The Association of Equipment Manufacturers report that production ag machinery has been in a downward trend, with over 100 horsepower 2WD tractors, 4WD tractors, and combines showing negative numbers for the month.
Adding to those woes, main ag commodity prices declined after the U.S. Department of Agriculture (USDA) released its World Agricultural Supply and Demand Estimates (WASDE) report showing higher forecasts for corn and soybean production due to better than expected yields. Lower commodity prices mean lower farm incomes and fewer machinery purchases, said AEM Market Intelligence Director Benjamin Duyck.
On top of that, China last week devalued its currency by 3.5 percent by Wednesday, compounding issues for U.S. manufacturers as their export position will continue to deteriorate. Duyck said devaluation of the Yuan also has an effect on demand for commodities, as they become more expensive to the Chinese, causing imports of U.S. milk, soybeans, and cotton to decline.
A complete video report is available on the AEM website.