Seeders have shrunk – Newspaper Kommersant No. 18 (7463) of 02/01/2023

Domestic manufacturers of agricultural machinery in 2022 increased sales in money terms by 17% in a stagnant market. At the same time, in physical terms, purchases of farmers fell, as did the production of equipment in many market segments. Forecasts for 2023 do not yet look promising: the industry is talking about the dependence of equipment sales on the income of farmers, and analysts point to the not very successful sowing of winter crops this year.

Sales of domestic agricultural machinery in the Russian Federation for 2022 increased by 17.2%, to 235.4 billion rubles, Rosspetsmash calculated. At the same time, the entire market shrank by a symbolic 0.4%, to 389.4 billion rubles. Thus, the share of Russian producers in monetary terms amounted to almost 60.5%. This agrees with the estimates of the Ministry of Industry and Trade.

The output of agricultural machinery in the Russian Federation increased by 15.1%, to 250.6 billion rubles. However, in units, the production of tractors and combines sank. Thus, factories produced 32% less than a year earlier, grain harvesters (4.7 thousand units), forage harvesters – by 14% (290 units), and agricultural tractors – by 1% (6.2 thousand). Also in the red was the segment of seeders (by 7%, up to 6.2 thousand units), harrows (by 10%, 6.2 thousand), cultivators (by 15%, 2.8 thousand), mowers (by 3 %, 2.4 thousand), as well as balers (by 24%, 1.7 thousand) and grain cleaning machines (by 7%, up to 1.8 thousand). At the same time, the production of plows (by 5%, to 4.1 thousand), fertilizer spreaders (by 25%, to 829 units), sprayers (by 16%, to 2.1 thousand) and harvesters grew in 2022. (by 18%, up to 1.8 thousand).

The output data partially repeats the preliminary results of purchases of equipment by the Russian agro-industrial complex given by the Ministry of Agriculture.

Among other things, it can be seen from them that the volume of purchases of combine harvesters is almost equivalent to production (4.7 thousand). But, probably, not the entire volume of production was shipped to the market in 2022 – the head of the relevant department of the Ministry of Industry and Trade, Maria Elkina, said that the share of domestic players in this segment is “more than 70%”. And for forage harvesters and tractors, the output is 52.7% and 54.9% of the volume of purchases declared by the Ministry of Agriculture (550 and 11.3 thousand units, respectively). In general, the data also indicates a market decline compared to 2021: for example, for tractors, it was 23%. This year, as Ms. Elkina stated, the Ministry of Industry and Trade expects to maintain the pace of growth in the production of agricultural machinery.

In Rosspetsmash, they emphasize that agricultural machine builders primarily depend on the income of farmers. They explain that grain prices in the domestic market of Russia are now at a fairly low level, and therefore the profitability of agricultural producers may be reduced, and the pace of renewal of the fleet of agricultural machines in the Russian Federation may be reduced.

Dmitry Babansky from SBS Consulting says that keeping the market in money at the level of 2021 is generally a positive result. But, according to the analyst, the decrease in sales of Russian manufacturers in pieces is more symptomatic.

“This decline is due to the increase in prices for machinery, the uncertainty that was on the market at the beginning of the agricultural year (in July-August, for example, wheat exports decreased by 27%), as well as the negative price environment in the agricultural market — at a peak in May— In June, the export value of wheat was about $400 per ton FOB Novorossiysk, then the prices fell sharply,” he explains. Thus, the rise in the cost of equipment, on the one hand, and the decline in income, on the other, led to a decrease in purchases of equipment in physical terms, the analyst notes.

Alexander Altynov, Chairman of the Board of the Association of Dealers of Agricultural Machinery ASHOD, says that the market in units has declined amid underproduction of equipment due to interruptions in the supply of components from local factories, as well as new import deliveries that have not yet been adjusted. Now, he continues, the demand for equipment is weak:

“Agrarians, whose costs have increased, first of all need to be weeded out. There is a fleet of equipment, and it has been actively updated for the past two and a half years, although now we have obviously beaten out of the average annual pace – the prices for equipment have been growing, while the prices for agricultural products remain low.”

It is difficult to predict the market in 2023 in the current conditions, says Mr. Babansky: “On the one hand, the yield is predicted to decline: the sowing of winter crops was more difficult and on a smaller area. On the other hand, the normalization of prices for metal products and the building of new supply chains will lead to the stabilization of prices for agricultural machinery.” State support will play an important role, he believes.

Rosspetsmash indicates that state support programs from the Ministry of Agriculture and the regions should only apply to localized equipment (in accordance with the 719th resolution) or that has no analogues in the Russian Federation. The same rule should apply to the programs of Rosagroleasing JSC, they believe there. The association also sees the need to finance the development of components in the form of grants.

Olga Nikitina