North American farm machinery dealers continue to report listless but stable sales trends. Through the first quarter of 2017, dealers say equipment sales were still in negative territory year-over-year, but improved compared to the last quarter of 2016.
In the most recent Dealer Sentiments & Business Conditions Update survey, average dealer sales were reported down 5% year-over-year, which was in line with the previous 2 months.
A net 13% of dealers reported they are less optimistic, below the 1% reporting less optimism in March as optimism has improved from 2016 levels but has declined from January due to a wet start to planting season and low commodity prices weighing on optimism.
The 2017 sales growth forecast was reported at down 4%, largely in line with forecasts over the last 5 months. Commentary suggests weak farmer income and elevated inventories continue to weigh on optimism.
Selected dealer commentary on current conditions include:
- “We were slightly ahead of budget for the end of 1Q, but we are somewhat guarded going into 2Q as the market seems to have lost momentum. April sales came in below budget after a surprise fall off in our parts and service sales.”
- “We saw an uptick in large used ag equipment sales, while new small tractor sales continue to grow rapidly.”
- We were expecting a sales decline in the month based on weak large ag equipment sales, but we ended up flat due to better than expected small tractor, light industrial and turf equipment sales.”
- We are seeing aggressive programming from our manufacturer on large equipment running until October. The programs are less frequent than we have seen in prior years while the discounts are larger than we’ve seen in the past.”
- “There is strong demand for consumer products and small agriculture products. There are some units sold out and unavailable.”
- “We are starting to see some combine presale activity. March and April aren't traditional combine selling months and we were able to get two used units sold.”
- “The biggest surprise in April was the upswing in 40-100 HP tractor sales to smaller farmers.”