Farmers Guardian machinery editor Toby Whatley and Agriconnect publisher Ben Briggs report from the German tractor and farm machinery show Agritechnica, which took place in November. Discussing the machinery market, this is a timely look ahead to LAMMA Show, taking place at the NEC, Birmingham, on January 17-18, 2024.
Farmers Guardian machinery editor Toby Whatley and Agriconnect publisher Ben Briggs report from the German tractor and farm machinery show Agritechnica, which took place in November. Discussing the machinery market, this is a timely look ahead to LAMMA Show, taking place at the NEC, Birmingham, on January 17-18, 2024.
Farming simulator is coming to the UK giant's software. The creators of the globally successful simulation game will attend Lamar, 24, in Birmingham in January. Watch the e-sports phenomenon Farming Simulator League take place on UK soil for the first time or try out the multi-million selling farming simulator. 22 for yourself. Free tickets are available. See you on the virtual fields. You're listening to the Farmers Guardian podcast. 470,000 people from 149 countries visited Germany in November for Machinery show Aqua Technica. Two of those in attendance were farmers Guardians machinery editor Toby Whatley and publisher Ben Brakes. On this week's podcast, they discuss the sheer scale of the events and modern farm machinery. They also take a look ahead to Llama show, which is run by its parent company, Agri Connect and will take place at the NEC in Birmingham on January 17th to the 18th, 2024. More details on Llama are available at Amazon.com. But now let's head back to Agri Technica with Ben and Toby. Hello and welcome to the Farmers Guardian podcast, brought here from Agri Technical in Germany, the largest machinery show in the world and utterly mind boggling the absolute scale of it. Here in Hannover, in northern Germany. I'm joined by our head of machinery at Farmers Guardian and Agri Connect's Toby Whatley. And Toby, I just want to ask you really what your highlights of the show have been so far. So looking around the show here, it's it's academic. It's every two years. We haven't seen it now for four years due to COVID. And it's always been an event that's driven on quite big innovations, very big product reveals. What we're seeing this time, which is different to the last four or five years or four or five editions of the show is a lot more manufacturer. Focus on technology, on maybe perhaps smaller updates to machines. But the big drive across the board is data is how manufacturers are collecting data, how they're disseminating that data to the machine owners and also to the dealers from a service perspective. And how longer term owners will be more connected through, you know, similar device you're recording this on through a smartphone. How use of machinery will use their smartphones to monitor where the machines are, what they're doing, what their costs of the machines are. And also, you know, we can't escape at the moment. There is a very, very big pressure on machine manufacturers to recognize that global financial markets have made borrowing money significantly more expensive. Now, we're on a stand at the moment surrounded by sugar beet and potato equipment and just looking at the size of the equipment. Now, that hasn't really changed for the pressure on those industries to make money and where those margins are and where they're whether, you know, where they were covered are significantly more in the limelight now than they were four years ago. So we're still here in hole 26 under the leaf of a giant and sugar beet. And behind us is the row pertaining to six. And I was just wondering if you can explain. I think this is really indicative of a lot of what I've seen in AI great technique, which is the pure scale of the equipment on show is absolutely vast. And I think it shows really how farming is is evolving, but ultimately how the kits is getting bigger. And we can come onto that a little bit later on about some interesting comments from that case when they were launching the new F-Series combine. But if you can just tell the listeners just what were what was stood in front of here, maybe the price and and who's the audience for it. So that so in front of us it is Tiger six which is aa66 wheel drive, a six row sugar beet harvester and a product that you know, we've seen which obviously should be harvested for a very, very long time. The tiger range has been out for some time as a product where it's interesting perhaps in a world of machineries that if we were to look at, say, combine harvesters, they are designed to harvest multiple crops. So from a growers point of view, you can use one machine for multiple income sources. The tiger or any sugar harvesting machine or perhaps potato harvesting as well. He's focused on one crop now. Sugar beet particularly is only a sugar beet harvester and in the UK we're producing sugar for effectively one customer. And if if we were looking at how that fits into our business, we're putting enormous investment into one machine for one crop, for one customer with realistically one end use. And to think the size of this machine now it's like six is one of the biggest, biggest in the world as a, as a harvester. And it is absolutely enormous in terms of its power, in terms of its its operating size, weight capacity, its ability to travel in sugar beet is typically lifted in some very, very challenging conditions. But where it where it's home has always been is in a in a crop that was part of a rotation was quite profitable. And I think and we're seeing it you know, this is fairly topical at the moment that we've seen the the recent news with the