Machinery sales for 2020 have started off on a much weaker tone than 2019, according to the Association of Equipment Manufacturers. The current agricultural profitability outlook is bleak due to market access concerns, a bearish tone to commodities in the face of trade disruption, and rising protectionism elsewhere in the world.
Without extra disposable income farmers have clearly pulled back on machinery purchases in January and again in February.
Not one category is in positive territory for year-to-date sales at the end of February 2020. For tractors, 2WDs are down 10.7%, 4WD tractors are down 52.2%, and combines are down 36% year-to-date compared to the same period in 2019.
The U.S. numbers look to be in better shape, comparatively speaking. “What we’re seeing in tractor and combine unit sales is in line with expectations,” says Curt Blades, senior vice president of Ag Services at the Association of Equipment Manufacturers. “A lot of uncertainty in overall global markets is being reflected in agricultural goods markets, and that ultimately gets reflected in the capital expenditure decisions, like major equipment purchases, that farmers make.”
In the U.S. 2WD tractors are down 1.4%, 4WD tractors are flat, and combines are down 22.6% year-to-date compared to the same period in 2019.