John Deere dealer Juarez Gavinho was kind enough to take me to lunch one stiltingly hot day last year, in the midst of the state of Mato Grosso's soybean harvest. While we ate, he talked about John Deere in Brazil, and its operating system with SLC, an old and respected Brazilian tractor manufacturer. Then his cell phone rang. He spoke for a moment, then hung up.
“Well,” he said, “it looks like we've sold four combines since we left for lunch.”
There's plenty of John Deere green to be seen in Brazilian fields, as well as New Hollands, Masseys, Cases and others. According to Anfavea, Brazil's National Automotive Vehicles Manufacturers Association, Case was the first U.S. tractor company to set up shop in Brazil, in 1919. John Deere got here in the 1940s. New Holland opened up Brazilian operations in 1960, and AGCO (Massey Ferguson and Deutz-Allis) is celebrating its 40th anniversary of operating in Brazil. Komatsu and Fiat-Allis started production here in the 1970s. Finland's Valtra, Yanmar, Agrale and other companies also manufacture farm vehicles here.
And sales are up. In fact, sales of Brazilian-manufactured wheeled tractors went up nearly 30% from 1999 to 2000. Sales of imported tractors over the same period went down about the same percentage. However, imports were low to start with. Part of the reason for the drop in imported tractor purchases may be Brazil's 40% currency devaluation in January of 1999, which made imported products that much more expensive. Besides, there are plenty of tractors and combines available here without importing. Brazil manufactured 27,525 wheeled tractors last year, along with 4,274 combines.
In fact, Brazil's devaluation may have contributed to increased exports from tractor manufacturing plants located in Brazil. Last year, for example, John Deere exported 286 tractors and 368 combines from Brazil to other countries. Case exported 66 tractors and New Holland sold 577 tractors and 103 combines abroad from its Brazilian production. Last year, AGCO sent 700 tractors from its Brazil plant to the U.S. This year, it's aiming for 3,400.
Meanwhile, about 300 wheeled tractors, nine tracked tractors and 150 combines were brought into Brazil from other countries in 2000. Case was Brazil's biggest importer, both of tractors (109) and combines (107.)
Ivan Carlos Mauro, who grows corn and soybeans in the Brazilian state of Minas Gerais, says he is a John Deere loyalist because the company's tractors have “met my needs better than the others.” High costs, he says, have been an impediment to renewing his fleet.
Meanwhile, Valtercídes de Rezende sells Valtra tractors in nearby Uberaba, Minas Gerais. He says his best sales are usually “shortly after harvest, when producers see how they did with their crops, in order to see what they are going to need” for the next season.
“Most of the demand,” he says, “is for heavier tractors, with more than 100 hp, to handle sugar cane, soybeans and no-till corn.”
Rezende adds that interest rates of 8.75% monthly are hurting tractor sales, and that factory financing is a must.