While the sales of big farm equipment in February finished mixed, March figures will bear closer scrutiny as they historically set the tone for the remainder of 2009.
That's the assessment of Robert McCarthy of RW Baird in his analysis of the latest sales numbers coming from the Assn. of Equipment Manufacturers (AEM).
"Agricultural equipment industry retail sales comparisons were mixed in seasonally weak February, but this month's data will be critical, as the spring tractor selling season starts in earnest in March," he says.
• Historically, February is a below average month seasonally for row-crop and 4WD tractor sales, contributing 6% of annual sales on average.
• Row-crop tractor sales declined 14% year-over-year after a 7% increase in January. On a last 3-month basis, sales declined 3% year-over-year.
• Sales of 4WD tractors increased 34% and were up 24% on a last 3-month basis.
• Combine sales surged 46% year-over-year, albeit in the least important month of the year seasonally. February typically contributes less than 4% of full-year sales. Combine sales had increased 13% year-over-year in January and were up 14% in the last 3-month period. U.S. only sales rose 40.7% in February.
• Comparisons for utility and midrange tractors remained extremely weak, falling 29% and 25% year-over-year, respectively. U.S.-only sales of under 40-hp units dropped nearly 26%, while 40-100-hp tractors fell nearly 32%.
• Inventories for large equipment remain relatively lean. Inventories for 4WD tractors and combines declined roughly 24% on a days-sales basis and absolute inventory levels were down 8-9% year-over-year. Row-crop tractor inventories increased 15% year-over-year, however, it was their third consecutive year-over-year increase.
AEM will report sales figures for March 2009 on April 10.
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