NFU and the British Sugar on there that contract prices for next season. Factors like that change buyer confidence in in how they're going to invest in the crop and fundamentally in fact the buyers of old manufacturers of machines like this. Now the German sugar market is quite different. The powdered sugar market is quite different. But fundamentally we're looking at Europe going how we produce our food and how our food production is tailored around increasingly large machinery to account for less and less availability of workforce. So what you've tucked into there is two of the overarching themes really of this great technique here, and it was referenced on the first morning we were here at the center, an AGCO press conference, which was one of the most the slickest press conferences I've ever been to. But in multiple languages with multiple translations. And I think that's really what struck me about agri technical, is that it is truly it's truly a global event. But for all that is said about it being a global event, two of the main things and overshadowing it to a certain extent are the rise in interest rates around the world and how that impacts borrowing. And also, as we say, the scale of the the scale of the machinery involved, partly as a result of technological, technological advances, but also the need to solve a bit of a labor problem as well. And so as we look out over into 2024, obviously we've got a show coming up in January at the NSC, which is the UK's leading machinery show. And but the theme seems to be around that kind of restriction in borrowing and maybe a slight nervousness going into next year. Yeah. So I mean, we agriculture and its associated buying in machinery has for the last realistically 20 years operated on quite cheap money. Now we'll sit here and think 2.2% 3% borrowing would be would be incredible now. But at the time for some people that was too much. Now, if we're thinking about how that's affected the mortgage market, we're all you know, we've all seen that and seen the effect of that. And to be honest, machinery is very, very similar. If you're investing six £700,000 in machinery, an increased rate from, you know, 2% to 8% to 10% is going to make a significant difference on if you actually buy the product or you don't. And when you align that with a global market, which maybe is and you know, commodity prices are making the money that they were or the commodity prices are so, you know, variable with with the wider global, you know, situation with wars, the Middle East, the war in Ukraine, all of these factors are going to change. Growers thinking what if I buy this machine and cost it over five years, eight years? I don't know where the world is going to be in eight years time and I'm still going to have to pay for it. And all of those factors, if you're sitting down looking at, particularly if you have existing machinery, there will be an appetite for something to go. I just want a change in. I'll keep I'll make it last a bit longer. I look to remanufacturing, I look to work it differently. But the days of effectively every three years, every five years, let's buy a new machinery. I think I've probably gone for a lot of businesses. I think it's a fascinating dynamic as well in the sense that the there's been a recovery in the global supply supply chains. Well, that's going to be matched by restraint and from farmers and growers around the buying patterns simply because of those issues we've discussed around things like the interest rates. Having said that, the sheer scale of this event, I mean, if anybody's never been to agri technical, it is one of those events where it probably takes you to two and a half days to get round every single hole just because of the size of the site here in Hanover and also the a lot of the major manufacturers, the global ag manufacturers, lots of John Deere and New Holland class are all here in a serious, serious way. I mean, what's your what's been your highlight from from those big names a lot back in the UK would recognize so you're looking at, say, John John Deere, John Deere class, New Holland case, all of these manufacturers have put put huge, huge input onto their their products, their stands. You can effectively see one in every model they produce, which is which is, you know, as a spectacle is quite incredible. I mean, highlight, I guess the takeaway highlight in terms of manufacturers will see would be the new C 11 from New Holland. So New Orleans largest combine ever produced nearly an 800 horsepower machine developed to go into that that that big top end combined market which largely didn't exist five years ago. You know combines have got bigger and bigger and bigger. This is as we've seen with all machinery, particularly harvesting machinery, grain, harvest when changing weather patterns has driven a need to effectively cut more to two to allow you greater productivity in a smaller working window, dealing with larger farm sizes but also higher crop yields as well. I mean, to think that the c r 11 is being delivered with a with an up to 54 header on it. And I can remember when I started working in a dealership age 15, the biggest header I'd seen was 25 foot and I thought that was as big as it could ever be. And you're looking at one now, which is double that. Now there's a practicalities of how you get a 50 foot head around parts of the UK, let's say. But the growers that are involved with it, the growers that are in this business for the long term, and these might be, you know, more commercial landowners than perhaps private individuals, they recognize that you've got to either go big or go home in some respects. And this with with