Farm Equipment
From the Desk of Dave Kanicki
www.farm-equipment.com/blogs/6-opinions-columns/post/7174-optimism-on-the-rise

Optimism on the Rise

March 20, 2012

It seems many North American farm equipment dealers are surprising even themselves when it comes to how sales are holding up through the first part of 2012.

As strong as ag machinery sales were throughout 2011, and despite the surge of sales dealers saw at the end of the year due to the bonus depreciation that had many expecting a falloff in early 2012, dealers continue seeing solid sales going into the planting season.

As reported in the February 2012 Dealer Trends & Business Outlook report, our "Dealer Optimism Index" rose to 28%, reaching its highest level since we began doing our monthly dealer survey in April 2011. This index measures sentiment among dealers compared to the previous month. More specifically, 38% of the 249 dealers responding said they were "more optimistic" than they were the month before. Only 10% said they were "less optimistic." The remaining 52% said they felt the "same" about their business prospects as they did a month earlier.

The highest Dealer Optimism Index in the past year, a net 26%, came in October 2011.

Overall, dealers have raised their forecast for the year ahead and now expect 5% sales growth for the full year. This is up from 3% in December. John Deere dealers revised their outlook the most, projecting full-year growth to be 6% vs. 2% from the month earlier.

In the short term, it's difficult to find any bad news. But over the long run, some industry observers see slower growth for ag machinery. (See Morningstar's Adam Fleck's article in this issue of E-Watch, "Analyst Sees Slower Growing for Farm Equipment.")

Anyone who's worked in and around farming for any length of time knows it's always been and will continue to be a cyclical business. This is especially true when comparing one year to the next.

Nonetheless, like the unbelievably beautiful end of winter we've seen through much of the country, we'll take it and enjoy it while it lasts. Of course, we're also planning for the inevitable downturn, aren't we?

Kanicki dave

Dave Kanicki

Dave Kanicki is the former Editor/Publisher (retired in 2020) Editor & Publisher of Ag Equipment Intelligence (AEI) and its related research, reports and broadcast channels. He joined Lessiter Publications in 2005 after decades of experience as an Editor & Publisher of metals manufacturing titles. His Farm Equipment and AEI work has been nationally recognized by both trade business and business press associations. He is a graduate of Central Michigan University.