A Tale of Two Tractor Trends

A Tale of Two Tractor Trends

The Association of Equipment Manufacturers has released its August 2015 tractor sales numbers. Are sales up or down from last year? That depends on how much horsepower is involved.

For tractors less than 40 HP, sales are slightly up from 2014. August 2015 sales came in at 8,802, which is 1.2% higher than 2014. Year-to-date sales are at 84,102 in this category, up 7.6% from last year.

Larger HP tractors tell a different tale, however. In the 40 to 100 HP category, sales are down in August 3.1% from 2014 but up slightly on the year by 1.6%. And tractors over 100 HP are down 30.3% in August and 20.0% year-to-date when compared with 2014. So far in 2015, 16,528 100 HP tractors have been sold, as compared to 20,648 over the same period in 2014.

Greg Peterson, also known as Machinery Pete, says these trends are not surprising, especially with the increase in below-40 HP tractor sales.

"The general economy is improving, and the job market is steadier," he says. "I've talked to implement dealers this week who have stores dedicated to the lawn and garden side and smaller HP tractors. They tell me that side of the business has been very good and active."

Benjamin Duyck, director of market intelligence for AEM, says several factors are at play driving larger HP tractor sale trends – anything from lower commodity prices to a strong U.S. dollar can have an impact, he says.

“Last month, we saw the Chinese government devalue its currency,” he says. “That really highlighted the situation that the U.S. manufacturers are in today. The strong U.S. currency is putting us at a competitive disadvantage.”

Export numbers support this, Duyck says. Exports of U.S. agricultural equipment have dropped 16% in Q2 versus 2014. Exports were actually up in Central America ( 5%) and Asia ( 19%) but down big in other areas such as Europe (-31%), South America (-30%) and Africa (-22%).

Long-term, Duyck has hope for future growth in all tractor categories.

“In the long run, strong global demand for food and biofuels, in addition to rising productivity in emerging markets, will continue to support growth in U.S. ag manufacturing,” he says.

For more information, visit www.aem.org/agreports.

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