Apr 22, 2019 by Scott Garvey

Are you in a buying mood?

As farmers make the rounds to equipment shows this year, will they be in a buying mood?

There’s no doubt the commodity market news as of late has been a little gloomy. Much of the unease has come from the actions of the Chinese, who seem determined to punish Canada for locking one of their white-collar crooks. Among other things they’ve decided to take a swipe at Canadian farmers. They randomly locked up a couple of Canadian citizens that had the bad luck of being in that country, then they stopped buying our canola. And only the incurably optimistic among us will believe the Chinese won’t continue to be hard to get along with in the near term.

It’s more than a little irritating seeing all those Huawei commercials dominate the airwaves during the NHL playoffs. It’s the head of that company, which U.S. intelligence says is an arm of the Communist government intent on spying wherever it can, that we had in the pokey. Of course she’s now out on bail, lounging in her multi-million dollar Vancouver mansion. Anyone who’s lived in that city knows enduring those dreary, rainy Vancouver winter days can be hard on a person, but those two unlucky Canadians are reportedly living in some significantly more brutal conditions in prison over there.

The Communist leaders are also trying to put pressure on the U.S. by making life hard on our farming cousins south of the border. They’ve cut back purchases of U.S. soybeans. Farmers there are caught in the crossfire just like we are, as their own administration plays hardball on trade matters with China.

The latest news is the American government intends to play a similar trade game with the European Union, and it’s threatening to start yet another tariff war with them. We’ve already had our turn under fire. It seems the U.S. president has declared—or threatened to declare—economic warfare on much of the world.

But the Chinese reluctance to buy oilseeds is also fuelled by a reduced need for it, as that nation’s swineherd numbers fall significantly due to the Asian Swine Flu epidemic. So that will put pressure on exports as well.

Meanwhile, all of this combined with the existing U.S. steel and aluminum tariffs have raised costs for equipment manufacturers that will no doubt lead to higher sticker prices for buyers everywhere. And sales have slowed significantly. The latest tractor and combine sales reports aren’t exactly rosy.

In a statement, AEM senior vice president of ag services, Curt Blades, had this to say, “We saw positive and negatives to March’s sales numbers of Ag tractors and combines. While U.S. total tractor sales were down 0.2 percent, trade uncertainties and implementation of the farm bill continue to weigh heavy on the minds of our members and their customers. We also remain concerned about Canada’s continued problematic sales numbers.”

On a year-to-date basis, sales of four-wheel drive tractors in Canada are down 34.6 per cent. Rigid-frame tractors above 100 horsepower are down just over 30 percent.

Will those numbers improve anytime soon? Well, here’s the state of global affairs at the moment. The Russians are apparently ramping up their troll farms to interfere in this year’s federal election we’re told. The Chinese are willing to take hostages unless we kowtow to their will. And the American president is willing to disrupt global trade on a whim.

So, when we’ll once again see the kind of reasonably stable environment that allows global trade to flourish and farmers to buy new machines is anyone’s guess.

 

Scott

Scott Garvey

Scott Garvey


Grainews' machinery editor Scott Garvey follows trends and innovation in equipment technology, takes a look at new farm machinery offerings, tracks their performance and goes into the workshop to find better ways to keep them up and running.


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