Two recent trends might make you think that exporting US agricultural products and farming machinery may not be worth considering. Arriving at this conclusion without digging deeper into the significance of the global market to US farm equipment manufacturers and trends in specific markets might be ignoring huge potential.
First is the anti-globalization rhetoric we heard during the presidential election. While the threat of undoing long-standing trade agreements might complicate trade with certain markets, it certainly will not erase the demand for US agricultural products abroad. According to PriceWaterhouseCoopers the global farm equipment market will grow by 7% annually between 2016 and 2020 and reach the rather significant sum of $198.4 billion. With the U.S. currently exporting approximately $3.1 billion, there is plenty of room for growth and market share to acquire regardless of politics.
The second trend is the recent downturn in farm equipment exports due to the appreciation of the dollar against many global currencies. While this may have adversely impacted exports to many traditionally robust markets such as the APAC region, United Kingdom, Canada and Brazil, exports, to the APAC region, for example, are still expected to reach $74 billion by 2020 according to the Association of Equipment Manufacturers (AEM).
Despite the strong dollar, there are some real bright spots in the global marketplace. The AEM states that farm equipment exports to Germany were up by 10% and Mexico by 14% in the first half of 2016. They also report that U.S. farm equipment exports to Ukraine grew at an impressive 212% in the first half of 2016 as the country modernizes its agricultural sector. Exports to Central America increased by 12% to reach $620 million during the same time period. Given these trends, these specific markets are worth consideration if you’re not already exporting there or emphasizing if you are.
Looking to the future, the need to feed an exploding global population will become more acute and will drive more investment into the agricultural sectors of developing countries. The knock-on effect will be an increased need for agricultural products and equipment to plant, fertilize, plow and harvest crops in developing countries.
Uncertainty is not a reason to not explore international market potential. Given current and anticipated growth, global markets will remain attractive for some time to come. Trading only within U.S. borders or to our nearest neighbors limits revenue growth and potential to capture the increase in demand fueled by the need to feed the world’s population into the future.
Given this potential, investing in meeting the cultural and linguistic needs of your international customers is one way to ensure your success in these markets, especially in new markets where English proficiency is low. Providing information in local languages will help you attract customers in the first place and help you convert them into repeat customers. Gateway Globalization is here to help guide you through this process and provide you with translations that will give you the local presence to ensure your success.
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