“Small equipment sales continue to trend strong,” said one dealer in response to Ag Equipment Intelligence’s June 2016 Dealer Sentiments & Business Conditions survey. It was one of few positive comments offered by dealers as sales of large ag equipment continue to struggle to find any traction in reversing a nearly 3 year slump in sales. Unfortunately, the June sales figures from the Assn. of Equipment Manufacturers marked the 29th month of large ag year-over-year declines, according to Mircea (Mig) Dobre, machinery analyst with RW Baird.
On the other hand, during that same 29 month period, sales of lower horsepower tractors, particularly tractors under 40 horsepower (compacts), have fallen into negative territory only four times. Year-over-year declines occurred in May 2014 (–2%), March 2015 (–4%), May 2015 (–5%) and September 2015 (–5%). Otherwise, through the first 6 months of this year, overall sales of compact tractors are up nearly 11% vs. the first half of 2015. As for mid-range tractors (40-99 horsepower), unit sales are down less than 2% through the first 6 months of 2016.
Despite the ongoing strength in sales, Dobre warns that, “compact and mid-range tractor inventories are at all-time highs with risks building.” Inventories of compacts were up 9.6% for the month (222 days-sales), while the backlog of mid-range equipment increased by 20.3% (243 sales-days).