There must be a lot of optimism among executives in machinery company head offices these days. And the AEM (Association of Equipment Manufacturers) sales report for the month of March reflects the reason for it.
Finally, following years of month-after-month sales declines in ag tractors and combines in North America, the trend line may be reversing. Farmers took home significantly more new machines last month than they did in March 2016.
Here’s how it all breaks down. In Canada, March sales of farm tractors exploded, showing a huge 56 percent jump overall. Breaking down those sales numbers by horsepower class, rigid-frame tractors above 100 horses saw the biggest gain at 69.8 percent. Four-wheel drives followed close on their heels at 60.3 percent.
On a year-to-date basis, the data shows gains there too compared to last year. Four-wheel drive sales are up over 14 percent, and high-horsepower, rigid-frame models are up over 5 percent since the start of 2017.
But the largest growth has been with combines. Sales of them more than doubled last month compared to March 2016. And on that year-to-date basis, the jump is holding above 60 percent.
Down south, the news is good there too, but not as rosy as here in Canada. Overall tractor sales in the U.S. were up 5.4 percent in March, with four-wheel drives posting the biggest gain at just over 20 percent. And combine sales jumped 11 percent. But their year-to-date sales numbers show declines in several categories, so there is hope that these March numbers reflect an overall turnaround in sales trends within the U.S.
It’s hard to say if these numbers are really the start of growth in the sector, but senior executives I’ve spoken to at many brands, both in North America and Europe, have predicted sales would turn around sometime in 2017. Of course, there are a lot of factors at play when it comes to influencing farm equipment sales: farm commodity prices, dollar exchange rates and optimism—or the lack of it—among farmers.
Having said all that, this is the most optimistic news the industry has seen in a couple of years. And while it will certainly be creating smiles in brand boardrooms, they will be a little tentative. Sales reports published over the next few months will really tell whether this was a blip in the market or the end of the long decline in new equipment sales volumes.