Conditions continue to be challenging for large ag equipment sales, as highlighted by the latest sales report released by the Assn. of Equipment Manufacturers. Total tractor and combine sales for January were up 3.1% year-over-year vs. down 4.1% in December. C. Schon Williams, analyst with BB&T Capital Markets, says inventories have continued to build amid ongoing weakness in ag equipment demand. Williams maintains a negative outlook “as sales continue to disappoint and the latest WASDE report points to continued pressure on farm cash receipts in the near term.”
U.S. combine sales declined 47.1% year-over-year in January, which marks the fourth consecutive month with declines that exceeded 40%. Canadian combine sales fared even worse, with a 77.6% decrease year-over-year.
For high horsepower tractors, sales continued to drop while inventories continued to build. U.S. demand for row-crop tractors fell again in January, but did improve from December (-5.6% vs. -22.4% in December). Canadian sales had similar results with a 4% decrease. “High horsepower tractors have now posted 6 consecutive months of year-over-year declines, however we note that January’s sales drop was a noticeable improvement from 3 straight months of more than 20% decline,” Williams says.