It looks like combines are in for a rough year. With the continuing slowdown in sales, you can’t help but wonder what will happen with combine rolls that have become so popular over the past decade. We know the sales of new combines are way off from year-ago levels and a huge backlog of used machines are taking up a lot of space on dealer lots.
A farmer we spoke with in late summer says he switched equipment brands this year for the first time ever because his dealer wouldn’t take his 1 year old combines in trade. He normally buys/rolls 5 combines a year. When we asked him how much he normally pays a year for his harvest equipment, he smiled broadly and said he couldn’t say because of an agreement he had with the manufacturer.
On October 10, the Assn. of Equipment Manufacturers reported that year-over-year sales of combines were down by 17.3% in the U.S. and 25.2% in Canada.
In our September Dealer Sentiments & Business Conditions Update report a net 50% of dealers said they would be ordering fewer combines than last year: 10% planned to order more, 30% about the same number as 2014 and 60% plan to order less. This was the weakest level of orders in the 3.5 year history of the survey.
Also in that report, 62% of the 139 dealers who participated said the value of used combines continues to fall. So far, combine values are down 7.7% year-over-year compared with down 7.1% in the previous survey. (By comparison, used high horsepower tractors are down about 2.3% year-over-year.) Nearly that same percentage (59%) also said their inventories of used machines were “too high,” on top of 51% who said their used combine backlog was “too high” in the previous month. That ties the high (59%) that we saw a year ago August.
One dealer’s comments in the September Dealer Sentiments report pretty much summed up the situation with combine rolls. He said, “Most dealers are moving from $100 per hour to $300 on combine rolls. If a farmer paid $32,500 a year to roll, that now goes to over $90,000. That is a hard sell with $3.50 corn.”
It looks like combines are in for a rough year.