According to a survey from Stifel, North American dealers of small ag equipment had notable sales growth in the second quarter. Survey results pointed to small ag inventory shortages driven by a new demand from “gardening/hobbyist activity amidst COVID-19.” As one surveyed dealer of small Massey Ferguson equipment put it, “[We had a] surprisingly strong first half — people at home working gardening was the reason. Strong economy otherwise. Not selling much to pro farmers — just weekend warriors.”
Small ag dealers saw a 6.5% sales increase in the second quarter of 2020, compared to a 0.1% increase from large ag dealers. Small ag dealers also expect a 4.7% increase in next 12-month (NTM) sales, in addition to 60% of them seeing their new equipment inventory as “too low.” Based on available information, the report says, “there is potential for a small ag restock in the 2H20 following the significant destock in the 1H20 (particularly 2Q20).”
Small ag dealers saw sales growth of nearly 7% in the second quarter of 2020, compared to little to no growth from large ag dealers. Overall reported sales growth came in at 3%.
When asked about their optimism concerning current and future conditions, a net 12% of small ag dealers indicated they were optimistic, compared to 7% of large ag dealers. Survey results showed a net 28% of small ag dealers saw a net benefit from the COVID-19 pandemic to their 2020 outlook.
Commentary from small ag dealers reflected their positive attitudes. As one New Holland dealer said, “If inventory is available & interest rates stay low, sales should be good for the rest of the year.” Another Massey Ferguson dealer said, “Things are moving, under 100 horsepower is hot.”
Some comments did reflect the low new inventory levels. One Massey Ferguson and Kubota dealer showed concern for how it would impact their equipment sales, saying, “We had a fantastic second quarter but now we can't get equipment, so I'm concerned we won't have anything to sell for the rest of the year.”