Italian farm equipment targets North American market sales

A farm equipment show in Bologna, Italy seems an unlikely place for a discussion about sudangrass hay production in California's Imperial Valley.

Nevertheless, Carlo Tonutti, owner of one of Italy's 1,000 farm tractor and implement manufacturers, is very interested in that market. He is testing his company's haying equipment there on sudangrass, admittedly one of the toughest forage crops to harvest.

Mature sudangrass can take on the rigidity of small trees, and it can be brutal on farm equipment. Nevertheless, that is where Tonutti believes his company has a market niche to fill and he wants to ensure that his equipment is up to the task. That is why he had equipment in the fields last season.

“Sudangrass really tears up equipment, but that is what we want. We want to learn about that market and what it takes to satisfy sudangrass farmers in the Imperial Valley,” said Tonutti. “We think it can be an important market for us, and we want to be ready for that market next year.”

It is not just California farming that Italian farm machinery manufacturers are interested in. Many of the companies exhibiting at the recent 34th annual International Agricultural and Gardening Machinery Exhibition (EIMA) in Bologna, Italy left no doubt that the U.S. is a key market for them. Many like Tonutti have been aggressively marketing their equipment in the U.S. and around the world. They view the U.S. as one of the more positive markets right now.

EIMA, organized by Italian National Union of Agricultural Machinery Manufacturers, featured more than 1,700 exhibitors (1,100 Italian manufacturers) in more than 20 giant exhibit halls totaling more than 1.6 million square feet housing 22,000 machinery models and innumerable other suppliers of agricultural parts and services. More than 100,000 people visit the show annually.

It makes the World Ag Expo in Tulare, Calif. look like a county fair.

Exports 70 percent

Italy annually produces $9 billion worth of farm equipment and exports about 70 percent of that. While Europe is the destination of the overwhelming majority Italian exports, America represents about 12 percent of Italian-made farm machinery exports. Tonutti, like several others manufacturers, is introducing larger, more rugged machines for the U.S. market where farmers put more hours on tractors and implements than in many other parts of the world.

No discussion about farming and farm equipment would be complete without addressing the subject of government subsidies. It is an ongoing debate. Americans claim Europeans receive subsidies that make it impossible for U.S. products to compete in Europe. Of course, Europeans claim the same thing about the American federal farm program. The debate over subsidies goes to the economic heart of farm machinery makers worldwide.

For Lucia Colombaro, customer care manager for Tonutti, “we love American subsidies.” She explained that European farmers are subsidized “not to produce crops”, and that is not good for European farm equipment manufacturers. In the U.S., she said farmers are subsidized to aid them in marketing crops and that affords a better market for Tonutti equipment.

Italian farm equipment is marketed in the U.S. through distributors, but many of the Italian manufacturers also have U.S. or Canadian warehouses and offices to provide quicker service and technical support.

One of those is Maschio/Gaspardo, which recently opened a warehouse/technical center in Rock Island, Ill., according to Vincenzo Abate, corporate export area manager. From there, the company services seven distributors throughout the U.S., and it is looking for more distributors.

“We are introducing a new vegetable planter exclusively for the North American market,” said Abate. “It will have a heavier frame than what we sell in Europe.” The frame will be made by an outside supplier in Illinois, and Gaspardo planter units will be shipped to Rock Island for assembly on the heavier frames. It will not be marketed through one of Gaspardo's seven distributors.

Direct marketing

“We will market the planter directly to growers,” said Abate. “The U.S. represents a huge market for us.”

Maschio/Gaspardo is one of many Italian manufactures which supply proprietary merchandise to U.S. manufacturers and suppliers. Companies like Polmac in Mirandola, Italy which makes spray nozzles and values for many companies in the U.S. Bondioli and Pavesi of Suzaara, Italy supplies power take off shafts for several U.S. equipment manufacturers.

Abate said his Maschio/Gaspardo recently signed an agreement to supply finishing mowers and tillers to Deere and Co. for the U.S. market. They will be manufactured in Italy, painted Deere green and shipped to the U.S.

Another major supplier of hay equipment is Sitrex, with two distribution locations in Houston, Texas, and Omaha, Neb. Sitrex is based in Perugia, Italy.

Sitrex is introducing a new, larger twin hay rake into the U.S. market. Again, it is more heavy duty than earlier models for the U.S. and North American market.

North America is such an important, growing market Sitrex is considering establishing a manufacturing plant in the U.S., according to Nadia Pannaci, Sitrex export manager.

There is no doubt American agriculture is a target market for the Italian manufacturers, even with the 20 percent difference in currency value between the Euro and the American dollar that makes European equipment more expensive in the U.S. Several companies at the Bologna show indicated they would absorb that added cost to remain competitive in the U.S. market.

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