Search

East Anglian farm machine manufacturers discuss industry prospects at LAMMA trade show

PUBLISHED: 08:06 23 January 2016 | UPDATED: 08:06 23 January 2016

LAMMA 2016 at the East of England Showground. Picture: Ian Burt

LAMMA 2016 at the East of England Showground. Picture: Ian Burt

Archant

The finest East Anglian engineering was on display at LAMMA 2016, the UK’s largest agricultural machinery show – but with farm incomes dropping, how confident are the region’s manufacturers about the year ahead?

The LAMMA 2016 trade show featured an impressive miscellany of machinery, inspired by the sheer variety of crops and cultivation in modern agriculture.

And as cashflows tighten and margins shrink on farms, the drive for efficiency and innovation has become the most sought-after selling point for the equipment suppliers competing for sales at the UK’s largest agricultural machinery show.

Manufacturers and dealers from across East Anglia were among the 900 exhibitors at the two-day event which brought thousands of farmers to the East of England Showground in Peterborough.

And their opinions about the current market situation were just as varied as the collection of equipment on offer.

With commodity prices down across many sectors, some machine suppliers are experiencing a knock-on effect on trade, as farmers delay decisions to invest in expensive machinery.

But many are facing 2016 with optimism, saying that market volatility can be overcome by building a diverse product portfolio, searching out new markets – and constantly innovating to inspire demand for their new products.

• Tony Hewitt is area sales manager at PMC Harvesters in Fakenham, which sells its giant machines across Europe and to countries including Australia, New Zealand and Japan.

The firm already has orders for 15 of its PMC 1089 Pea and Broad Bean Harvester, compared to 12 last year – with a list price of £410,000 each.

“For us, 2016 is looking like it is going to be a very good year already,” said Mr Hewitt. “The big thing last year was that we sold three to a new customer in Israel just before Christmas.

“The pea harvesters have a life cycle. Every five to seven years the customers will change them for a newer model. A lot of that will be because of the innovation and how that model progresses.

“The engine in the 1089 is now more fuel efficient, it has got four-wheel steering so it is more manoeuvrable, and it has all touch-screen monitors. We need to keep innovating and keep improving.”

• Another Norfolk manufacturer which has made a confident start to the year is George Moate Ltd, based in North Walsham, which was displaying its Tillerstar, a machine which turns a stubble field into a seed bed in one pass.

Commercial director Lesley Pratt said: “Our big shock after Christmas was taking six orders in four days. Two of those are going out to Saudi Arabia, where they are growing a lot of potatoes. That was a repeat order. We have another one going to Slovenia.

“2016 will be much better than 2015. We can see that already. Last year people were much more cautious about investment. The Tillerstar is still seen as an innovative machine, which involves farmers changing their practices, so people are naturally going to be cautious. Saying that, it is easy to sell our machines because of the savings which can be made with it. Our customers are saving between £245 and £325 per hectare, because its a single-pass machine.”

• Finding export customers has also been a successful strategy for Norwich-based John Deere dealer Ben Burgess.

Sales manager Ben Turner said: “We have just sent two S Series combines to Chile, which were sold through a dealer in Belgium. “We have got a self-propelled sprayer just gone to Denmark, and some early guidance systems which would be considered almost obsolete here which we have sold to Croatia. The Spanish market is just beginning to pick up again, and the UK market is not bad.

“People are still buying. I think steady is not a bad way to describe it. The more agri-business focused companies are continuing to trade as they always would, and sticking to their change policies.

“The Euro exchange rate was 1.42 at the start of December, but now its 1.30 to the pound. That is a good swing and it has started to bring some of these European customers back on.

“Whenever there is one currency up, there’s another one that’s down. So when one door closes, another opens.”

• CTM Harpley Engineering, based near Fakenham, is best known for its sugar beet cleaner-loaders.

Sales director Nigel Mountain said his sector of the machine trade had suffered as a result of low sugar beet prices, and he thought it might take a while to recover.

“The commodity prices are far too low, and the oil prices are far too low, which brings the cost of production down in less efficient farming countries, which definitely gives us a knock-on,” he said.

“We started last year very well, and we sold four new ROPA Tiger 5 harvesters and we took some early orders for our own cleaner loaders, but as the year went on, with the announcement of the lower price for 2016 sugar beet, the market fell away. The pound is very strong, which made it impossible to export anything.

