Lower commodity prices putting pressure on new machinery sales

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Sales of new tractors and combines have slowed down from a year ago, almost certainly due to lower commodity prices and higher interest rates.

Combine and four-wheel drive tractor sales ended 2023 up slightly while sales of small tractors were down — in both the U.S. and Canada

“As we look ahead to 2024, we’re seeing more of the same. There’s some softness — we started off a little bit softer in January, probably because of commodity prices, maybe because of interest rates, but overall, the fundamentals of agriculture continue to be strong,” says Curt Blades, senior vice-president of the Association of Equipment Manufacturers (AEM), speaking with RealAgriculture’s Bern Tobin at the 2024 Commodity Classic in Houston, Tx.

It’s just one month, but the number of new 2-wheel-drive tractor sales recorded by AEM in January was down 30.7 per cent in Canada and 21.6 per cent in the U.S. compared with the same period in 2023.

Sales have remained more resilient in the more expensive combine and high horsepower categories. Combine sales were down 9.5 per cent north of the border, and 4.9 per cent in the U.S. year-over-year in January. Sales of 4-wheel-drive machines were flat in Canada, and up 1.4 per cent in the U.S.

Deere, Case, and New Holland are among the manufacturers that have unveiled new combines over the past few months, from the New Holland CR11 at Agritechnica in Germany in November to Deere’s new S7 series at Commodity Classic this week.

“There are seven combines on the floor here at Commodity Classic — that’s the most I’ve ever seen here,” notes Blades. “Some of those are new, a couple of them are being seen in the public for the first time. That’s pretty exciting. That’s new technology, and obviously a farmer doesn’t buy a combine for next year’s harvest. They buy a combine for the next 5, 10 years of harvest. And when they’re doing that, they’re making that sizable investment because it makes good sense economically for their business.”

Check out the interview below for more with Curt Blades on machinery market trends, including whether supply chains have caught up after widespread challenges a few years ago, and the future of alternative energy sources in the field:

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