It continues to be a remarkable year for the farm machinery industry. March roared in not like a lion, but with CIOVID-19. Still, where March looked bleak for machinery sales, October sales are much, much improved.
The Association of Equipment Manufacturers (AEM) reported that March 2020 farm tractor sales fell 15.6% compared to March 2019. Retail sales of self-propelled combines declined 11.9%. First quarter 2020 tractor sales, including all two-wheel and four-wheel drive tractors in all horsepower ranges dropped 7.6%. Self-propelled combine sales fell 18.1% in the first three months of 2020.
In its newest report for October released this week, AEM finds U.S. total farm tractor sales rose 18.1% in October compared to 2019. Self-propelled combine sales grew 14.8%.
U.S. four-wheel-drive tractor units sales grew for the third month in a row. October sales rose 22.8% to 635 units. These numbers, AEM reported, put year-to-date four-wheel-drive sales in the black for the first time this year. Total four-wheel sales are up 1%. Larger tractor sales, two-wheel drives above 100 hp, rose 9.7% in October. That number also puts sales of 100-plus hp units in the black for 2020 -- up 0.2%.
Total year-to-date farm tractors out the factory door are up 15.1% through October 2020. Combine sales are up 5.5%. New combine technologies are likely behind the steady sales performance of combines through most of 2020. John Deere, Fendt, New Holland, Case IH, and CLAAS have all put new combines onto the market in the past year, or so. They are being purchased by farmers who want to upgrade their harvesting efficiencies and technologies.
There appeared to be the attitude among buyers that "this too shall pass," said Curt Blades, AEM Senior VP of Ag Services. Farming and ranching rolled on -- even in the face of COVID-19 everyone has to eat.
It is sales of new 40 to 100 hp and sub-40 hp tractors that have been nothing short of phenomenal. Through October this year, the industry has sold nearly 172,000, below-40 hp tractors and 57,000, 40-100 hp units.
In much of the world, a 40 hp tractor is a pretty standard farm machine. Not in the U.S. It is a horsepower range generally not viewed as an agricultural tractor. But even small units generate important sales. "It's a volume that keeps the lights on," Blades explained.
Why the business? A reasonable guess is that white collar workers, with some acreage, COVID-bound at home are discovering all sorts of projects needing new horsepower. Landscapers, too, may be responding to increase demand for their services by home-bound homeowners. For the year, 40 hp-and-under tractor sales are up more than 18% compared to the same first 10 months of 2019.
Canada has been an important contributor to overall North American sales -- if not quite as strong as the U.S. October tractor sales saw major growth in the sub-40 hp range, as in the U.S. Those sales carried overall tractor sales in Canada to 12.8% growth for October and 9.6% year-over-year. Forty-100 hp and 100-plus hp units had small declines of 1% and 3.3%, respectively. Four-wheel-drive unit sales stayed flat for the month. Self-propelled combines grew 3.1% for the month in Canada, while year-to-date unit sales remain 7% behind their 2019 pace.
"We're glad to see aggregate North American tractor and combine sales stay above the five-year trend line," Blades said in the AEM release. "These latest numbers, combined with the recent bump in commodity prices, point to the potential for a strong finish to equipment sales for 2020."
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