Investment in agricultural machinery increased 55%as determined by the update of the Investment Index in Agricultural Machinery (Idima), analysis carried out by Carle & Andrioli Public Accountantsentitled “Investment in agricultural machinery harvest 2021/2022”.
The index considers data from the National Customs Directorate (DNA) of the imports of tractors, harvesters and seeders comparing what happened with respect to the previous campaign.
Positive and negative factors
As indicated in the work submitted to The Observer, the good performance of investment in agriculture was due to several factors that contributed positively.
First of all, the high prices of agricultural products that improved profitability and ability to generate funds.
In addition, a productive framework characterized by the expansion of planted areas and good yieldswhich determined the increase in production and income from agriculture.
Another factor is the better conditions in bank financing for agricultural investment and availability of tax benefits for investment.
For its part, in the harvest The drop in the price of the dollar (of 9%) and the upward trend in production costs due to the rise in the prices of inputs and fuels had a negative impact.It indicated.
The dynamism of the investment allows to improve the indicator of investment per planted hectare, with a potential increase in productive yields, rationalization of costs and the profitability of agricultural activity.
In the last campaign, the planted area increased 14% and there is a growth in the planting area of the winter crops of the new harvest.
For its part, The trend of increase in average agricultural productivity of the last five years continuesaccording to the Agricultural Weighted Productivity Index (IPPA), also prepared by Carle & Andrioli.
investment growth
The aforementioned growth of 55% means that there are three consecutive harvests of growth in agricultural investment: 45% in 2019/20; 28% in 2020/21; and 55% in the last campaign.
The current level of investment is triple that of three years ago.
In the last decade, the index showed a growth path until 2014, followed by significant drops in the two subsequent harvests and then remained at low levels to grow again in the last three years.
The indicator is currently at the highest level of the last eight harvestsalthough it has not yet reached its historical maximum.
EO
Investment Characteristics
In the last agricultural campaign, seeders, tractors and harvesters were imported for a total of US$ 195 million. The highest investment values by type of equipment corresponded to tractors and harvesters.
There were increases in all the components of the index, the largest of which corresponded to harvesters (70%), in seeders it grew 53% and in tractors 46%..
In the investment figures of the last campaign two commercial aspects had an impact: the delay in the importation and delivery of agricultural machinery due to supply difficulties and the increase in the price of equipment of around 20%..
Regarding the origins of agricultural investment in the year, the main ones were Brazil, the United States and the European Union, which accounted for 80% of imported values. Agricultural equipment was also imported from Mexico, India, Argentina, China and Canada.
The work considers, as a context, that investments in agriculture are growing at a higher rate than other sectors. The Industry Investment in Machinery and Equipment Index (prepared by the Chamber of Industries of Uruguay) grew 12% in the last year and the general index of the economy 27%. For its part, gross fixed capital formation increased 15% in 2021, according to data from the National Accounts.
The increase in agricultural investment in our country also occurred in other countries in the region. In Argentina, according to a report by the Institute for the Study of Argentine and Latin American Reality, in the first quarter of 2022 the manufacture of agricultural machinery was 25% higher than the average of the last decade and reached the highest record of the last 13 years.
john samuel
The investment was found in the three segments analyzed: tractors, planters and harvesters.
Investment per planted hectare
Another indicator of the behavior of agricultural investment is the investment in machinery per cultivated hectare. In the last campaign, the investment per hectare grew to US$ 98, higher than the US$ 67 of the previous one and allowed reaching investment replacement levels.
EO
Language Methodology
The purchase of capital goods in Uruguay is carried out in a high percentage through imports, either directly or indirectly. Based on this premise, the Idima is used as a proxy to evaluate the evolution of agricultural investment. It does so by considering constant dollar imports of tractors, seeders, and harvesters from DNA data. For the 2021/22 harvest, the Idima value stood at 96 (base 1996 = 100).
