Equipment sales flat but likely to improve

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Published: June 2, 1994

SASKATOON — The Canadian Farm and Industrial Equipment Institute president is disappointed in April sales results.

Bert Hamre said April is traditionally a flat month for farm equipment sales, but this one was particularly dismal. Tractor sales for the month are down 20 percent from a year ago and combines are down 55 percent.

Despite a poor April, year-to-date totals for big ticket items like combines and tractors remain high. Sales from January to April are up six percent over the same period last year and combine sales are almost double those a year ago.

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Hamre said the 1994 year to date totals are artificially inflated. First quarter sales figures were propped up by late deliveries of equipment that was sold in November and December of last year.

Many bought early

Many farmers who were planning on buying in the first quarter of 1994, bought the piece of equipment at the end of 1993 instead, taking advantage of the federal government’s Small Business Investment Tax Credit program.

The program, which expired December 31, 1993, gave farmers a 10 percent tax credit on purchases of equipment like combines and tractors.

Hamre said the second quarter results will be a more realistic portrayal of actual sales. The numbers from April, May and June will be carefully scrutinized to see if the farm equipment industry is still in a slump or if it’s entering a long-awaited upturn.

Hamre said he is still optimistic that 1994 will be a good year and he senses a renewed confidence in the marketplace. Relatively stable commodity prices combined with a GATT agreement have eliminated a lot of the uncertainty in agriculture.

“At least people know where they’re at.”

Brett Philson, manager of Prairie Implement Manufacturers Association, agrees with Hamre.

“There’s lots of good things that indicate agriculture is swinging up a little bit.”

He’s talked to fan manufacturers and bin builders that can’t keep up with demand. Everything they build is sold and they are experiencing real problems trying to build any inventory for the fall.

“So much time elapsed since the last time farmers went out and bought equipment that they simply have no choice anymore. Their equipment is worn out and they’re going out there and buying new equipment,” said Philson.

Manufacturers are having a tough time keeping up with the demand. He has spoken with a couple of John Deere dealers who said they can’t get tractors or combines before fall.

Duane Smith, assistant manager at Jay Dee Equipment Ltd. in Swift Current, said it’s very difficult getting new equipment now, especially combines and four-wheel-drive tractors.

Some dealers are so desperate to build inventory that they’re telling manufacturers they have pre-sold an order when they really haven’t.

Lack of inventory is a sign of the times, said Smith, and equipment will be scarce as dealers cut back on inventory costs. This should send a message to farmers that they have to start planning their purchases six to nine months ahead of time.

About the author

Sean Pratt

Sean Pratt

Reporter/Analyst

Sean Pratt has been working at The Western Producer since 1993 after graduating from the University of Regina’s School of Journalism. Sean also has a Bachelor of Commerce degree from the University of Saskatchewan and worked in a bank for a few years before switching careers. Sean primarily writes markets and policy stories about the grain industry and has attended more than 100 conferences over the past three decades. He has received awards from the Canadian Farm Writers Federation, North American Agricultural Journalists and the American Agricultural Editors Association.

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