SOUTH America is emerging as far more than just a serious competitor to Australia's farm exports overseas; it also sees Australia as a prime marketplace for its massive agricultural machinery output.
Argentina, in particular, is cranking up a deliberate strategy to break into new export markets like Australia - and our local machinery distributors like what they've discovered in the burgeoning Argentine machinery sector.
Already increasingly powerful players in world beef, grain, fruit, honey and wine markets, Argentina and neighbouring Brazil also have a wealth of large-scale farm machinery companies churning out everything from grain harvesters and handling equipment, to tillage and seeding gear, heavy transport rigs, feed mixers, sprayers and fertiliser spreaders.
Although barely a spec on Australia's farm machinery radar a decade ago, Argentina (population 42 million) boasts almost 600 agricultural equipment manufacturers, including more than 50 making disc ploughs and 26 building grain chaser bins.
In the past 12 months mainstream Australian farming equipment suppliers have signed import alliances with at least five Argentinean manufacturers, with many of their products attracting first time scrutiny from local farmers at the recent Commonwealth Bank AgQuip field days at Gunnedah, NSW.
"Being a typically ignorant Australian I had no idea what was available in Argentina until I visited their big Agro Show last October. I was blown away," said Davey AFM managing director, Malcolm Mackellar.
The Queensland-based firm, a long-established builder of scarifiers and cultivators and the Homan and Savannah range of rippers and dozer blades, has now seized the chance to expand into fertiliser spreaders and grain bins from Argentina.
"We saw the opportunity to broaden the product range available to our dealers and our customer base by importing the El Grillo and Syra gear," Mr Mackellar said.
"We've got other Argentinian stuff on the horizon, too."
AFM's new El Grillo chaser bin range includes a 32-tonne model, with 10t-a-minute outloading capacity, lights and electronic scales selling for about $95,000.
"There's nothing cheap about the way it's built - it's as good as anything made in Australia. But a unit that size, with all those inclusions, would probably normally sell for closer to $120,000 in Australia," Mr Mackellar said.
He said while South American labour costs were more competitive, Argentina was also strongly proactive about developing its rural industries and keeping its agriculture and agribusiness value at about 30 per cent of GDP as the economy expanded.
"They don't muck around. They've put a lot of resources into agricultural research and had a 60pc lift in farm productivity in the past decade," he said.
Thanks to generally good rainfall patterns across its agricultural regions Argentina grows almost 100 million tonnes of dryland oilseed and cereal crops annually and now exports about $US35 billion in farm commodities and machinery.
Argentinean Deputy Consul General in Australia, Pablo Hartstein, said the good overseas response to Agro Show last year helped lift farm equipment exports to now include 32 countries ranging from the US and Australia to Eastern Europe.
As part of Argentina's export drive a trade mission involving 22 manufacturer representatives visited AgQuip, then Melbourne and Ballarat in Victoria to seek out new distributors, before heading to New Zealand this week.
Mr Hartstein said while there was a language barrier and "mental distance" between Australia and Argentina - with both countries relatively unfamiliar about each other - the trade activity and optimism that followed recent tours to South American manufacturers had been "very satisfying".
Last week's return trade mission to Australia had also provided good exposure for both sides, even opening the gate to potential joint venture businesses and possibly giving Argentina a stepping stone into nearby Asian farm markets.
Broadacre manager with Howard Australia, Justin James, said his company initially went shopping in Argentina for chaser bins, but also returned with Fabimag disc drills to complement its Canadian-made Morris tillage gear range.
He said the world class manufacturing standard of many Argentinean products, the good quality steel and ISO accreditation meant the gear could easily compare with the best produced from the USA.
"We've done trials around Griffith and Albury in southern NSW and the responses have been good, even though customers are initially a little sceptical about product names they haven't seen before," Mr James said
"In reality we'll probably have to wait a couple of seasons to see what the final verdict is shaping up like."
Argentina at a glance
- Gross Domestic Product of $US257b a year
- Produces 44m tonnes of dryland cereals, 51mt of dryland oilseed crops, 65,000t of wool, 3.2mt of beef and 80,000t of honey annually
- World's leading exporter of flour, soybean and sunflower oil, honey, lemons and pears
- Has $US864m in annual farm machinery output and exports worth $US217
- Built the technology used to upgrade Australia's Lucas Heights nuclear reactor in Sydney
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