increases in staff wages, increases in labor costs, you've got to spread that labor cost over a wider, wider area of land. What we're what we're also saying, which is which I guess is quite refreshing, is that there is a recognition now with all manufacturers that we need to look at alternative fuels, We need to look at other energy sources other than diesel. So there's we've seen quite a lot of electric tele handlers, concepts, prototypes and sort of sort of pre-production machines. But the recognition that actually we've been we've been running, running agriculture, well, it was coal, and then we went home, we went to paraffin and diesel, but we've been using fossil fuels for about 250 years. And in all forms of what we do, it doesn't really matter how big or small the machine was. It was effectively fossil fuel powered. And we're recognizing now that there is an energy mix in that some machines will be electric, some might run on hydrogen, some might run on methane, some are methanol. I mean, John Deere has shown a large, you know, self-avowed harvester sized ethanol engine. Now, the John Deere market, the home market is a massive producer of corn. So you're obviously producing a lot of bioethanol, but you're sort of tapping into what John Deere as a manufacturer are going, Yeah, we need to do an alternative fuel, but that alternative fuel also needs to align to our core business to where they get that energy from. And I think that's that's quite encouraging because agriculture does have a place to produce food, but also agriculture will have an increasingly large place to produce energy. And, you know, we've got the capacity to do it. But also there is the ambition for manufacturers to produce things which will deliver that, and we'll deliver that in different ways. Just for context, for those listening, Toby said that the size of a header has gone from 25 foot to over 50 foot in his time. And I know that he when he's talking about ethanol and paraffin and coal, he may sound older than he actually is, but he's actually only in his mid thirties. But I think the scale of that change over the past 20 years to show and just show how things are moving, it shows how the science of agricultural machines are just increasing all the time. And I think one of the one of the really eye opening things for me was the case press conference when they launched their new HFC combine, which is a 700 horsepower plus combined, which they are really aggressively backing to give them back market share in Europe. Now that is a diesel powered machine. It's high horsepower. It's the kind of thing that goes on post is on people's walls. Well, there was also a comment made by one of their American staff members who was originated from South Dakota, and he made the point that in South Dakota, when he was growing up, probably in the 1870s and eighties, there was a farming family every half now, every half mile. And his point was that now there's nobody. There's four or five different corporations or families running the entire region. And and therefore case he's looking at technology that fills that labor gap. And I kind of feel that, you know, as we saw in the era of our great technique, are in front of some absolutely huge pieces of machinery. It's not only about efficiency, but it is about the wider labor market within agriculture and how we get the job done with fewer people. So that's something that we can't escape from. And I guess how close is autonomy is something we are seeing here more and more? And the the the interesting aspect in my view on autonomy is that we're not seeing autonomous tractors generally that are very, very large. And we've we've made tractors bigger and bigger and bigger to understandably account for a labor shortage. So a bigger tractor can pull a wider implements or is more productive so that that that man per hectare ratio is changing. So we're getting, you know, more per month very, very simple maths. If we change our system and say actually and there is, there is some arguments and some research will say that 80% of your field damage in terms of soil structure is caused by very big machinery. So if we get rid of the big machines, we actually reduce the amount of energy we need to remove the problems caused by the machine itself. So simple maths will tell you that will make is this is a financial saving, but with autonomy. When you start to look at machines working 24 hours a day, maybe you have multiple machines that have one one overarching control of someone managing that fleet of smaller machines, suddenly you're back to effectively implements that. You know, my grandfather would have seen it, you know, implements it at two meters wide. That would have been imperial. That is a measurement, I'm sure. But machines that were that was small and suited to smaller, what we would describe as maybe traditional family farm. But a business instead of using multiple machines that are very, very wide, they using an increasing fleet of even more little machines that are all working on a wider area basis or a wider time basis. And once you remove the provisions for an operator, a kind of air conditioning seat suspension, the machine itself is actually quite a lot cheaper because it becomes some wheels or tracks or a combination of both an engine, maybe it may be a drive line of a hybrid nature and we're seeing definitely an autonomy as a core autonomy, as a smaller machine, but also the option to make very big machines autonomous in their use because there will be certain jobs they can do that are autonomous and they'll be certain jobs to do. They can't. And to give the operator or the owner the crossover between the two. And