North American farm equipment dealers surveyed for Ag Equipment Intelligence's most recent Dealer Sentiments & Business Conditions Update reported that, on average, equipment sales were down about 16%, about the same as the previous month.
Dealer commentary focused on the most pressing issues currently confronting the industry. Here are what they had to say:
- Key indicators continue to be trending down. There is a lot of pessimism concerning cattle pricing, the oil & gas industry, and no Section 179 extension. All factors seem to indicate further pressure on sales.
- The competitive dealers in my area have had to lay off workers due to the continued low price of wheat.
- I think the used buyer is holding out until late December.
- Big ticket purchases didn’t occur this November at all.
- Low commodity prices and increased competition from Kubota are driving my forecast down in 2016. New orders are down from last year’s levels with customers in no mood to discuss equipment replacement. We are focused on warranty extensions, inspections and preparing equipment to last additional seasons.
- Cattle prices are 80 cents/pound less than last year. That is $600 less for a 750-pound steer. That sets the tone for 2016; our customer base will have less expendable income and be less inclined to purchase beyond necessity.
- Unless used late model inventory is sold off, we’re going to hold off on making new sales.
- Inventory is only high in used HHP tractors, all other segments are actually good. Used combine inventory has come down a lot through the year.
- Used equipment isn’t turning fast enough and has caused us to do net pricing adjustments for cash flow.
- We’re all in for a slow 2016, all markets will be slowed somewhat.
- Aftermarket sales activity was not as strong as anticipated. Many customers ended harvesting in October after a mild harvest, and have put off winter inspections.
- The ramifications of the Argentina presidential election plus the China factor are not conducive to farmers buying row crop equipment.
- Small cattle farmers are still profitable, but haven’t bought as much equipment as we had expected them to.
- Argentina effect on the corn market has not been fully priced into the market yet. Bonus depreciation does not look like it will be implemented for purchases this year and at this late juncture any effect it has would be minimal as we will be limited to what we have on lot.