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Agrimarketing : March 2015
: Assn of Equipment Manufacturers THE STATE OF THE AG EQUIPMENT BUSINESS Name: Charlie O’Brien Title: Vice President of Agriculture Services, Association of Equipment Manufacturers (AEM) since 2007, Milwaukee, WI Education: B.S. University of WisconsinMadison; MBA Drake University Career: Before joining AEM, he had been with John Deere Credit his entire career. AM: What are AEM’s primary activities? CO: AEM is a trade association that represents agricultural equipment manufacturers and provides various services to them. Our services include organizing trade shows, identifying, influencing and promoting technical issues, standards, and equipment safety, advocating on public policy issues, compiling and offering market intelligence and statistics to our members. Perhaps the most recognizable product outside the AEM membership is our statistical reporting of the tractor and combine sales for each month. However, another critical area concerns Regulatory Compliance with chemical substance legislation. Regulatory Compliance with chemical substance legislation is necessary to maintain market access. This includes compliance training for Conflict Minerals, REACH (Registration, Evaluation, Authorization and Restriction of Chemical Substances) and RoHS (Restriction of Hazardous Substances regulations.) AM: What are its major initiatives in the agricultural sector? CO:We support a key international technical group called the Agricultural Electronics Foundation (AEF). This global member-led group is responsible for working on the ISOBUS standards for communications between tractors. Regardless of color or brand of equipment used together, this is critical for proper electronic connectivity. AEF also works on other important areas such as electric 46 Agri Marketing s March 2015 drives, camera systems and Farm Management Information Systems. AEM serves as the Secretariat in a worldwide alliance of agricultural trade associations called Agrievloution. This global organization is responsible for sharing data, and information that will benefit our sector on the world stage promoting the significant contribution our equipment manufacturers in meeting the world demand for food, fuel, and fiber. We have also recently joined forces with the Commodity Classic and are excited to assist in growing that event to be the premier show in North America. AM: What is your analysis of ag machinery sales? CO:We are coming off a very good harvest last year with good yields resulting in lower commodity prices. This cycle benefits any of our members supplying equipment to the livestock sector having lower input feed costs. However, row crop equipment has seen a fairly dramatic decline in sales over the last six months. Although not surprising, the rate of decline was more than most members anticipated. I think it is important to note that although we are seeing dramatic decreases in sales of high horse power tractors and combines we are coming off of five very good years of equipment sales. The levels we are moving to are still at very good levels when you look at long term historical trends. The long term outlook is extremely positive for equipment manufactures. We are fortunate to be in a market with increased demand for the products that plant and harvest food with equipment to meet the ever increasing demand to feed a growing population. AM: What trends have you seen? CO: A more rapid pace of innovation resulting in increased productivity. What is introduced as new and exciting today is updated or replaced by new innovation in only a few years. And as we all know, data is king these days. We have only just begun to see the collection, analysis and use of data for decision making. Data will turn from being just reams of disorganized information to a valuable asset easily accessible and organized for the farmer to fully manage their operation. Equipment will be increasingly autonomous and will be programmed to perform the functions that today require an operator to ride on the machine. Future generations will look back and laugh at the way we rode around, giving direct performance commands to the equipment. AM: How does AgriRevolution benefit the industry? CO:Agrievolution is about farm machinery to feed the world. It is a global alliance of 13 organizations from different countries advocating for appropriate world-wide mechanization of agriculture. The alliance represents thousands of agricultural equipment manufacturing companies. With experts agreeing that we need 100% more food production by 2050, only 35 years from now, it is vital to do everything we can with machinery to contribute to achieving that goal. The alliance was established to facilitate worldwide collaboration within the agricultural equipment manufacturing industry. The 13 organizations that compose Agrievolution share the belief that in today’s global agricultural economy it is crucial that current issues and future challenges be viewed from and addressed from a global perspective. AM
January February 2015