More Weakness Seen for Ag Machinery

Agricultural machinery manufacturers anticipate overall continued weakness in U.S. and Canadian tractor sales in 2010, according to the annual outlook survey of the Association of Equipment Manufacturers.

For all sizes of two-wheel-drive tractors, however, the declines are expected to be less steep than 2009 losses. Double-digit decreases are expected for four-wheel-drive tractors, following relatively flat business in 2009. Combine sales are predicted to drop in the double digits for 2010 after 2009 sales growth. Sales of tractors and combines are then predicted to start rebounding through 2011 and 2012.

For other types of farm-related equipment covered in the AEM survey, overall 2010 demand for most products in the U.S. and Canada is expected to improve after 2009 business declines. All categories are predicted to be in the plus column for 2011 and 2012.

“The recession reached the agricultural sector in 2009 and the drop in equipment sales in most categories is attributed to a combination of the fall in commodity prices, significant drops in net farm income, the tightening of credit throughout the ag equipment distribution channel and the overall reduction in economic confidence,” said Charlie O’Brien, AEM vice president of agricultural services. Survey results are available here.

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