The next 12 months might be a good time to dicker on that new farm tractor or combine.
Farm equipment sales are down just about across the board and the trend, especially for large units, is expected to continue into next year.
“New farm equipment sales provide a strong indicator of the health of agriculture,” says a Farm Credit Canada (FCC) report.
“Over the past few years, market uncertainty and revenue pressures have reduced profitability in the agriculture sector, resulting in lower agricultural equipment purchases. Future sales rest on the ability for the ag sector to rebound.”
Larger tractors lead the decline in sales while utility tractors, under 40 horsepower, continue to grow and will grow next year, according to the Association of Equipment Manufacturers.
Sales of under 40HP tractors are up 12.3 per cent to 9,934 units for the first six months of the year.
Projections show a five per cent increase for this class in 2021.
Sales of 40-100HP tractors of 2,616 units are flat with a three per cent increase estimated in 2021.
Larger tractors, 100HP and up, have seen a 21.1 per cent loss in sales this year with a 10 per cent reduction in 2021 predicted.
Self-propelled combine sales have fallen 16.8 per cent this year to 697 units. Sales are projected to decline about five per cent next year.
Smaller utility tractor sales, which make up 70 per cent of all tractor sales, will offset declines in other classes.
FCC predicts farmers will see a 3.4 per cent decline in farm cash receipts this year — the largest since 2003.That decline will fuel less interest in buying.
While grain and oilseed sales will increase from higher deliveries and record grain movement, livestock receipts, influenced by industry disruptions from COVID-19, will decline.
Low interest rates may persuade farmers to buy new machines.
The value of the Canadian dollar has an impact. A lower value increases prices as most equipment is imported from the United States.
Ron Walter can be reached at firstname.lastname@example.org