SASKATOON — Since farmers are losing a tax credit, equipment dealers are forecasting fewer sales this year.
A business investment tax credit was introduced by the Conservative government in December 1992 and, despite lobbying by the industry, wasn’t extended into 1994. The credit allowed farmers to claim 10 percent of the value of new machinery purchases as a tax writeoff.
“We’re seeing strange swings in expected sales,” says Jerry McLeod, regional sales manager for J.I. Case Canada. “We can only assume a significant amount of business was pulled forward into 1993.”
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In sales projections gathered from members of the Canadian Farm and Industrial Equipment Institute, national sales of 40-99 horsepower tractors are forecast to decline 12 percent in 1994; two-wheel drive 100-plus horsepower tractors by 24 percent; 100-plus h.p. four-wheel drive tractors by 20 percent; round balers by 13 percent; and combines by 27 percent.
McLeod was part of a panel that presented the results of the survey to the institute’s annual meeting held in Saskatoon in January.
While the 1994 forecast looks bad compared to 1993’s booming sales, most of the projections equal or exceed 1992 sales.
Highlights of the forecast include:
Tractors:
- 40-99 horsepower: Sales are forecast to be down by 12 percent. About 70 percent of the sales in this sector are made in Eastern Canada to dairy farmers. Lawrence Ruud, vice-president of marketing for John Deere Ltd. said concerns about the impact of the new GATT deal on the dairy industry may depress sales in this market.
He added 1993 sales of 40-60 h.p. tractors were down sharply, but 80-99 h.p. tractors were up. He expected this trend to continue.
- 100-plus horsepower 2WD and 4WD: McLeod commented that the tax credit had a significant impact in this market but better grain prices and strong livestock prices were also responsible for sales of 3,985 units nationwide. Several new models were also launched in 1993. “There’s money out there if there’s incentive to buy,” he said.
Combines
- “If others can remember a better year for combines, I can’t,” McLeod said, adding that even without the tax credit “we’ll enjoy another decent year in combine sales.”
Nationally, 2,564 self-propelled combines sold in 1993, compared to a forecast of 1,842 in 1994. That number, however, is about four percent ahead of actual 1992 sales.
