What the latest equipment sale numbers tell us

Courtesy John Deere, 2020

The Association of Equipment Manufacturers’ (AEM) flash reports that come out every month are a handy way to see how equipment sales are trending in Canada and the U.S.

“Equipment sales numbers are a pretty good indication, or tells a lot of things about the economy,” says Curt Blades, senior vice president, agricultural services with AEM. More specifically, these numbers tell us a lot of things about the agriculture economy.

Looking at the December numbers, there was a lot of spring in all categories. Tractors did all right in Canada, and in the under 40 hp category, sales were stronger in 2020 than they were in 2019.

Combines were down 13.9 per cent year to date and 4WD tractors were down 5.6 per cent — smaller horsepower tractors seem to be floating the market.

“The lower horsepower tractors have been driving the market, and I think behind the story on that one is a whole lot of folks that are probably not using their tractor to farm with,” says Blades. Looking at the overall economy, certain segments have done well during this pandemic, like luxuries and home improvements. Perhaps acreage owners, who aren’t doing any travelling, have decided to invest that money into a tractor instead.

Listen in for the full conversation between Blades and RealAg Radio host Shaun Haney below, story continues after player: 

Blades says that it took until about mid-year in 2020 to see sales numbers on par with the five-year averages. As the tides started to turn after mid-year, sales of self-propelled combines or an uptick in overall sales may be an indication of farmers’ overall faith in commodity markets. Farmers feel comfortable making those large purchases, adds Blades.

Compared to the U.S. numbers, equipment sales down south reflect a healthier new machinery market. Blades says this is because of two things: the overall size of the U.S. market versus the Canadian market, and the small horsepower market saw more sales in the U.S., maybe from government subsidies or that re-investment into property.

The Canadian dollar and its hurting the used equipment market, about a year ago, certainly has also impacted the new market, adds Blades.

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