Overall sales of farm tractors and combines slowed somewhat in May compared to prior months. But the most significant shift in the ag equipment market showed up in the declining inventories of large tractors and combines, according to the most recent figures released by AEM.

“Row-crop tractor, 4WD tractor and combine inventories all were down plus 20% year-over-year in April, as U.S. dealers continued to liquidate inventory to satisfy incremental demand in front of the year- end change in diesel engine emission standards,” says Robert McCarthy, analyst for RW Baird.

He notes that large tractor sales declined 2% year-over-year in May, a noticeable deceleration from comps in the critical April/May selling season. “Although less important than March and April (~25% of annual large tractor sales), May is still a seasonally above-average month, typically accounting for about 9% of sales,” McCarthy says.

• 4WD tractor sales fell 10% year- over-year, down sharply from 40% positive comparisons in both March and April. U.S. sales declined 13%.

• Row-crop sales declined 1%, following 5-6% increases in March and April. U.S. sales were off 3%.

• All large tractors will be directly affected by the year-end change in diesel engine emission standards, as they exceed the 75-hp threshold. Large tractors include all 2WD tractors with engines rated >100 hp (aka row-crop tractors) and 4WD tractors.

• Combine retail sales were up 1% year--over-year in May, weaker than the 21% April increase and continuing the high monthly volatility seen since entering the slack period of the year for combine deliveries in January. June is the first seasonally significant month for combine sales, beginning a 5-month streak that typically accounts for more than 10% of annual combine sales.

• Mid-range tractor sales increased year-over-year by 5.7% for first time since September 2008.