Machinery Chatter

Tractor Sales Update

By Russ Quinn , DTN Staff Reporter

It is a good news/bad news situation for farm equipment manufacturers as 2015 comes to an end.

According to a press release from the Association of Equipment Manufacturers (AEM), U.S. retail sales of smaller farm tractors under 40 horsepower increased 1.7% in November of 2015 compared to the same period a year ago. However, year-over-year total retail sales for all two-wheel tractors, which include the under 40 horsepower tractors, were down 8.9%.

This drop is a reversal from last month's 5.8% growth. AEM said this is mostly due to a lower year-over-year growth in less than 40 horsepower and a reversal in growth for the 40- to 100-horsepower categories.

Four-wheel drive tractor sales decreased by 43.9% -- following a 29.5% decrease in October. These growth numbers are now back in line with the trends seen earlier in the year, AEM reported.

Year-to-date sale of less-than-40-horsepower tractors increased 7.7% compared to 2014, while sales of 40- to 100-horsepower tractors turned negative again. According to Charlie O'Brien, AEM senior vice president, retail sales for agricultural tractors and combines are reporting slightly below the five-year average.

"Sales of large production tractors and combines have been impacted this year by some significant trends that we have been seeing all year," O'Brien said. "In many cases, the farmer's profits have evaporated due to low corn and soybean prices, resulting in net farm income for the year to be $55.9 billion, which is 38% down from last year."

O'Brien also said the high level of equipment sales during 2012 and 2013 has created a glut of used equipment on dealer lots. This has an effect on the sales of new equipment.

In addition, the ongoing uncertainty about the effect of the Renewable Fuels Standard and Section 179 of the tax code continue to negatively influence farmers' buying decisions, he said.

The entire news release can be found at….



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