According to a recent survey from Stifel, North American small ag dealers reported 5.1% sales growth in the fourth quarter of 2020, having benefited from “stay-at-home demand on the small ag side for nearly a year.” They’re also forecasting more sales growth over the course of 2021, though analysis suggests small ag dealer optimism may be impacted in part by “the vaccine rollout and upcoming difficult comps from 2020.”
Small ag equipment dealers reported 5.1% sales growth in the fourth quarter, compared to 6.5% sales growth from large ag equipment dealers. A net 50% of surveyed small ag dealers reporting their sales were higher than expected while 46% of large dealers reported the same. Commentary on 2020 sales growth from small ag equipment dealers was largely positive, with one Massey Ferguson and Kubota dealer saying, “2020 was an amazing year for all parts of our business. We are cautiously optimistic about 2021 and only expecting growth of 1-4%.”
Other commentary from small ag equipment dealers indicated problems with getting equipment from manufacturers. One Massey Ferguson and Kubota dealer indicated sales could have been even better, saying, “New inventory of under 100 horsepower tractors is very limited and hard to get. We could sell more if we could get more.”
Surveyed small ag dealers indicated they expected 4% sales growth over the next year vs. 6.7% forecast by large ag dealers. A net 0% of small ag dealers expected sales to strengthen in 2021, whereas 69% of large ag dealers were expecting strengthened sales next year.
Forecasts for 2021 showed some dealers echoing the growth forecasts, but others were less optimistic. One John Deere dealer expressed concern regarding the new administration, saying, “Very concerned with the change of guards in the White House and if this could eventually effect sales in the third and fourth quarters. Could see sales go flat and possibly decrease. Inventory was too low to keep up with demand and that could follow the same pattern this year. Difficult to forecast higher sales than last year.”