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Equipment sales: Only tractors under 40HP sell well

Staff writer ▼ | May 13, 2016
U.S retail sales of farm tractors under 40HP were up 7.8 percent in April 2016 compared to the same time period last year.
Industry   According to the Association of Equipment Manufacturers:
All other sizes of tractors as well as combines recording double-digit declines, according to the Association of Equipment Manufacturers (AEM), the leading trade organization for off-road equipment manufacturers and suppliers.

U.S. retail sales for 2WD tractors of 40-100HP decreased 15.3 percent in April compared to last year, and for 2WD tractors over 100HP dropped 16 percent. April 2016 sales of 4WD tractors dropped 10.4 percent, and combine sales declined 45.5 percent for April compared to the same time period last year.

“We certainly have seen some negative numbers and monthly fluctuations in some categories as markets remain uncertain,” said Charlie O’Brien, AEM senior vice president.

“However, today’s situation differs from earlier tight spots such as in the 1980s, when the capital structure of the ag market collapsed. Factors included a massive accumulation of farm debt in the 1970s, which coincided with an unfavorable economic climate and incredibly high interest rates, while at the same time, demand collapsed, bringing down prices,” O’Brien said.

“Today, the drop in commodity prices may in the long run be more of a market adjustment with production temporarily outrunning demand,” added O’Brien.