Another good year is in the making for farm equipment dealerships if new tractor and combine sales are a good business indicator.
The Canadian Farm and Industrial Equipment Institute reports that in May, 475 four-wheel drive tractors were sold in Canada, up 162 percent from the same month last year.
On a year-to-date basis, 1,329 big tractors have been sold, compared to 674 in the same five months last year, an increase of 55 percent.
Two-wheel drive tractor sales are up about five percent over the first five months of 1996. All told, 5,294 two-wheel drive units were sold from January to the end of May.
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“I’m amazed, to tell you the truth,” said Rick King, of Saskatoon Farm Equipment. “Business was great last year and to date we’re 20 percent ahead of last year.”
Grain and oilseed prices have been falling for months, yet his business is good. King credits several factors: pent-up demand, low interest rates, bigger farms and fewer dealerships.
“Farms are bigger and people have to expand their line of machinery and it’s benefiting the manufacturers and it’s benefiting us,” he said.
“Also, before you were buying a tractor or combine at 12 to 14 percent interest and now it’s down to 5.9. That makes quite a difference.”
Harvey Aberhart, of Greenfields Equipment in Russell, Man., said business is good but a lot of the equipment moving off his lot was ordered last year.
“It’s hard to know what farmers are thinking when grain prices are down, but a lot of them made commitments before the prices went down.”
He’s not sure how many new orders will come in, given falling grain prices and Manitoba’s dry weather.
Less money changing hands
Also, he speculated that many farmers who had very old machinery have already made the big jump to newer, more expensive equipment. Business now might be from those trading up from late model equipment to factory fresh units and the money trading hands will be less.
“But it’s been pretty good to now and it could be pretty good yet.”
The institute said self-propelled combine sales are also up.
It reported that in the first five months, a total of 610 combines have been sold, an increase of 3.2 percent over last year.
Self-propelled swathers are also up with 308 sold in the first five months, up 82 percent over last year.
Other types of equipment such as balers, forage harvesters and mower conditioners show fewer sales on a year-to-date basis, but things might be turning around.
In May, dealerships sold 50 to 83 percent more balers, harvesters and mower conditioners than in the same month last year.
