According to Christoph Gröblinghoff, chairman of the management board AGCO/Fendt, the industry has been in a state of emergency in the production sector for a year now, partly due to complete production downtimes at suppliers or delays in transport, which affects manufacturers. As far as we are aware, Fendt is the first tractor manufacturer to temporarily stop production.
FederUnacoma, the Italian farm machinery manufacturers association has also issued a warning about the shortage of raw materials and reckons the surge in prices is pushing production costs to an all-time high.
The Italian organisation reckons this has serious consequences for the agricultural machinery sector, which largely uses ferrous and plastic materials. As an example, three-quarters of the roughly 1,700 components needed to make a tractor are derived from cast iron, steel or metal tubes, plus another 5.0% of other metals such as copper. Of the remainder, more than 10% is covered by plastic materials (cab linings, guards, covers, plugs) and 5.0% by rubber polymers (tubes, seals, gaskets).
According to FederUnacoma, European steel prices reached an all-time high last month (up 70-80% compared to pre-Covid levels). As for plastics, Europe recorded a 45% increase in the cost of ethylene and a 121% increase in the cost of polyethylene in the first quarter of this year.
The organisation also cites difficulties in logistics and transport (linked to the pandemic), soaring container costs and significant delays in shipping, all of which have serious consequences for the agricultural machinery sector. It remains to be seen how long it will be before manufacturers pass on these rising costs to customers.
On a brighter note, Fendt’s Mr Gröblinghoff reckons the agricultural technology industry worldwide is experiencing a revival. “We have full order books for Fendt tractors and will use various measures to make up for the production backlog in the coming months to supply our customers worldwide.”