Subsidies for farmers and demand from emerging economies will aid growth
Los Angeles, CA (PRWEB) February 28, 2012
The Milking Machine Manufacturing industry has exhibited strong growth during the five years to 2012, as dairy farmers worldwide have sought to increase efficiencies through automation. According to IBISWorld industry analyst Josh McBee, “the increasing price of feed has raised farmers' operating costs and somewhat limited their ability to invest in these systems.” Nonetheless, government subsidies have helped mitigate any losses incurred due to low prices received for raw milk, thereby helping farmers invest in milking machines. At the same time, export sales have buoyed downstream demand. As a result of strong US and overseas demand, IBISWorld expects industry revenue to grow at an annualized rate of 10.3% during the five years to 2012.
With regard to trade, the relatively low value of the US dollar has made US goods more affordable to overseas buyers. Also, newly emerging economies, particularly in Asia and South America, have displayed unprecedented demand for milking machines. As industrialization picks up in these countries, the need to achieve greater productivity increases, raising demand for automated systems like milking machines. IBISWorld anticipates that exports will achieve double-digit growth during the latter half of the period, helping boost revenue by 5.7% in 2012 to $1.9 billion.
Much of the growth during the past five years stems from the industry's dominant companies. These firms are largely foreign, with a US manufacturing presence. According to McBee, “their ability to leverage global distribution systems helps them direct output to the areas of greatest demand." Despite recession-related declines in 2009, all of the top-three companies in the industry have posted positive growth numbers since 2007. Two of the industry's top companies Tetra Laval and GEA Group are foreign-owned companies; Tetra Laval is headquartered in Switzerland, while GEA Group is headquartered in Germany. Moreover, the industry's third-largest player, BouMatic has dealers throughout Europe, South America, North America and Asia. Furthermore, industry manufacturers are increasingly targeting new export markets to generate growth. Looking ahead, revenue growth is projected to continue, but it is set to level off as market saturation increases. Exports will likely continue making significant gains on the back of increasing demand from newly industrialized countries. High steel prices will also allow producers to keep their equipment prices high, as the lack of substitutions for milking machines allows higher production costs to be passed onto the consumer in the form of higher prices.
For more information visit IBISWorld’s Milking Machine Manufacturing in the US industry page
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This industry manufactures machines that milk livestock, mainly cows. Auxiliary machinery used for milking operations such as sprayers, dusters and blowers are also included in the industry.
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