While dealers continue to report strong sales through the first four months of 2013, data is beginning to emerge that would seem to indicate that 2014 could be far more challenging for ag equipment sales.

The May 2013 Dealer Sentiments & Business Conditions Update report will be released to Ag Equipment Intelligence subscribers today. The survey, which represents the views of 152 dealers representing $6.3 billion in annual sales, indicates that farm machinery sales remained healthy through April and most dealers continue to hold an optimistic outlook for the remainder of 2013.

Curt Siegmeyer, analyst with Cleveland Research Co., which partners with Ag Equipment Intelligence on the monthly survey, notes in this months report, “The Initial USDA forecast calls for a 14% drop in cash receipts for 2013-14 based on our simplified cash receipts proxy. This compares to 6% growth for the 2012-13 crop year. If historical trends hold, this would imply that 2014 could be a challenging year for equipment demand vs. 2013, as the correlation between equipment sales and cash receipts has provided a good proxy for future equipment demand.”

For the present, dealers remain optimistic about prospects for the current year. Our Dealer Optimism Index, a measure of sentiment among dealers compared to the prior month, was higher in April, with 12% of dealers reporting they have a more optimistic outlook now vs. a net –5% less optimistic last month (27% are more optimistic; 58% same; 15% are less optimistic). The dealers also reported sales accelerated by an average of 7% year-over-year in April, up from 2% in March.