At the same time the Assn. of Equipment Manufacturers was reporting continuing strong retail sales of farm machinery in September, U.S. Census Bureau data showed year-over-year sales slipped for four months in a row through August.
According to a note from JP Morgan analyst, Ann Duignan, from the OEM perspective sales have been slipping
We believe some sales were pulled forward from the fourth quarter given an early harvest this year; corn harvest was 54% complete by October 1, which is 2.7x the five-year average. From an OEM shipments perspective, however, sales are down year-over-year for four consecutive months through August, the latest month available, with the declines accelerating each month, according to the U.S. Census Bureau, whose data includes exports.
In the Bureau's latest report, the value of farm equipment shipments in August vs. July declined by 13.2%; June vs. July was down by 5%; and May vs. June slipped by 6.6%. Year-to-date value of shipments so far in 2013 is down 8.5% compared with the same January-through-July period of 2011.
Duignan points out that monthly shipments had declined year-over-year only two times in the prior two years, and the August decline (-57% year-over-year) "was the largest in our database going back to 1996.
"Shipments of $1.5 billion were the lowest since November 2009. Part of the large August decline may be due to Deere's combine order cancellation program, which, while successful, significantly impacted shipments for the month. It is unclear if shipments will re-accelerate through the end of the calendar year," she said.