preparation equipment (including plows, harrows, cultivators, seeders, and fertilizer spreaders.)

• Pre-owned and refurbished machinery with good post-sales service will find good prospects if a supplier will ensure reliable and steady part supplies.

• Greenhouse and other vegetable production equipment.

• Irrigation equipment: increasingly used to improve yields in Uruguay’s increasingly unpredictable rainfall.

• Dairy equipment: Uruguay is a major producer of dairy products. 2010 sales ($530 million) increased 41% over 2009 and 25% over 2008 (a record year). Most (76%) of the products exported are powdered milk, cheese and butter.

• Of particular interest is the growth of green-housing production of organic products that according to some estimates has more than doubled over the last five years. Uruguay has officially branded its natural and organic products “Uruguay Natural.”

• Storage buildings, silos, etc. Prefabricated, light, inexpensive farm storage buildings have a good market in Uruguay.

Read the full market research report


Posted: 26 November 2011

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