The recent downturn in the agricultural economy continues to have a reverberating impact on associated businesses – most notably agricultural equipment.
Of course, nothing is an absolute when it comes to the economic trends in agriculture. For instance, you normally don’t see every sector of agriculture (or region of the country) following the same trends. Grain producers might lament poor prices, but it’s a welcome sign for the livestock sector.
It is that way with machinery, as well. While the demand for higher horsepower equipment has been on the downswing, and the numbers from equipment manufacturers haven’t been all that positive, the ENTIRE equipment sector does have some bright spots.
Participants at a recent regional membership meeting of the Association of Equipment Manufacturers noted that in the under 100-hp sector for tractors, the market is still growing. It’s a ray of sunshine in an overall gloomy sector.
“It’s production ag that is suffering the most,” says AEM Market Intelligence Director Benjamin Duyck.
While I know that most of you are probably more concerned about your growing crops, it’s still important to remain apprised of the trends that are occurring. It can help to plan out strategies for buying or selling equipment, or deciding if an aggressive maintenance program is more in the cards rather than trading in for new.
But trends, as we all know, will change. And agriculture has a trump card: “While we might be facing a short-term downturn in the ag sector, our future is secure as an ever-growing world population with increasing dietary needs requires more output and increased farmland productivity,” Duyck says.