Farm tractor makers keep inventories under control

Farmer Iron

A look at the December AEM farm tractor, and combine sales report - called the Flash Report - is good news for farm machinery makers.

Published on: February 4, 2014

Final equipment sales/inventory figures reported by the Association of Equipment Manufacturers for 2013 offer a look at another stellar year for machinery sales. Every category rose for the year except four-wheel drive tractor sales - and those only slipped 0.4%.

For the whole year, total farm tractor sales came to nearly 202,000 machines and showed a sales rise of 9.1% or the year. Combine sales were up too by 9.8% for the year - including a big jump in December as farmers scrambled to take advantage of that last year of the big Section 179 tax break.

In fact, in December of 2013 1,279 combines were sold, which is 39% higher than the same month a year earlier. That helped push sales numbers higher and made 2013 another banner year.

For 2013 the sales year was solid for equipment makers, new. innovative equipment like this John Deere 7 R series will be part of the 2014 plan to keep sales rolling.
For 2013 the sales year was solid for equipment makers, new. innovative equipment like this John Deere 7 R series will be part of the 2014 plan to keep sales rolling.

On the inventory side the states show that manufacturers are keeping control of manufacturing as well, with inventories sticking at 6 months of supply or lower. And in some case inventories are even tighter. For 100-plus horsepower farm tractors, beginning inventory for December was 12,257 machines which is about a 3-month supply for total sales. For combines, the supply is even tighter, running at about a 2-month supply. There's not a lot of new larger equipment sitting on dealer lots.

At under 100-hp, inventories are running a little higher topping six months on hand for both the under-40-hp and under 100-hp classes of equipment. The under-40-hp farm tractor class has been recovering from the residential slump of 2008 which harpooned sales of these popular tractors, but with sales up 9.1% for the year, it appears that class is getting back on track.

Going forward, inventories could tighten further. The industry is watching the buildup of new machines more closely as they look at sales potential in 2014 where crop prices are softer, and tax breaks have disappeared.

You can check out the December AEM Flash Report online.