For Gilson Farias, business development manager for the states of Paraná, Sao Paulo and Rio de Janeiro, the rate cut is more of a long term issue. The total credit available during the show was R$3 billion ($641 million at current exchange rates).
In February and March, two major agricultural shows are held in Southern Brazil. Attendees at both shows demonstrated a high level of interest in loans for machinery.
Deere & Co. will acquire Unimil, a Brazilian aftermarket parts supplier for sugarcane harvesters. “The reason [we] acquired this leading business in the sector of after-sale emphasizes the commitment [to] our customers,” said Cory Reed, president of the Deere’s Agriculture & Turf division.
During a call with Ag Equipment Intelligence regarding the current market situation in Brazil, the Brazilian Assn. of Machines and Equipment (Abimaq) blamed the lack of subsidized credit for the drop off in sales of farm tractors and combines in the past 2 months. In the beginning of 2019, the association forecast a 10% increase in total machinery sales.
The June report from Brazil’s Anfavea says that farm tractor sales in May fell 9.5% year-over-year, with 2,562 units sold. At the same time, sales were up 2.6% compared to the previous month, when 2,495 units were registered.
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In this episode of On the Record, brought to you by Associated Equipment Distributors, Deere Director of Investor Relations Josh Beal told JP Morgan analysts that the OEM is confident it will be “producing to demand” in fiscal year 2025.