Figures released by the Assn. of Equipment Manufacturers on July 10 showed that, while large ag equipment sales declined again in June, inventory of these products on dealers’ lots continued to increase.
Ag Equipment Intelligence’s monthly survey of farm equipment dealers also showed a growing level of concern. Results of the survey were published in the “Dealers Sentiments & Business Conditions Update” report released on June 30. They showed that a net 26% of dealers categorized their new inventory as “too high” — 38% too high, 49% about right, 12% too low — which was up from the net 15% reported in the previous month.
In a July 10 note to investors, BB&T Capital Markets analyst C. Shon Williams said, “Demand for high horsepower professional tractors has yet to show any signs of improvement, as sales for both June and May fell 19.3% year-over-year, the worst decline in more than 3 years, and marks 5 consecutive months where sales have fallen on a year-over-year basis.
“Total tractor inventory levels now stand at 102,000 units, a 6.8% increase over June of last year. We envision additional pricing pressure in the future as dealers struggle to clear their lots of old inventory,” he said.