U.S. retail sales of farm tractors under 40HP were up 26.2 percent in February 2016, compared to the same period last year, according to the Association of Equipment Manufacturers (AEM). Another indicator of a strong start to 2016 and a continuation of last year’s trend is year-to-date growth of 19.7 percent in this category.
Retail sales for 2WD tractors of 40-100HP grew by 5.8 percent in February compared to last year bringing the year-to-date growth to minus .9 percent. There continues to be volatility in this tractor segment. The expected decline in 2016 farm income and in particular the 4.3 percent decline in livestock receipts will be challenging for this segment.
“Small farm tractors under 40HP continue to shine in the current environment and the Ag Tractor and Combine Reports are hinting that 2016 is gearing up to look a lot like 2015,” said Charlie O’Brien, AEM senior vice president.
Larger production agriculture farm equipment such as the 2WD 100HP continued its double-digit declines. Moving into 2016, the 4WD farm tractor segment declined by single digits in January; however, the February report revealed a 43.6 percent decline year over year. Both categories are seeing the result of the lower commodity prices and still suffer from the large amounts of used inventories in the marketplace.
“While the 2016 farm income reports released last month by the USDA still shows a slight decline in expected income, it does look more like a stabilization of the industry,” continued O’Brien. “Looking at the Farm Business (NCFI) income, aside from regional differences, it appears that the income was up for most crop farms and down for most livestock farms, providing new opportunities.”