Farm equipment sales are down significantly this year, but the head of the Association of Equipment Manufacturer‘s Ag Sector remains optimistic about the industry.
“We’re in the business of feeding and harvesting food and you need equipment to do that,” says Charlie O’Brien, AEM Senior Vice President and Ag Sector Lead. “Even though the numbers for this year are down, we’re still going to have a very good year – probably one of the top ten years we’ve had.”
According to AEM, sales of 4 wheel drive farm tractors and combines are down 15 and 17 percent respectively so far this year. But O’Brien says some categories are increasing. “Smaller horse power tractors, under 40 horsepower, are up 8.7 percent and horsepower at 40-100 are up seven percent,” said O’Brien, noting that the dairy sector is purchasing equipment with the higher price of milk.
Lower commodity prices are the main reason for the drop off in sales this year, but O’Brien says farmers are still carrying strong balance sheets from previous years and there is always a need for increased productivity and efficiency. “We continue to need the technology that our equipment offers,” he said.
O’Brien adds that they are also optimistic that the Section 179 deduction and bonus depreciation will be reinstated providing farmers the incentive to purchase new equipment.
Listen to O’Brien discuss more reasons not to panic about lower farm equipment sales this year: [wpaudio url=”http://www.zimmcomm.biz/AEM/aem-obrien.mp3″ text=”Interview with Charlie O’Brien, Association of Equipment Manufacturers”]