Market Trends of Germany Haying & Forage Machinery Industry
Labor Shortages Drive Adoption of Haying and Forage Machinery
Germany faces a significant agricultural labor shortage due to an aging workforce and declining interest from younger generations in farming careers. Young individuals avoid agricultural work, citing concerns about wages, working hours, and work-life balance. The rural-to-urban migration trend compounds this problem, as youth move to cities for employment opportunities, leaving rural areas with an aging population and diminished workforce. According to the World Bank, agricultural employment in Germany accounted for 1.24% of total employment in 2022 as compared to 1.25% in 2021.
The forage and livestock sectors necessitate substantial manual labor for operations including tending, harvesting, and packaging activities during specific periods. While farmers historically performed these tasks independently, agricultural consolidation has resulted in fewer but larger farms that increasingly depend on hired workers. Germany employs numerous foreign seasonal workers for its forage farming and livestock operations. The Federal Statistical Office projects a workforce shortage of 7 million workers by 2035, with 1 million Ukrainian workers affected by the energy crisis stemming from Russia's invasion of Ukraine.
The agricultural sector heavily relies on seasonal workers with short-term contracts, who often lack job security and social security benefits in their country of employment. The ongoing urbanization trend and improved living standards have created diverse employment opportunities in cities, drawing rural populations away from farming communities. The physically demanding nature of farming work has reduced interest in agricultural careers. Additionally, inadequate rural reforms have contributed to declining rural labor availability, compelling farmers to increase the mechanization of their operations. This labor shortage is anticipated to drive growth in the haying and forage machinery market over the forecast period.
Growing Animal Production Sector Increases Demand for Hay and Forage Machinery
The growing demand for forage feed from animal production industries is driving the increased cultivation of fodder crops like corn silage and fodder beet, which supports market growth. Germany's animal production industry generated revenue of USD 11.19 billion in 2022, showing growth from the previous year due to increased consumption of animal meat and related products. Fodder feed is primarily used in the country's dairy cattle, beef cattle, and swine industries. The expansion of livestock production, driven by rising demand for animal meat and dairy products, has increased mower usage in Germany. This has led to higher feed consumption, necessitating increased forage crop production. According to the Food and Agriculture Organization, the wheat harvested area in Germany expanded from 2.93 million hectares in 2020 to 2.98 million hectares in 2022.
The expanding area under forage crop cultivation drives the demand for harvesting machinery like mowers and balers, contributing to market growth. Companies are investing in agricultural equipment production to serve the livestock industry's forage requirements. In 2022, CLAAS Group invested EUR 40 million (USD 42.4 million) to rebuild its Bad Saulgau facility in Germany, a manufacturing center for forage harvesting machinery. This expansion focuses on developing advanced production capabilities to address Germany's growing demand for fodder harvesting equipment.
