We’re getting a fair amount of improving vibes from the dealers these days. Maybe the best of the best is that used equipment inventories are looking better than they have for some time.
We’ve been reporting during the last few months that there were signs popping up in various places that suggest that business levels are improving for North American dealers. Many of these came from our own dealer surveys during the past year.
Last week I had the chance to speak to a bunch of investment managers at a meeting organized by an investment bank. Most times their questions are fairly predictable, but sometimes they aren’t. Some of these managers are very “detail oriented,” which they should be, and they ask for hard numbers.
North American farm machinery dealers continue to report listless but stable sales trends. Through the first quarter of 2017, dealers say equipment sales were still in negative territory year-over-year, but improved compared to the last quarter of 2016.
Almost since the sales of farm machinery began its slide in late 2013 and early 2014, used ag equipment headlines have dominated the industry’s headlines. And rightfully so. Many of the best dealers in North America have said it, “The one thing that will destroy a dealer’s business faster than anything else is an uncontrolled inventory of used equipment.”
North American farm equipment dealers lowered their forecast for 2017 sales in September. According to the latest Dealer Sentiments & Business Conditions Update survey, in September on average, dealers are forecast sales to be down 8% in 2017.
One of the more interesting comments I’ve read from an outsider looking into the current ag equipment environment came from an Aug. 17 report that quotes Karen Ubelhart, an analyst at Bloomberg Intelligence in New York. In assessing the current sales slump and the ongoing backlog of used farm machinery, Ubelhart said, “People are comfortable that it’s bad and that it will take a while. It’s not great, but they’re not bleeding. It’s just not getting better.”
We regularly hear from dealers that $4 corn and $10 soybeans represent the psychological threshold for farmers. When corn goes over $4 and beans over $10, most farmer’s outlook improves markedly. Over the last month or so we’ve seen a nice increase in crop prices. I was on the road last week visiting dealers, and one of them mentioned he’s started to notice an improvement in farmer sentiment.
After what looked like some progress at the end of last year, dealers in the February Dealer Sentiments & Business Conditions Update survey reported that both new and used farm equipment inventories sitting on their lots remains “too high.”
In this episode of On the Record, brought to you by Associated Equipment Distributors, we take a look at Titan International’s 2024 results, and the tire manufacturers outlook for this year.
Built on 90 years of expertise, Yetter Farm Equipment leads the agriculture industry in designing effective and innovative equipment for residue management, seedbed preparation, precision fertilizer placement, harvest attachments, strip-tillage, and more.
At Machinery Scope, we believe you deserve the best risk management solutions for your investments in heavy equipment. Since 2013, we have been proud to offer extended warranty, appraisals, and inspections. Machinery Scope is a family-owned business built on our experience in farming and equipment dealerships. We understand your business and provide a personalized and professional level of customer service. Machinery Scope has built a strong warranty product with our customers in mind, offering the same professional level of service from the time you get a quote, through the processing of a claim.
Finance Scope is able to provide the best financing opportunities for equipment dealers and customers through a diverse mix of lending companies under one single platform. Our large group of lenders, allows for competitive rates regardless of credit scores. Additionally, dealers and customers have access to the industry’s best expertise surrounding finance and lease structures, for all purposes, within the agricultural and construction industries. We provide all of this into one online platform to provide our customers with the best available tailored finance solution for their equipment.