From the editors of Ag Equipment Intelligence
Unit sales of compact tractors have been the historical bell weather used to gauge the general health of the rural lifestyle segment of the farm equipment business. As Rural Lifestyle Dealer marks its 10th year, it seems appropriate to review how the market for small farm tractors has fared over the last decade.
The Assn. of Equipment Manufacturers categorizes compacts as tractors of 40 horsepower or lower. Sales of this equipment hit its all-time high in 2004 when more than 140,000 units were sold. Despite slowing somewhat in succeeding years, when Lessiter Media (then Lessiter Publications) began publishing its Rural Lifestyle Dealer magazine in the Fall of 2007, sales remained strong. That year, nearly 130,000 compact tractors were sold throughout the U.S. and Canada.
Much of this growth was fueled by the migration of city folks to more rural areas where they could spread out a little. The resulting urban sprawl was either a curse or a blessing for many farm equipment dealers. The influx of new customers, which included those hoping to become “hobby farmers” or simply large property owners, represented the most significant growth market for those ag machinery dealers who were ready to meet the equipment needs of this new client base. The sales of small tractors, large mowers and other tools needed to maintain the rural lifestylers’ acreage boomed.
At about the same time, the U.S. economy was beginning to feel the impact of the housing crisis that ground economic growth to a halt. From a peak of 2.3 million in 2006, housing starts fell by 38% the following year and by 73% two years later.
The sale of compact tractors followed suit. By 2009, unit sales fell to 90,500, a 35% decline from 2004’s peak.
It has been a slow road back for both housing starts and compact tractor sales. While housing starts in 2015 were more than double those in 2009, they are still only about one-half of where they were in 2006, sales of compact tractors have fared much better.
It is estimated that 2015’s unit sales of small tractors will come in at about 128,000, only about 8.5% down from the 2004 peak.