One of the more interesting comments I’ve read from an outsider looking into the current ag equipment environment came from an Aug. 17 report that quotes Karen Ubelhart, an analyst at Bloomberg Intelligence in New York. In assessing the current sales slump and the ongoing backlog of used farm machinery, Ubelhart said, “People are comfortable that it’s bad and that it will take a while. It’s not great, but they’re not bleeding. It’s just not getting better.” 

While I don’t know many farm equipment dealers or manufacturers who would admit to being “comfortable that it’s bad,” from where I sit, I think there’s some truth to Ubelhart’s commentary. It’s not because they don’t care. It’s because there’s nothing they can do about low commodity prices, which is the main culprit in the current ag machinery slump.

While we’re seeing a few signs that things are bottoming out, for the most part, the market for new and used equipment remains difficult. We’re now in the third year of the downturn in new equipment sales, so we’ll probably see some necessary replacement of equipment in the months ahead. Otherwise, there are few signs of a pick up.

As for used equipment backlogs and prices, they don’t appear to be getting any worse. The percentage of dealers reporting that their inventories are too high and prices too low has dropped somewhat in the past month or so. Still, about one-third of dealers in our latest Dealer Sentiments & Business Conditions Update survey say their inventories remain “too high.”

Despite the ongoing tough business climate, while visiting equipment manufacturers at the Farm Progress Show a few weeks back, no one seemed desperate or down. What I saw was probably more new stuff being rolled out at this show than I’ve seen for quite some time.

Aside from Case IH and New Holland’s rollout of their autonomous tractors, or the new Tribine harvester finally being market ready, it just seemed that more manufacturers than usual were introducing new product developments or upgrades to their equipment than has been the case for the past several years.  

Possibly, there’s been a lot of stuff in the development pipeline for a while and this year the timing was right to introduce it. It lent some needed energy at a time when it would be easy to sit back and wait till things turned around. You can see a lot of what we saw on our website. We’ll have even more in the October/November issue of Farm Equipment.

As for dealers’ view of the current sales situation, it remains mixed, with some saying things have gotten better, while others admit it remains a struggle. Here is some of the commentary from dealers responding to our last Dealer Sentiments & Business Conditions Update survey.

On his used inventory one dealer remarked, “We have cleared out our used combine inventory and are left with only one new combine.” At the same time, another expressed far more concern. “There still seems to be too much iron in the marketplace on the used side. Auction values haven't taken a foothold in most categories and until a balance is found, dealers will continue to be very conservative when taking trades. Customers seem to know this as well and many are looking to auctions for a deal.”

We’re seeing the same dichotomy when it comes dealers’ feelings about new equipment sales. One offered, “Several farmers mentioned that their bankers now have a policy prohibiting new purchases.” But the equipment makers continue to push, according to another. “Manufacturers are hungry to keep some sort of normalcy in production, therefore, they are coming to the table with better terms on wholegoods in an effort to entice dealers to order stock units.

Like I said, I don’t think anyone’s comfortable about the ongoing sales slump. On the other hand, industry veterans know that wringing their hands, complaining about things they can’t control or losing sleep isn’t going to change things either.