Apr 16, 2015 by Scott Garvey

The market looks strong

Participation at farm sales so far this year has been very good. Photo: courtesy Ritchie Bros.

Participation at farm sales so far this year has been very good. Photo: courtesy Ritchie Bros.

It’s hard to know what to make of the ag machinery market so far this year.

2015 started off pretty shaky. By the end of February AEM (the Agricultural Equipment Manufacturers Association) reported that farmers were clearly keeping their chequebooks in their pockets. Monthly sales reports showed Canadian farmers bought over 60 percent fewer combines compared to the same two months last year. Four-wheel drive tractor sales were off 55 percent and rigid-frame tractors above 100 horsepower were 12.6 percent lower.

Then the March report came out, as apparently did farmers’ chequebooks. A kind of spring fever seems to have taken hold.

March sales of new combines lurched ahead of those in the same month last year by 5 percent, four-wheel drive tractors 4 percent, and rigid-frame tractors above 100 horsepower almost 10 percent. The total year-to-date sales for 2015 are still down significantly compared to 2014. But if this sudden surge becomes a trend, they’ll soon catch up.

Now that it’s April and the farm auction sale season has kicked off, I spoke to Kim Kramer of Kramer Auctions Ltd., and Simon Wallan from Ritchie Bros. It was pretty clear they are both reasonably happy with the demand and selling prices they’re seeing for equipment going under the hammer so far this year.

Both agree that in general auction prices for ag equipment have remained relatively steady compared to last year. However, there have been some adjustments in demand, as there usually are on a year-to-year basis.

Wallan says swathers are suffering from lower demand this year and are far from a hot item. Both Wallan and Kramer say that used seeding equipment selling prices have become a bit unpredictable. “Erratic” is the word Wallan used to describe the market for drills.

But, in general, most categories of machines are holding their own and some are actually up, although Kramer says the high U.S. dollar exchange rate that has significantly pushed up new equipment prices doesn’t seem to have lifted the used stuff quite as much.

And it seems buyers like anything that keeps them from having to worry about engine emissions systems. Trucks and tractors with pre-emissions diesel engines are commanding a healthy premium. Wallan says it isn’t just farmers who are willing to pay extra for machines with those engines, buyers at the company’s industrial sales are showing the same preference.

And livestock equipment sales are strong so far this year as well. Demand for combines is holding steady.

Wallan says the slowing demand for new equipment last fall and the decline in farm commodity prices had him making conservative estimates for sales results this year. But now that the company is half way through its spring sale agenda, he is much more optimistic. If seeding and growing conditions turn out well, he expects the demand for used equipment will stay strong through the year.

If those new equipment sales numbers continue to trend upwards, dealers will be wearing bigger smiles too.

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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