Dealers’ Sentiments, Outlook ‘Somewhat’ Improved
While farm equipment sales remain in the doldrums, U.S. and Canadian dealers’ sentiments about business conditions improved slightly according to the results of Ag Equipment Intelligence’s most recent Dealer Sentiments & Business Conditions Update survey. Here’s what dealers are reporting about current business conditions for ag machinery.
Sales: Average dealer sales were reported down 12% in February, slightly better than the 13% decline reported in January. A net 22% of dealers missed their sales budget in February, making for the 23rd consecutive month of net budget misses. A net 40% of dealers reported a sales decline in the month vs. a net 50% citing a decline in January. Commercial and consumer lawn equipment sales continue to show strength, while large equipment demand remains very weak.
Outlook: The full year 2016 dealer average sales growth forecast was reported at down 10%, an improvement from the down 11% forecast in January with a net 42% of dealers forecasting a sales decline for the year vs. a net 54% forecasting a decline last month.
Inventory: A net 42% of dealers reported new equipment inventories as “too high,” an improvement from the net 60% in January. Used inventory levels were in line with January, as a net 40% of dealers reported inventory as “too high.” Used combine inventory has worsened in the past several months after improving throughout 2015.
Pricing: Dealers reported relatively flat new equipment pricing following a slight uptick in the fourth quarter (~0.5-1%) as Tier 4 sales and OEM price increases have been offset by greater discounting at the dealer level. Used large tractor pricing is reported down 7% year-over-year on average, a slight improvement from the 8% decline reported in January. Small tractor pricing was about flat for the month. Used combine prices were reported down 14%, a slight decline from the 12% decline reported in January.
