The farm equipment industry had a banner year in 1996 but already the sales-induced smiles are fading as worries about 1997 begin to surface.
“Clearly, 1996 will be a tough act to follow,” said Brent Hamre, president of the Canadian Farm and Industrial Equipment Institute.
In Calgary, the head of New Holland Canada Ltd. said sales overall likely will dip by 10 percent this year.
“That has been the prediction and I think that assessment is probably in line with what the industry is going to do,” said Jerry Dieker, Canadian branch manager for the company.
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In some product lines, a 10 percent fall from last year’s levels still signals a good year.
Self-propelled combine sales exploded last year for a 41.5 percent increase to 2,950 units sold.
Factors involved
It was the highest sales total in 13 years and industry officials say prairie sales rocketed because of a combination of transportation subsidy buyout money from the federal government, high grain prices and farmer optimism.
There was also pent-up demand among farmers who delayed equipment replacement for years because of low prices and uncertainty.
Dieker said some of that built-up demand was satisfied last year, but he expects another strong year.
“It’s true that some of the demand is gone but I still think there is substantial business to be done out there this year,” he said. “I still think the consumer is feeling confident for 1997.”
According to sales records compiled by the institute head office in Burlington, Ont., total tractor sales were up five percent to just under 14,000 machines sold.
Self-propelled swather sales were up 6.3 percent while sales of pull-type swathers continued to fall.
The switch from rectangular bales to round bales also was evident last year as round baler sales increased slightly to just under 3,000 while sales of rectangular balers declined 5.5 percent to 549.
Last week, farm machinery manufacturers gathered in Toronto at the institute’s annual meeting to swap tales about the year that was and to hear predictions about 1997.
Optimistic year
They heard that farm income this year is expected to be strong, if slightly below 1996 levels.
An outlook summary prepared for the meeting predicted combine sales of 2,290 this year, but Hamre says that projection may prove to be too cautious.
Weather, grain prices and markets all will have an impact on sales. “This conservative forecast for 1997 combine sales reflects the world market uncertainties,” according to the outlook document.
Hamre said a problem for farmers this year may be that with company inventories low after last year’s better-than-expected sales, combines may not always be available when they are wanted.
Dieker laughed at that prediction.
“I would put it differently,” he said. “I would say inventories are being managed by the major companies quite well. I would like it if some of my competitors ran out of stock but I don’t really expect that will happen.”
