A recent survey by Purdue University/CME Ag Economy Barometer indicated farmers are growing cautious in purchasing equipment given the uncertainties in the agricultural economy. The latest data from the Association of Equipment Manufacturers (AEM) suggests the hesitancy to purchase has yet to fully materialize. The AEM reports January sales of 2-wheel drive tractors with more than one hundred horsepower increased 23 percent—1,837 tractors this year versus 1,496 last year. Sales of 4-wheel drive tractors were down slightly, off 2 percent compared to 2021. Self-propelled combine sales totaled 477 units, up a phenomenal 133 percent. However, overall tractor sales were off 14 percent in January compared to the prior year due to a 23 percent drop in sales of units with less than 40 horsepower. Together, tractor and combine sales in January were off compared to 2021 and 2022, but still remained at the average for the previous five years (Figure 2).
January’s sales continued trends seen in 2022. Combine sales in 2022 were up 16 percent and 2-wheel drive tractors with greater than one hundred horsepower were up 11 percent compared to 2021. Overall tractor sales were down 15 percent due to weakness in the less than 40 horsepower category, off 19 percent for the year. The USDA projects net farm income will be lower in 2023 compared to last year. Lower income and economic uncertainties are assuredly causing farmers to think twice about equipment purchases. Thus far, though, while lower compared to 2021 and 2022, equipment sales this year are showing resiliency.
Figure 2. U.S. Retail Sales of Tractors & Combines
Source: Association of Equipment Manufacturers