Implement sales recover after COVID slump

Canadian combine sales are down 16.8 percent from last year, but equipment dealers saw a 41 percent increase in July

Farm equipment sales tanked in North America when COVID-19 lockdown restrictions came into effect in March, and equipment manufacturers have been digging themselves out of this sales deficit ever since.

However, the sales report issued by the Association of Equipment Manufacturers (AEM) has shown strong sales this summer.

“In May, June and July it’s been pretty solid months for all equipment sales in the U.S.,” said Curt Blades, senior vice-President of AEM.

“In July we started to see some decent recovery in the 100 plus horsepower market as well as the combine market.”

Thirty-three percent more self-propelled combines sold in the United States in July 2020 compared to the same month in 2019, and there have been 4.1 percent more sales in this category so far this year compared to the same time last year.

In Canada, year-to-date sales to the end of July for self-propelled combines are still down 16.8 percent in 2020 compared to the same time last year, but there was a 41 percent increase in sales in July this year compared to last.

Blades said the sudden increase in sales north of the border likely has something to do with relatively good-looking crops in Canada and decent pricing opportunities in crops like canola.

Sales of four-wheel drive tractors are down year to date in both the U.S. and Canada, and the U.S. continues to trend lower this summer compared to last year, while Canadian sales in this category are up more than 80 percent over last year in both June and July.

Both countries have seen strong sales in the less than 40 horsepower category with year to date sales to the end of July up 17 percent in the U.S. and 12 percent in Canada.

“There is still that bright spot of the small horsepower tractor — the under 40 horsepower and the 40 to 100 horsepower have been nice,” Blades said.

“That has a lot to do with the people quarantined at home, working remotely buying tractors for their acreage.”

In Canada, the sales of tractors in the more than 100 horsepower remained flat this summer and are down more than 20 percent to the end of July compared to last year.

Blades said the trade dispute between the U.S. and Canada, including the 232 tariffs placed on Canadian steel and aluminum, caused issues with the used farm equipment market in Canada for the past few years.

“The equipment market has been pretty soft in Canada for some time,” Blades said.

“In the ag space, the used market has a pretty big impact on the sale of new equipment. The used equipment was not flowing the way it should have back and forth across the borders (because of trade disruptions).”

U.S. President Donald Trump’s administration re-imposed a 10 percent tariff on imports of certain aluminum products from Canada that took effect Aug. 16.

Overall, Blades said year-to-date sales still aren’t great in the agriculture equipment space, but sales have been encouraging this summer and could be much worse, given the state of the overall economy.

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