I think we will see more of that as retrofit able kit to turn something that isn't autonomous into autonomous to suit repetitive fairly low low skill requirement tasks. Yeah and I think it's exciting emergence of that technology, which is really in a way defined this great technique. The amount of big launches and I believe is is fewer than they have been in previous years. But the and but there is definitely that focus on it and the interests way less of a focus here at this event than there is in the UK on elements around greening around the net zero although the organized says that is in the background rumbling on and Toby thank you for the time being. We will catch up with Iran and I'm going to go and catch up with a few different manufacturers and I will. Toby and I have wandered over to the absolutely ginormous John Deere stand in Hole 13, one of the biggest stands and exhibitions in the whole of our great technique. And we're here with Chris Wilcher from John Deere, UK. And and Chris, just what's been your impression of VI great technical this year? I mean it's back in totality for the first time in a while. How important is it to to John Deere? it's a massively important show for us in our sort of calendar. Yes, the last show in 2019. So I think there's also there's been a massive amount of build up for this. And I don't think it's it's not failed to disappoint. You know, it's just been amazing. I think what's quite interesting for us is, you know, the crowds here, I mean, today, I guess, is the first big public day is just massively busy. Lots of UK and Irish customers, which is great to see. So, you know, they've all made that effort to to to come along and see what we do. And I think whether you noticed, as you will understand, I think on purpose we put a bit more space on our stunts. So there's a lot of people on here. So that was really good. And we've tried to lay the stand that makes a bit more sense where we have a production system, so whether it be the dairy and livestock, so from planting through to protection, through harvesting and then feeding cows, you know, in one part one half of the stand and the other half of the stand, we've we've sort of designated to our small grains. So again, from cultivation, through drilling, through crop care and the protection or through to harvesting, and there may be a bit of autumn cultivation at the end. So again, a real nice way to demonstrate a lot of the products, services solutions that we have because of course you don't just buy attracted to do one job, you generally buy it to partake in that whole production system. And hopefully we've got something to show through that entire range really, and the technology to support it. So one of the themes I felt this is a great technique is the fact that it's not necessarily being about big launches, it's about the kind of iteration of technology or precision farming techniques or whatever it might be. And what's the focus being for John Deere? Absolutely. You know, I think in reality there's not a huge amount of brand spanking new product here. We've got a few things. You know, I knew 300 M there's a first there's a some first public showings of some other products, things like new camper heads, signature addition on six R that's first to the show, a few little bits of that. But I think the bit that we are, you know, again really proud to show is, you know, the integration of all the technology within all of these. So you know, and the show hopefully shows that off with some of the the big screens that we've got. We have a technology hub, you know, positioned every point along that production system and whether that be our partnership through some of our connected software companies, you know, whether you're doing a prescription map or whether you're using something like Harvest Lab now and you combine and you're feeding the AI to then to get a nitrogen usage efficiency, get that right, a map that you can use into some of the decision making for what you put into the ground next year. You know, it's all those technology steps that I think never before have really come to life like we're trying to show off here in this other show. And just finally, a lot of people Toby and I have been talking to, it's been about maybe look into 20, 24 with kind of optimism in the fact that the supply chains are back up and running, but also maybe a bit of caution in the sense that interest rates behind not are obviously increasing. The cost of borrowing is something. John. There's a while you obviously be aware of, but something if I tuned in. Absolutely. And you know, the last couple of years of just been a bit bonkers in there. You know, we've had long lead times. You know, maybe people used to order a tractor in November ready for the next spring, but they were then ordering it in April, May. So, you know, to be that far ahead of supply chains have caught up. You know, I think most manufacturers and our dealer network have got some inventory. You know, we've we're pleased that we've got the whole back together. And I think we're coming off a high back to bit more normal business, really. So. So yes, I think whilst it's a different year, I think there's still some optimism out there. I'm I'm very hopeful that that will continue into next spring. I think we've got a bit of a wet autumn, which is probably just dampening the mood, no pun intended. But, you know, again, hopefully, you know, as we get closer this year into next spring, it sort of just again, gets a bit more normalized. Well, thank you for your time, Chris. And so we're going to find our way through the crowds and try and head for the train station in the airport