At Jim Keating’s farm equipment dealership in Weyburn, Sask., these are the dog days of January when big-ticket items rarely move out the door.
“This is not the time of year when you get people jumping up and down to get their signature on a new combine,” he said with a laugh during a Jan. 19 interview.
“It is traditionally a slow time of year.”
But like many other dealers across the Prairies, he recently has seen relatively good times. December was a good sales month nationally for larger equipment, ending a year that saw a 25 percent increase in combine sales and a 20 percent increase in large tractor sales.
Read Also
Canola oil transloading facility opens
DP World just opened its new canola oil transload facility at the Port of Vancouver. It can ship one million tonnes of the commodity per year.
“It’s hard to know where it is coming from, but there does seem to be some optimism out there or people would not be putting their money down,” said Keating, president of Canada West Equipment Dealers.
He has some theories.
A rising Canadian dollar makes imported farm machinery a better buy.
Farm consolidation means that farmers must buy larger equipment when their acreage expands.
And years of depression in the farm economy mean that many farmers have held off replacing aging equipment for as long as possible.
“Sometimes they just reach the point where they cannot wait any longer,” said Keating. “There is some pent-up demand. Of course, these numbers don’t reflect the used trade-ins we get either.”
At the Burlington, Ont., head office of the Canadian Farm and Industrial Equipment Institute, president Brent Hamre said nationally, 2003 sales were the best dealers have seen lately, at least for combines and large tractors.
Almost 1,250 combines were sold in 2003 compared to fewer than 1,000 in 2002.
“There was some pent-up demand in play and I think there were some good deals and promotions late in the year that made buying attractive,” Hamre said.
“But I am preparing the outlook for 2004 now and I can tell you the members I am talking to are not terribly bullish about the new year, so I think that tells us that people in the industry don’t really seem to think we have turned any corners.”
Then there are the continuing impacts of the bovine spongiform encephalopathy crisis and closed borders to Canadian cattle exports.
Hamre and Keating said there was a softening of sales in forage equipment and smaller tractors late in the year that is expected to spill into 2004 as the BSE crisis continues.
“The impact really began to be felt in the last quarter,” Hamre said. “There was a sharp decline in sales of smaller tractors and balers, typically equipment that cattle guys and dairy farms would buy. I certainly expect that to be a real factor for our industry in the new year.”
Meanwhile, the continuing consolidation of the farm equipment industry and its small Canadian market is creating a change in the political structure of the industry.
For many years, the industry has had its own national Canadian industry group. Now, the CFIEI is being dissolved and Canada’s industry is joining the organization created to serve the industry in the United States – the Association of Equipment Manufacturers, which represents business, construction and forestry equipment manufacturers, as well as agriculture. Hamre said statistics in future will be compiled for North America, “although of course, Canada’s numbers will be broken out.”
