After what looked like some progress at the end of last year, dealers in the February Dealer Sentiments & Business Conditions Update survey reported that both new and used farm equipment inventories sitting on their lots remains “too high.”
Sales at grain handling and storage equipment manufacturer, Ag Growth International Inc. (AGI) increased in 2015 but only because of the acquisition last year of Winnipeg-based Westeel.
The Assn. of Equipment Manufacturers reports that while agricultural equipment exports continue to be down for the third year in a row, the decrease in 2015 was not as strong as the –29.2% in 2014.
What I’m hearing: Negative vibes from folks all over, batten down the hatches, don’t feel like buying. What I’m seeing: In January and February 2016 there were very strong auction sale prices on good condition used farm equipment all over and many dealers aggressively cranking down used inventory levels. Stuff is moving.
The Deere & Co. Board of Directors declared a regular quarterly dividend of $.60 per share on common stock, payable May 2, 2016, to stockholders of record on March 31, 2016.
When Deere & Co. announced its first-quarter 2016 earnings last Friday (Feb. 19), it reported that its worldwide equipment sales declined 15% compared to the same period of 2015. The company also said that it expects fiscal year 2016 sales to be down 10% year-over-year vs. down 7% in its previous forecast. For the U.S. and Canada, the company says it anticipates retail sales to be down 15-20%, with large ag retail sales down by as much as 25-30%.
J.B. Penn, the chief economist at Deere & Co., said Tuesday that while there is instability around the world, economic output is expected to rise, while the labor market and even wages are rebounding.
The on going economic weakness in this industrial sector has reduced the revenue of the manufacturers of agricultural machinery and tractors in 2015 by another 4%.
The Assn. of Equipment Manufacturers reported tractors under 40 HP experienced a significant increase in January shipments as compared to the January 2015 number, but retail sales dropped from 4,129 last January to 1,550 last month.
It should come as no surprise, but in its Feb. 9 Farm Sector Income & Finance report, USDA is again projecting that net farm income for U.S. farmers will decline for the third year in a row.
In this episode of On the Record, brought to you by Associated Equipment Distributors, we look at President Trump's tariff reduction on ag equipment, the latest dealer sales forecasts, and how high input costs are keeping farmer sentiment down.
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