now. Well, thanks for your time. Thank you. Thanks. See, Toby and I have made it to Bremen Airport where I'm having a messy mixed drink. My own nasal mix, apparently, which is Coke and Fanta. Is that right? So it's a cultural delight. I can't remember the history of why it's a culture of light, but it's one of the weirdest tasting things happen. It's it's quite surreal. On the palate. We're watching a group of clearly English young farmers walk through Bremen airport, and you can tell they're English because they're wearing the requisite jeans, shovels and crucially, Taylor boots. And interestingly, Toby, we haven't really seen a lot of that daily boot attire on the show because I think mainly the German farmers, they they like a sports shoe or even a white shoe. Well, is it interesting that you have gone there because there is a lot of training shoe worn without any interest of doing any training, many of which are white. And and Mr. Briggs here was delighted by the shape and the cut of the trouser, which again was a bit of a surprise. And that's a somewhat of a view into my mind that nobody really needs around the value of a white train. I'm the of a pair of trousers to go with it, but it has been, has been really interesting. You do have these cultural little things. It won't be like that on llama in January at the NSC, I can assure you it will be wall to wall tailored boots and no trainers chosen for comfort. But we've digressed incredibly badly. Toby is we're here. We're waiting to board on a flight back to the UK. But what's what's your main takeaway from the event this week, The change compared to when I was here, what, four years ago and then nearly ten years ago is the amount of focus, as we said, touched on earlier is just it's day to day to data and an information from farming and how farmers use that information and a talk on fuel consumption, which let's be honest, wasn't really a thing. Certainly nine years ago I wasn't doing. No. And I think the we said it before. I think the whole greening the net zero element is not as prevalent here in Germany as it is back in the UK. It will form a big part of crop tech coming up and Lima in the new Year. But I think that data thing is absolutely key. It's it's emerging more and more farmers are starting to understand it. The technology is getting easier to use and there are big questions lying ahead about who who owns that ultimately. And I mean, as you look to next year, what do you see for the machinery market in 2024 and what do you think are the things you're going to be covering from this event going forward in the pages of FGF and RF? So the from my perspective that you listen to lots of manufacturers in there saying that, okay, new machine market is cooling use machine new market is softening. Now we all know that's largely down to the fact that finance isn't the same way it was, well, six months ago. Probably what I think we're going to be looking at is how you can use utilize existing product or use use product in in a way that perhaps adds value to a business that isn't isn't necessarily just dependent on just big capital expenditure. And there will be a focus on, you know, you look at some big as a sort of great examples in that historically we've always changed machines on a certain, you know, certain yearly rotation based three years, five years, whatever. And you're listening to the now they're saying actually we're going to keep these machines longer, you know, seven years, eight years. There might even be machine to change machines at ten years that that that five years ago they would change every three years that a question and I think we need to reflect that and how we talk about running machines perhaps running machines for longer looking at service life looking at longer service life items that original owners would have never really worried about. That now is becoming a topic for them to consider and work on. And I think come llama in in January when we'll be what, two months further on, I think there's more of an acceptance that this is how the industry will be funded in the future, certainly for the next couple of years and buyer decisions will reflect that. And I think also buyers will probably be looking to buy the exact specification they need, not what the dealer has and probably said, yeah, it's I think it's going to be very, very interesting how things unfold in 2024 against the backdrop of those rising borrowing costs but also the the slightly tumultuous harvest and weather events we've had over the past year. But as we come to the end of our German journey, we've we've learned that the German train system will see as nice. Rolling stock doesn't run any better than ours, does it? No. We got on the train. That wasn't was the main thing. It was going to Bremen, then it wasn't getting to Bremen. Then we got off on a train. But the illustrious publisher here was delighted by the concept of a double decker train. That did bring more joy than I thought it would have done. Well, it's about simple things, you know, double decker trains, a a bottle of matzo matzo mix, and spotting young farmers who, you know, despite the change in footwear and the difference in footwear between England and Germany, you can always spot a farmer wherever you are. So from me, Ben Briggs, and from him, Toby Whatley. We're going to sign off from from Bremen after a few days, Agritech Netcare in Hanover and will hopefully see as many of you as possible llama in 2024 on my illustrious run, there's one more point. The sausages do not fit in the bread by some some margin. If you love pork and you love machinery, agritech maker in Germany is the place to be. Good bye for now.