New equipment sales decline year-over-year, as used market holds steady

Ag machinery sales are showing a decline compared to last year, looking at the first seven months of 2022, however, this isn’t necessarily indicative of a bad year, says┬áthe Association of Equipment Manufacturers (AEM).

The AEM flash report for the month of July shows a decrease of 7 per cent for tractor sales in Canada and 14 per cent in the U.S., however, this is in comparison to last year which had very strong numbers in the way of equipment sales.

Curt Blades, senior vice president at AEM, says the decline in sales doesn’t mean that the demand isn’t there.

“I think we all know the supply chain challenges that are real. Folks who want to buy new machines, but they just simply can’t get them. Dealers want to supply them and they just simply don’t have them on the inventory bank. So I think those are those are very real things that are figuring this,” says Blades.

He says the supply chain challenges are especially prevalent when it comes to tractors with under 40 horsepower, yet the numbers are trending upwards for sales for 100 plus horsepower tractors. Those sales have seen a 21 per cent increase when comparing July 2022 to July 2021 and a 12 per cent increase year over year.

Consumers, retailers and manufacturers are all likely tired of hearing, and using, the excuse of supply chain challenges, however, it continues to be an issue for many, yet Blades says we may be start to see the light at the end of the tunnel.

“What I am hearing from our members that are on the supply chain themselves, the component manufacturers, and those folks that are supplying to the tier one, and tier one suppliers to the OEMs, they are saying that they’re seeing some clear light at the end of the tunnel, we’ve got the survey results to point to that. So it kind of leads me to believe that we’re approaching the tail end of this as an excuse for for some of the delays. But I also think that it is very real. And some of these challenges are going to linger with us for a number of a number of months and weeks,” says Blades.

Despite new equipment sales being down overall, used equipment sales continues to hold strong south of the border. Blades says although this is a pleasant surprise, it’s not a shock to the system to see those numbers hold steady. He attribute this to the sustained demand coupled with the aforementioned supply chain issues within the new equipment industry, which if new equipment isn’t available, consumers will find a product they need and that can come from the used market.

The next flash report from AEM is set to come out in September and will reflect August’s numbers for the U.S., Canada and Russia.