Farmer Iron

Farm Equipment Sales Slide

Farm machinery makers are seeing a slip in demand yet analysts see sales as flat.

The Association of Equipment Manufacturers releases monthly industry sale data and the April report shows that year-to-date farm equipment sales are off more than 20% when considering all classes of two-wheel drive tractors.

 

That doesn't mean you're going to find a log of bargains out there waiting for you to check them out. Instead, you may find the dealer lot a little emptier than before as the industry keeps working down the number of machines on hand. Unsold machines represent a big capital cost for the industry heavy demand in the past two years have helped work that oversupply out of the system.

 

Looking at the April 2009 numbers, compact tractors (those under 40 horsepower) continue sliding with a 25% drop in April. These handy compacts are popular with rural homeowners and the tightening economy has crimped sales here. Yet demand for slightly larger - the 40 to 100-hp utility tractors is even softer with a year-to-date drop of more than 25%.

 

There are some bright spots in the monthly report. First four-wheel drive tractor sales rose 29% in April; and they remain up 4.4% for the entire year. Larger operations are replacing aging iron.

 

Second bright spot is combine sales. Year-to-date results show combine sales up 4.4%. For April alone combine sales are up 29% - you're ramping up your harvest efficiency and competitors are giving you plenty to consider with more models and features than ever before.

 

The graph below shows trend information in a broad sense for total farm tractors and combines. You can see that 2009 is off to a soft start, and the rainy planting season for some parts of the Corn Belt may help solve the problem if a true weather market develops.

 

 

 

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