After the first two months of 2015, the Association of Equipment Manufacturers’ monthly reports showed sales of ag equipment in Canada had fallen off dramatically from 2014 levels. Four-wheel drive tractor sales were down an astonishing 55 per cent. And new combine sales slipped 60.6 per cent. However, by the end of April the numbers had shown some healthy improvement, although they remain well below last year’s levels. But the severe drop in sales reported early on this year may not have really painted a true picture, according to Jim Wood, vice president, agriculture, at Rocky Mountain Equipment.
“Last January, February was a blip,” he says. “It was an anomaly. All of a sudden people look at the industry and go holy smokes it’s down so much over last year. Well that’s because last year was too high compared to the year before.”
The reason the numbers may have been skewed was due to some changes in delivery schedules of new equipment based on customer orders, primarily from one major manufacturer.
“I think the big thing was last year (sales numbers) gave such a false sense of what was going on,” Wood continues. “In December of 2013 and January, February of 2014, that’s when Deere delivered a lot of product, which they traditionally don’t do. For some reason last year they delivered a lot of product in December and January. And that really spiked the industry (numbers).”
While some categories of equipment are still showing much lower sales volumes, others are faring better. Among those bucking the trend of lower sales this year are loader tractors and livestock equipment, so dealers serving primarily livestock customers will be happy. But the cash values of these smaller tractors are much lower than the bigger equipment, such as four-wheel drive tractors and combines, which doesn’t boost the overall dollar value of new machines sold out of dealerships that focus on cash crop customers quite as much. That means across the west, some dealers are seeing larger reductions in cash flow from new equipment sales than others.
“I think you’ll find different views (on the machinery market),” explains Wood. “In our first quarter this year, we’re really, really, happy. Our used (sales) are way up, our new was consistent and our inventories are coming down.”