U.S. Equipment Sales Grow

Canada's tractor business growth significantly less than United States' expected 6.2% growth in 2004. Compiled by staff

Published on: Jul 13, 2004

Total U.S. sales of agricultural tractors are expected to increase 6.2% in 2004 followed by 2005 sales growth of 3.4%. Overall Canadian tractor business is predicted to gain 0.5% in 2004 and 4.8% in 2005, according to the semiannual "State of the Ag Industry" forecast of the Association of Equipment Manufacturers (AEM).

The U.S. market for self-propelled combines is expected to increase 25.1% in 2004 but level off in 2005 with 0.2% growth expected. Canadian self- propelled combine sales are predicted to drop 5.1% in 2004 and decline 1.9% in 2005.

Sales increases are expected for all types of tractors sold in the U.S. in 2004. For 2005, the only decline expected is for 4-wheel-drive tractors, of 1.3%. In Canada, the most robust sales growth is expected for 2-wheel-drive tractors under 40 PTO Hp, 4.1% in 2004 and 6.2% in 2005.

For other types of agricultural machinery covered in the AEM survey, manufacturers predict U.S. yearend 2004 sales growth on all but one category -- a 5.6% decline for chisel plows. For Canada, manufacturers predict slower yearend 2004 business overall compared to the U.S., with a positive outlook for windrowers/swathers, disk harrows, field cultivators, farm loaders and milking machines.

Mixed market growth is expected in 2005 for both the U.S. and Canada. In 2005 the U.S. market is anticipated to be led by sales of farm loaders, with the strongest Canadian sales predicted for round and rectangular balers.

AEM polls agricultural equipment manufacturers for their predictions of overall industry business growth. These companies account for a majority of agricultural equipment sold in the U.S. and Canada.

Manufacturers cited continued credit availability and government payments as the major economic factors driving future U.S. equipment sales, followed by interest rates and net farm income. Other positive factors: American farmers' attitudes toward buying equipment and replacement demand. Negative factors included the quantity of used equipment available and prices of new farm machinery.

Canadian sales are also expected to be positively influenced by credit availability, but manufacturers were more negative about Canadian interest rates and net farm income. In contrast to the U.S., the buying attitudes of Canadian farmers and replacement demand were cited by manufacturers as negatively affecting future business.

The full report is on the AEM Web site.