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Farm income will rebound and so will ag equipment sales

The decline in net farm income is being seen in the sales of farm machinery.  The Association of Equipment Manufacturers monthly reports show total tractor sales in the United States through March are 4.8 percent behind a year-ago.  Four-wheel-drive sales are off 44.5 percent and self-propelled combine sales are down 45.4 percent compared to the first three months of 2014.

Charlie O’Brien is Senior Vice President at AEM, he says while sales are currently in a slump, in the long-term “I’ll think we will see the continuation of a trend upward in the number of units sold.”

The strong commodity prices of the past few years spurred strong sales of new tractors and equipment and with that, the implementation of new technologies on those machines.  O’Brien says the new precision agriculture will result in efficiencies and ultimately cost savings for the producer.  Couple that with the opportunity to utilize that data to make really good decisions and he thinks we will see” the cycle of innovations become shorter and shorter.”

Globally, O’Brien sees an expansion of farm equipment manufacturing around the globe from both the large and the not-so-large manufacturers.  Consolidation within the industry will continue but strong dealer networks capable of delivering a broad spectrum of services will be as important as ever.  Finding the tech-savvy people to work in the industry will continue to be a challenge as well.  “Hopefully over time more people will come to understand that this is a sophisticated industry and we’ll attract those people that we need.”

Listen to O’Brien’s comments here: