Equipment Sales Projections Remain Low Through 2010
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According to a recent survey released by the Association of Equipment Manufacturers, machinery makers can expect ongoing weakness in the U.S. and Canadian markets in 2010.
Sales of two-wheel tractors are projected to be below normal numbers, although declines should not be as pronounced as they were in 2009. Four-wheel drive tractors are expected to see decreases in the double-digits, however, following 2009’s fairly flat sales. Combines are also expected to decline by double-digits in 2010, after a growth year in 2009. Tractor and combine sales are expected to remain low throughout the year and then start rebounding in 2011.
As for other types of farm machinery, the outlook for 2010 looks promising after declines across the board in 2009. All categories of equipment should be selling well again in 2011 and 2012, say survey results.
“The recession reached the agricultural sector in 2009, and the drop in equipment sales in most categories is attributed to a combination of the fall in commodity prices, significant drops in net farm income, the tightening of credit throughout the ag equipment distribution channel, and the overall reduction in economic confidence,” says Charlie O’Brien, the Association of Equipment Manufacturers’ vice-president of agricultural services. “The recession is expected to continue to drive negative growth rates in many equipment categories in 2010. However, it is important to keep in mind that the larger equipment has been coming off of some very good production years, specifically the 100 HP tractors, which were at a 25-year-high watermark in 2008. Other influencing factors fueling market uncertainty include legislative issues such as cap and trade, the ongoing debate on increasing food production while reducing agriculture’s contribution of approximately 30 percent of the world’s greenhouse gases, Country Of Origin Labeling, and emission standards that will raise the cost of powered equipment.”
The Association of Equipment Manufacturers is an international trade group based in North America that represents the off-road equipment industry. Annually, the group polls their machinery manufacturers on their sales projections for farm equipment. The survey’s forecast is produced using the respondent’s averages for each product line. To see the full survey results, visit www.aem.org.
