Monitoring equipment sales and inventory levels can help you determine the value of equipment you own and the machines you want to trade in. As the fortunes of the industry rise and fall, it can impact both new and used equipment prices.
The December U.S. Ag Flash Report from the Association of Equipment Manufacturers shows that in year-over-year numbers all two-wheel drive tractors sales declined. The bright spots included four-wheel drive tractors and combines.
First, the smaller machines. Under-40 horsepower tractors, which have seen sales decline plenty in the last couple of years, ended 2009 with sales off nearly 20%. Utility tractors - in the 40 to 100 hp range, saw a drop of nearly 30% in the same time period. Meanwhile over-100 hp tractors slid about 13% in 2009.
For the larger - over-100 hp - tractors the 2009 decline comes after two years of pretty strong sales. However, a decline is a decline and all the major tractor makers are tightening their belts. Some, like Agco, are retooling their lines. For Case IH, Deere and New Holland, the companies are managing manufacturing schedules to trim supplies.
Manufacturers are doing their best to trim supplies, but inventories of row crop and four-wheel drive tractors crept up above year-ago levels. On the smaller end, under-40 hp and 40-to-100-hp tractor inventors are tighter.
The bright spots in sales for 2009, and I'll leave it to you to interpret what may be going on here, included four-wheel drive tractors and combines. The four-wheel drive (usually associated with the articulated machines) market has been a solid performer the past few years, and for 2009 year-over-year sales rose another 2%. For December, sales jumped nearly 17%, perhaps as farmers made some last-minute tax purchases.
Combine sales remain pretty strong. December year-over-year sales are up more than 3% and comparing 2009 to 2008, sales are up nearly 15%. Farmers are apparently continuing to look at ways to boost harvest efficiency, and as Nature has shown for two years - having good harvesting capacity on hand can be a benefit.
I got a sense from the recent Farm Futures Management Summit that a lot of our readers are taking a wait-and-see attitude toward buying equipment for 2010. However, as you look at ways to improve productivity, look at horsepower deployment in your operation. Many of you apparently are - with those four-wheel drive purchases. It's time well spent going into a new crop year.
You can check out the AEM report HERE.