As they look ahead toward the remainder of 2010, the major farm equipment makers aren’t finding themselves on the same page when it comes to sales of ag machinery. Here’s a rundown on how each sees things panning out for the rest of the year.
For the coming year, AGCO expects worldwide demand to be mixed in the first half of 2010. Stronger market conditions in Brazil should offset weaker conditions in North America and Europe. AGCO executives are predicting that demand in North America and Western Europe will stabilize during 2010, making comparisons to 2009 more favorable in the second half of the year.
Sales in North American were down 42% in the fourth quarter due to lower sales of utility and hay products tied to the dairy and cattle sectors as well as dealer inventory reductions.
Overall, the company anticipates that global farm machinery markets will decline 5-10% in 2010. CNH expects North American tractors to be down 5-10%, and combines to slip by 10-15%.
CNH management says that its order board for ag equipment worldwide is down 5% for tractors and down 14% for combines. However, North America and Latin America are up year-over-year. Pricing in ag equipment is expected to be up 3.5%. The company is using aggressive financing in certain categories to support a reduction in dealer inventories.
Deere & Co.
John Deere expects sales to grow 6-8% with $1.3 billion in profit in fiscal 2010. Farm machinery sales in the U.S. and Canada are forecast to be comparable to 2009. The company says that cash receipts and commodity prices have remained at healthy levels, which along with low interest rates are lending particular support to the sale of larger equipment.