Monthly sales figures from the equipment industry, as reported by the Association of Equipment Manufacturers, are a great barometer of what farmers are thinking. If they go up, which they have for the past three years, you're in a good mood. When they go down, those numbers are saying you're holding back, hunkering down...taking a breather.
The September numbers show farmers really stepped back - of course many were at major farm shows that month too so there's still interest in equipment and technology. According to AEM, row crop tractors (those above 100 horsepower) fell 37% when compared to the same period in 2008. And combine sales, which have remained strong through the year, slipped 8.5% in the same period.
In fact, that combine decline is the first reported for that sector in 29 months. And all segments were soft.
I've written about these figures in the past, and it's important to remember that they do rise and fall - both seasonally and when adjusted for external economic factors. Equipment makers are on the ball here, they've cut production, slowed down or shut down factories and backed off building up inventories so they don't get hit financially with softer sales - even though inventories have crept up in the year-over-year figures.
Given that preparation, the majors are hanging in there, rethinking their business models and they know you'll be back. Equipment wears out, technology improves and the relentless march for improved productivity continues.
But here's another idea: buy, buy, buy! When sales are down, dealers are hungry. They have machinery on their lots they may need to move and this could be a great time to buy. Interest-saving and promotional finance programs may be available too as machinery makers look to provide an incentive for you to stop in.
If you're still retooling your farm's machinery fleet, softer sales and rising inventories at dealer lots could mean a potential "great deal" is waiting for you.
Consider it the "glass half-full" opportunity from an optimist for American agriculture. If you have the cash, this may be the best time to buy in the past four years. It's worth taking a look.
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