WASHINGTON, Oct. 28, 2015 - Export statistics and the opinions of some American agricultural equipment dealers suggest U.S. Trade Development Agency (USTDA) tours that bring farmers from East and South Africa to the U.S. to show off American products on their home turf are working as intended.

Long-term growth in farm equipment sales to these regions have had to overcome substantial hurdles in recent years:

  •  The U.S. dollar’s value, which has soared against African currencies, is making U.S. products much more expensive there. The South African rand, for example, has lost half its value against the U.S. currency in four years.
  •  Severe drought in parts of East and South Africa, has created extra food demand there but dashed demand for equipment and farming inputs.
  •  Transport costs are painfully high. “Africa is just about the most costly place in the world to ship anything,” says Ken Peoples, who manages African exports promotion projects for USTDA. To deliver farm equipment safely, he says, machines are often disassembled and sealed in 40-foot containers. Then after reaching ports such as Pointe-Noire in the Republic of the Congo or Luanda in Angola, the costs can double to deliver equipment inland, he says.
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    Against such constraints USTDA conducted its fourth “reverse trade mission” into the U.S. Corn Belt and Northern Plains since 2010, ushering large-scale African farmers and agribusiness operators to conferences and individual meetings this summer with equipment dealers and other ag companies and service providers.

    USTDA estimates its Sub-Saharan reverse missions each foster about $10 million in U.S. exports. But Peoples says the results are very hard to score because, first, “it takes [the African buyers] at least 18 months, maybe 36 months, before they make a purchase.”
     
    Also, in Africa’s emerging economies, customers’ identities change along with the rapid shifts in ownership and organization of agribusinesses, he notes. Nonetheless, since a recent mission in August, “there have been a great deal more equipment lists and bidding proposals between the delegates and the [U.S.] companies than there has ever been after the previous missions. So I’m cautiously optimistic.”


    Demand from Africa is primarily for used farm machinery that’s been well maintained and remains in excellent condition, Peoples says. Potential buyers are very leery of “buying used,” he explains, so they need to visit U.S. dealerships and examine the machines themselves. Also, the preference for top-quality used units means fewer are available for the foreign markets when American farming profits plunge, he says, and fewer are thus being traded in for new machinery.
     
    Don Aberle, Titan Machinery dealer in Moorhead, Minnesota, says his African sales are mostly used equipment, and “it has to be in good condition.” He says he has developed a clientele along with a list of more than 4,000 farm-related email addresses in southern Africa and has found some success in selling used tractors, combines, sprayers and other machines there in the past decade. Though he is making very few sales there this year, “when the dollar turns around, we’ll do fine,” he says.


    Meanwhile, Randy George, foreign sales manager for Nebraska-based T-L Irrigation Company, says USTDA has included his firm in its Sub-Saharan Africans tour in each of the past three years, “and, as far as I’m concerned, they could come every week.” The tours bring “the cream of the crop” of African ag operations, he says, and the August tour has generated some potential sales of irrigation systems in Botswana and Angola.
     
    Tom Hardy, USTDA spokesman, says the agency expects to continue the reverse trade missions for U.S. ag equipment sales to southern Africa. Also planned is a reverse trade mission to expand refrigerated shipping and storage of perishable U.S. farm products to that region, perhaps in 2016.
     
    USTDA is an independent government foreign assistance agency that is funded by Congress. It’s mission is to help create U.S. jobs through the export of U.S. goods and services for priority development projects in emerging economies.

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