WORLDWIDE sales of tractors and farm machinery are dropping according to the German Engineering Association, the VDMA, but are still significantly higher than the average over the past 10 years.

It says that production this year is expected to drop 10% to around £66bn (€90bn).

“Since the last recession in 2009, the industry has experienced a huge boom. This is now well and truly over,” said Dr Bernd Scherer, managing director of the VDMA.

“We are expecting the markets to consolidate from now on, especially those established markets in Europe and the US, although attractive opportunities for expansion continue to open up in several of the newly industrialised countries.”

The business climate for big agricultural machinery companies has cooled across the globe, he added, with one in two western European and North American managers currently rating their business outlook as “unsatisfactory”, according to a VDMA survey.

The EU and North America make up about 55% of the world market for agricultural machinery and set the tone for global trends.

Heavy investment in farm machinery over the past three years, plus lower crop prices, meant that in the first half of the year demand for new machinery dropped 20%.

It singled out markets in South America and Eastern Europe as being weak, and harvesting machinery sales in Russia difficult due to inflexible import restrictions. However, there has been growth this year in the Japanese, Chinese and Turkish markets.

The view of the German trade group come shortly after the AEA had reported a slump in tractor sales in the first half of 2015.