“The world market has been suppressed with the low commodity prices so it has made it very difficult, and margins were greatly reduced. But we have ended the year with a little bit more optimism, perhaps not for 2016, but we feel in 2017 it should come back again.”

• John Rupp, a director of Greencrop Irrigation, based in Beeston, near Dereham, said it was the potato sector which had the greatest effect on his business.

“Last year was not too bad. The potato industry started a bit slow, but it improved and there is a bit more confidence on the potato side. But for farming in general there is low prices and a really strong pound. The potato industry is becoming fewer people with larger acreages, and they are looking for more technology and more efficient machines.

“Probably for 2016 we might see a decline in farming expenditure, because the farm incomes have come down, which will affect the manufacturing and machinery industry.”

However, Mr Rupp said other areas of the company were growing, such as systems to clean the dirty water from AD plants, where sales had trebled.

“If one thing goes down, another goes up,” he said. “You can’t keep all your eggs in one basket.”

• Another company trying to ride out the volatility in the irrigation market is Ellis Irrigation, from Flordon, near Long Stratton.

Sales manager Dennis Temple said: “There have been easier and more lucrative years. It has been a bit quiet. What is tending to happen is in previous years you would have a lot of orders placed well before the end of the year for the oncoming irrigation season, but now it is all ‘just in time’.

“With irrigation you have a 10-year cycle, and it is directly proportional to farming and the price they are getting for their crops.

In every 10 years, three will be three good years, one will be absolutely outstanding, three will be pretty poor and one will be abysmal, while the others will be OK.

“Last year and this year have not been disastrously bad. I would say it is somewhere between not-so-good and normal.”

• Herbert Engineering, a Wisbech-based manufacturer of agricultural handling systems, was demonstrating its Vector wave motion grader, which was developed after research into improving the performance and accuracy of screen-sizing for potatoes.

Marketing director Jo Herbert said: “We are having a really good January.

“Despite the tough potato prices, we are finding there is a very strong interest this year. We have already won some significant orders in the ag sector, which is sending some really positive signals.

“I think the key is finding flexible solutions for the farmers to manage their cashflow, We are doing 0pc finance deals and deferred payment for six months, which is not great for our cashflow, but we want to secure that business from our customers. It is all about affordable quality.

“Our core business is the potatoes and root vegetables, but we are finding that we are selling more of the different equipment, like leek harvesters and pumpkin washers. The demand is changing. We are eating different foods and people are growing different crops.”

Skills shortage

With product innovation seen as a crucial factor in securing future orders for replacement equipment, one manufacturer has raised concerns about a shortage of skilled design engineers.

Neal Sands, owner of Sands Agricultural Machinery from Stalham, was at LAMMA to demonstrate the firm’s range of self-propelled sprayers.

He said: “The biggest problem we are finding is personnel. We are desperate for good design engineers and service engineers. We have done everything we can to recruit them, but they just aren’t there.

“There is no way we are cutting back on design and development. That is the most important thing to keep going.

“But a lot of the staff are my sort of age and I don’t really know where the next generation are coming from.”

Mr Sands said the general downturn in the agricultural economy had split his market.

“It is definitely harder,” he said. “The margins are disappearing.

“A lot of people are in a go-ahead mood, but we have got 50pc saying they will hang on for another year. It is 50/50. Some are really despondent but some are going forward.

“Because of the sort of equipment we have, our customers are going to be the bigger boys, and the big boys seem to be managing to keep going. I think it will be a couple of years before we turn the corner.

“I am very pleased and surprised at the volume of people at the show, and the good interest we have had on the stand. We have a lot of work to do to turn them into orders, but it is not all doom and gloom.”

Related articles

Search hundreds of local jobs at Jobs24

Management Jobs

Show Job Lists

Newsletter Sign Up

Sign up to the following newsletters:

Sign up to receive our regular email newsletter

Insight

The brightest stars in our business community were recognised last night as the winners of the EDP Business Awards 2017 were revealed.

Consumer borrowing is growing at 10% a year and inflation has hit 3%, meaning that the Bank of England’s decision on interest rates was the most eagerly-anticipated for years. BETHANY WHYMARK explores the potential impact on savers and borrowers.

Green 100

cover

Enjoy the Green 100
digital edition

Read

Meet the Team

Mark Shields

Business Editor

|

Chris Hill

Agricultural and Farming Editor

|

Business Most Read

Awards

Norfolk Future 50 EDP Business Awards Green 100