Theres no question the agricultural equipment market has seen some unprecedented demand. According to the Association of Equipment Manufacturers (AEM), the first quarter of 2021 has seen total farm unit tractor sales up more than 50 percent in the United States, and up nearly 60 percent in Canada.
In a recent post from the AEM, Curt Blades, senior vice president of ag services, provides some reasons why the market is white hot. Were operating in a very interesting market right now, he says.
For the last twelve months weve seen a dramatic rise in under-40-horsepower, or small tractor sales in North America, both U.S. and Canada, Blades says. This is due largely to a lot of the industries that have done very well during the pandemic, like luxury items or things that have to do with the home.
Small tractors fall into that category as well.
Blades says the small tractors that have been spiking are largely going to the suburbs with larger lots to help homeowners haul rocks and dirt, work around trees and overall improve properties. However, starting later in 2020, larger row-crop and articulated 4WD tractors have also enjoyed increasing sales success.
One reason has been the gradual increase, over the past five years, of the average age of the ag fleet in both the U.S. and Canada. However, with commodity prices increasing, and trade difficulties starting to ease, AEM says not only is the replacement market doing well, but farmers are upgrading their operations with newer technology.
Blades does advise equipment inventories having been reduced significantly through these sales trends. However, he says dealers are being proactive, especially when it comes to keeping parts for their service centers in stock, but farmers looking to buy new machines may have to order several months ahead of expected delivery.
I think youre seeing a lot of optimism out there. And that optimism is leading to a lot of new equipment purchases, but also farmers thinking about what their businesses are going to look like into the future, he says. It is an interesting time that were operating in. Tractor sales are strong, commodity sales are particularly good, and optimism is at an all-time high in the farming community.