The limited cash available to farmers and ranchers in the U.S. will continue to put a dampener on the equipment markets in 2018 and 2019. The expanded depreciation programs that appeared in 2010 and reached its zenith in 2014 had the effect of pulling ahead purchases from future years. We are now enduring the results of that program.
Steel and aluminum prices will most certainly result in an increase in all farm equipment prices next year but our agricultural economy has been able to overcome those increases in the past and will most likely do so in the future.
The uncertainty that accompanied the current tariff disputes has produced a black cloud over future tractor and equipment sales. In spite of those concerns we continue to see some strength in the larger tractor categories and in combines this year.
The unknown resulting from the current trade negotiations have had a major impact on the positive feelings that existed just a few months ago. Farmers and ranchers are facing reduced incomes coupled with rising interest rates for their necessary operating capital and that does not produce a bright, cheery outlook.
Our industry is navigating some very choppy waters as international trade negotiations continue. Uncertainty has created caution in farmers’ spending recently and most likely will continue until there is some resolution to the trade talks now underway.
China’s need for agricultural imports remains significant since they are faced with providing food for nearly one-third of the world’s population. The past decade has produced a growing middle class in China that has demonstrated an increased demand for not only basic foods, but also for high quality products that are only available from other parts of the world.
The strength of the U.S. economy continues to provide support for the smaller tractor sales but the recent declines in the stock markets will have a sobering effect upon some future purchases.
In this episode of On the Record, brought to you by Associated Equipment Distributors, we take a look at how the flooding in Texas will impact the ag industry and check in with some dealers in the region.
Since 1980, A&I Products has become a leading manufacturer and wholesale distributor of aftermarket replacement parts for the agricultural, turf, and industrial equipment markets. A&I Products' experience and expertise has greatly contributed to the company's reputation as a top supplier of quality, reasonably priced parts. Founded with roots as a small machine shop and repair facility, the company made the transition by manufacturing new parts to replace those that were identified as commonly needing repair. Throughout the 1980s, the company quickly garnered a reputation for offering quality parts at a reasonable price.
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