BIRMINGHAM, Ala. (DTN) -- Those go-go days in the early months of the COVID-19 pandemic may be coming to an end for small tractor sales. But that's not to understate what has otherwise been remarkably high rates of sales for these tractors -- and, in recent months, large sales of combines.
The Association of Equipment Manufacturers on Monday released its monthly tractor and self-propelled combine sales report for September 2021. The good news from that report is combine sales.
For this past September, unit sales of combines are up 34.6% compared to combine sales a year ago. Manufacturers reported 848 units sold last month, compared to 630 units in September 2020. August was nearly as strong with combine sales up 19.8% compared to August 2020.
That combines are large investments by any farm, this level of buying could be taken to show confidence owners and managers have in the farm economy -- current and future. It is also an indicator that farmers are willing to make important investments in the technologies hung onto these machines -- with these buys, they anticipate a high return on their investment.
The story on tractor sales is far from dire. But it seems clear that since the beginning of summer, demand for tractors 100 horsepower and below has cooled. Where monthly tractor sales under 40 horsepower were posting double-digit gains through much of 2020 over 2019, sales have been showing some sluggishness in the second half of 2021 over a similar period in 2020.
For example, under-40-horsepower tractor sales were up only 0.4% in September 2021 compared to September 2020. Similarly, sales of tractors 40-100 horsepower were up 2.4% September 2021 over September 2020.
But this is hardly bad news -- for the year, sales have been strong. Year to date, under-40-horsepower tractor sales are up 10.5% over the first nine months of 2020. The same for 40- to 100-horsepower tractors in 2021 compared to 2020, January through September. Sales are up 12.9% in 2021 over 2020.
Interesting among more commercial-farm-sized tractors is the divide in September between two-wheel- and four-wheel-drive unit sales. Four-wheel-drive sales were down 1.3% last month, September 2021 compared to September 2020. But sales of two-wheel-drive units 100 horsepower and above rose sharply in September 2021, by 23% over September 2020.
The industry believes healthy grain markets have incentivized farmers to replace an aging inventory of tractors with better technologies. By that reckoning, it's hard to know this soon if there is a gap developing in sales between four-wheel-drive and larger, two-wheel commercial-sized units -- or if farmers are merely replacing their older No. 2 and No. 3 farm tractors.
Moreover, sales in 2021 would indicate a continuation of strong, larger tractor sales at least for some time. For the year, sales of 100-plus-horsepower two-wheel- and four-wheel-drive tractors have been nearly equal, and equally as strong, in terms of percentage. Sales of tractors 100-plus horsepower are up 26.2% year to date for 2021 compared to the same period in 2020. Four-wheel-drive tractor sales are up 30% in January through September 2021, compared to the same period in 2020.
AEM releases its next tractor and combine sales report on Nov. 10.
Dan Miller can be reached at email@example.com
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