In this episode of On the Record, brought to you by Associated Equipment Distributors, we take a look at the latest used combine pricing and inventory report from Sandhills Global. In the Technology Corner, Noah Newman highlights some of Deere’s latest upgrades that will allow farmers to take smaller steps with precision technology. Also in this episode, Alamo Group’s 2024 results and response to tariffs and February same-store tractor sales. This week’s DataPoint highlights dealers' new equipment inventories.
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TRANSCRIPT
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- Used Combine Inventories Drop in February
- Dealers on the Move
- Deere Upgrades Allow Farmers to Take Smaller Steps with Precision Tech
- Tracking Crop Prices
- Same-Store-Store Tractor Sales Down 27% in February
- Alamo Group 2024 Net Sales Drop 3.6%
- DataPoint: New Equipment Inventory Levels Remain Elevated
Used Combine Inventories Drop in February
According to the March 5 Sandhills Global used equipment Market Reports, average combine asking prices were flattish year-over-year and month-over-month in February.
Asking prices for used Class 4-7 combines were down 3%. Asking prices for Class 8 combines and higher were also down 3%. Average auction prices for combines were up 1% year-over-year and month-over-month.
JP Morgan analyst Tami Zakaria noted that inventory for used combines was down 6% year-over-year, with an increase in Class 8+ combines more than offset by a decline in Class 4-7. On a monthly basis, inventories were up 2% for combines.
As of AEI’s latest Dealer Sentiments & Business Conditions Update, a net 30% of dealers reported their used combine inventories were too high in January, up 1 point from those who said their combine inventories were too high in December.
Dealers on the Move
This week’s Dealer on the Move is Messick Farm Equipment. The New Holland dealer acquired Rovendale Ag & Barn, adding 3 stores for a total of 8 locations in Pennsylvania.
Deere Upgrades Allow Farmers to Take Smaller Steps with Precision Tech
John Deere made a wave of new precision-related product announcements over the last few weeks, one of them being MaxEmerge 5e and ExactEmerge meter upgrades. As Deere VP of Precision Upgrades Than Hartsock tells us here, the idea is to make it easier for farmers to invest in precision technology without having to buy a completely new row unit.
“A lot of farmers are familiar with our high-speed planting system — ExactEmerge. If you want to add the ExactEmerge meter and the BrushBelt that delivers the seed down to the ground, we have these meter upgrades that make it easier for farmers to take a step instead of a whole step. We still have our Ultimate Planter Upgrade, which instead of just taking the meter and the drive step, you can pull off the whole row unit and buy all the row units together. That’s positioned well for planters that may be older (2010-2012), where more of the traditional parts on the planter row unit might be warn. We make that easier to pop that off and put on a whole new row unit with these technologies integrated. In summary, you can take steps or do the ultimate and plug a whole row unit in.”
Deere also just announced the release of an autonomy precision upgrade kit for select tractor models that brings autonomy to tillage work. Head to PrecisionFarmingDealer.com for more information on that news.
Tracking Crop Prices
As of March 11, corn prices were $4.70 down 8 cents from our last episode two weeks ago. Soybeans closed at $10.11, down 13 cents. And Wheat closed at $5.56, down 10 cents.
Same-Store Tractor Sales Down 27% in February
Constellation Dealer Insights Tractor Market Update shows that same-store sales were down 27% year-over-year in February.
The report is based on the data from 235 dealers, who account for 109,000 wholegood units and $2 billion in total sales.
These dealers reported $48 million in sales in February vs. $66 million in February 2024 and $76 million in February 2023.
Commenting on the report, DA Davidson analyst Michael Shlisky says, “At this point in the year, we are not expecting much improvement, especially since February is considered the off-season and can be volatile from year to year. It remains to be seen whether tariff or economic uncertainties are affecting farmer behavior--we expect to get a better sense of how that is playing out when we receive March and April Same-Store Sales data. Comps to get easier as we move through the year, and the farm outlook is better than 2024, so we would not be surprised if the Year over Year volatility declines in the coming months.”
Alamo Group 2024 Net Sales Drop 3.6%
Alamo Group announced its 2024 net sales of $1.6 billion, down 3.6% year–over-year.
Net sales for the year in the Vegetation Division — which includes brands like Bush Hog, Schulte, Dixie Chopper and others — came in at $785.2 million, down 19.8% for the year.
For the fourth quarter, the division’s net sales were $159.8 million, down 25.5% year-over-year.
During Alamo’s earnings call with investors, President and CEO Jeff Leonard said, “Dealers have remained cautious as they anticipated relief in interest rates has been further delayed by the Fed as it continues to battle inflation.”
Talking about the ag equipment market, Leonard went on to say, “Sales in this market also declined throughout 2024, including the fourth quarter. However, order bookings improved sequentially every quarter during 2024, and fourth quarter book-to-bill was the highest of the year. While dealer inventories remained elevated, they've continued to come down.”
Addressing the tariffs and plant capacities, Leonard said the company repurposed its plant in Wooster, Ohio, from forestry and tree care equipment manufacturing to snow removal, which was done partly to mitigate the potential risks related to tariffs. Because of that, Alamo can produce snow removal equipment for the U.S. market inside that facility and use its Canadian facilities to serve the Canadian market.
New Equipment Inventory Levels Remain Elevated
This week’s DataPoint is brought to you by the Dealership Minds Summit. To learn more and to register, visit DealershipMindsSummit.com.
The February Dealer Sentiments report shows that dealers’ new equipment inventories remained elevated in January. A net 62% of dealers said their inventories were too high vs. a net 65% who said their inventories were too high the month before.
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