Top farm-equipment makers from Deere & Co. (DE) to Agco Corp. (AGCO) expect demand in Brazil’s $10 billion market to drop in 2014 as rising borrowing costs and slumping crop prices thwart a boom that lifted sales to a record this year.
Deere, the maker of John Deere harrows and combines, sees sales in Brazil falling as much as 10 percent in 2014, country head Paulo Herrmann said in an interview. Agco Corp., which manufactures Massey Ferguson tractors, estimates sales may drop at the same rate, South America Marketing Director Alfredo Jobke said from Canoas, in southern Brazil.
Central bankers in Brazil, the biggest exporter of soybeans and sugar, carried out the steepest rate increases among major economies this year to tame inflation. Rising costs to finance farm-machinery purchases in 2014 will follow a 40 percent plunge in international corn prices in the past year and an 18 percent decline for soybeans.
“We expect an adjustment after a very strong year,” Herrmann said from Indaiatuba, Brazil. “Next year the stars won’t be so perfectly aligned.”
Deere and Agco, the world’s largest and third-biggest crop-machinery makers, have a combined share of about 68 percent of the Brazilian market. Agco, based in Duluth, Georgia, is the biggest supplier in the country with about 47 percent of the market, while Moline, Illinois-based Deere has about 21 percent.
Deere, the maker of John Deere harrows and combines, sees sales in Brazil falling as much as 10 percent in 2014, country head Paulo Herrmann said in an interview. Agco Corp., which manufactures Massey Ferguson tractors, estimates sales may drop at the same rate, South America Marketing Director Alfredo Jobke said from Canoas, in southern Brazil.
Central bankers in Brazil, the biggest exporter of soybeans and sugar, carried out the steepest rate increases among major economies this year to tame inflation. Rising costs to finance farm-machinery purchases in 2014 will follow a 40 percent plunge in international corn prices in the past year and an 18 percent decline for soybeans.
“We expect an adjustment after a very strong year,” Herrmann said from Indaiatuba, Brazil. “Next year the stars won’t be so perfectly aligned.”
Deere and Agco, the world’s largest and third-biggest crop-machinery makers, have a combined share of about 68 percent of the Brazilian market. Agco, based in Duluth, Georgia, is the biggest supplier in the country with about 47 percent of the market, while Moline, Illinois-based Deere has about 21 percent.