Farmer Iron

Bumpy Ride Ahead?

Bad news seems to be every where, but analysts see solid demand for farm equipment.

A guy can't turn on the TV lately without loads of "stuff" flowing into the living room. News of layoffs, closings, poor sales abound. So when a little good news floats into the in-box...well, it's nice to see too.

 

The latest industry figures - as tracked by the Association of Equipment Manufacturers - shows that big equipment sales rose in the last month of the year with four-wheel drive tractors and combines seeing gains. Trouble is, row crop tractors and smaller tractor sales slide.

 

The row crop tractor number - for machines above 100 horsepower - slipped about a half-percent in December. That's the first year-over-year decline for this segment since January 2007.

 

What does it mean? I'm hearing talk of some canceled orders. I know that a poll on the Farm Futures Web site showed that about 21% of respondents were delaying equipment orders. And inventories are on the rise at dealerships.

 

We're all trying to get a handle on this macro (world) and micro (agriculture) markets and how the two interrelate. We haven't seen a quarterly slump in market activity as bad as the 4th quarter of 2008 - ever. There's money still out there to get operating cash, and banks are under pressure to start loaning again (pressure I think will rise after January 20), so the credit crunch could be easing.

 

Farmers are smart. They're flexible (you've had to be to survive). And frankly you're ahead of the curve in personal and business financial management than the average bank customer.

 

Soft equipment sales just mean your local dealer may be willing to deal on some models. You'll see advantaged financing programs (from interest waivers to low-interest money). And, OK, I have to say it - a return to a tighter market. But we've all been through that before. We know how to do this.

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