During the Farm Equipment Manufacturer Association’s Fall Convention in Las Vegas, I had the chance to talk with Curt Blades, senior vice president of the Association of Equipment Manufacturers, who was on hand to help FEMA celebrate its 75th Anniversary.

Blades offered some perspective on what AEM’s reports are showing for the overall ag equipment market, as well as some issues that are impacting manufacturer sentiment. 

“Well, the ag economy in general is really facing some storm clouds, and that's reflected in the numbers that AEM puts out every month, the tractor and combine sales. For the last 18 months or so, we've kind of began to see some softness in the overall tractor market. And really, that started to accelerate in the last, say, 12 months for larger horsepower tractors, those that are representing those true farm tractors.”

“We did see a little bit of a turnaround in September with a slight uptick in sales, but I think we're still at this overall... The market's down about 20%, and it has been. If you talk to all of the manufacturers, they're all reporting that same story, that the equipment sales are soft right now, absolutely as a result of the ag economy being soft right now.”

When discussing the impact of tariffs, Blades pointed out that to manufacture equipment 3 things are needed — transportation, labor and steel. 

“And we all know where the labor market has been tight for some time, coming before the pandemic, but then, as a result of the pandemic, we're still dealing with some of those labor challenges. Transportation, we know what the transportation situation looks like both domestically as well as around the world. And then steel, I mean, as much as we would love nothing more than to buy all of our steel from our neighbors and right here in the United States or in North America, the reality is that it's a global market and you source certain quality, certain specs from around the world, and those tariff prices impact the global market, whether it is sourced domestically or sourced internationally. So, steel tariffs are certainly part of it.”

“And then tariffs in general, knowing that machines oftentimes cross the border multiple times to become a complete machine, whether that's between US, Mexico, and Canada, or it's machines coming where parts are coming from Europe, a very strong ag production market and coming to the United States, that's absolutely affecting the market, and it's affecting the price of machines. Our manufacturers are paying very close attention to this and making sure that everything that we can possibly do to control those costs, so that the farmers are also recognizing that their margins are a little bit squeezed. We don't want to have to raise the prices if we don't have to, but we recognize that our costs have gone up somewhat sharply.”

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