It’s All In The Numbers: AEM Releases ‘09 Business Sales Forecast

The Association of Equipment Manufacturers (AEM) released their annual 2009 forecast for U.S. and Canadian ag machinery sales.
AEM said combine sales are expected to increase 9.3% in the U.S. and gain 1% in Canada. Sales of four-wheel-drive tractors are predicted to increase 4.4% in the U.S. but show no growth for Canada. U.S. sales of two-wheel-drive tractors are expected to gain 3.3% for the 100-HP-and-over range; remain level (down 0.1%) for the 40-100-HP sizes; and decline 11.2% for two-wheel-drive tractors under 40 HP. Canadian sales of two-wheel-drive tractors are expected to increase 5.6% for the under-40-HP range and grow 1.6% for the 40-100-HP tractors, and remain level (up 0.3%) for tractors 100 HP and over.
For farm field equipment other than tractors and combines, 2009 U.S. sales are predicted to be the strongest for planters, with a 9.3% increase, and for self-propelled sprayers, with a gain of 6.3%. Sales gains are also expected for windrowers/swathers (up 3.3%), field cultivators (up 2.0%), chisel plows (up 1.7%), post hole diggers (up 1.6%), forage harvesters (up 1.5%) and rotary cutters (up 1.5%).
U.S. sales in 2009 are expected to be essentially flat for several equipment types: rectangular balers (down 0.5%), box scrapers (down 0.5%), disk harrows (down 0.3%), mower conditioners (up 0.1%) and tractor backhoes (down 0.7%). Declines are foreseen in U.S. sales for farm loaders (down 2.8%) and round balers (down 2.3%).
Canadian ag equipment sales in 2009 will be on the plus side, for self-propelled sprayers (up 4.3%), forage harvesters (up 4%), rotary cutters (up 2.7%), round balers (up 2.0%), box scrapers (up 2.0%), rectangular balers (up 1.7%) and tractor backhoes (up 1.3%). The 2009 Canadian sales of other equipment in the AEM survey are predicted to be essentially flat: chisel plows (up 0.5%), disk harrows (up 0.5%), farm loaders (down 0.7%), field cultivators (up 0.7%) and mower conditioners (up 0.4%).
For component sales in 2009, the electronic components segment is anticipated to increase 8.8% for both U.S. and Canada. Hydraulic components are predicted to gain 7.8% for the U.S. and 6.7% for Canada. Sales of powertrains are predicted to increase 2.5% for the U.S. and 1.5% for Canada. Engine sales are predicted to be flat for both markets, down 0.7% for the U.S. and down 0.3% for Canada.
The AEM ag equipment industry outlook also asked farm equipment manufacturers to rate anticipated changes in more than 15 factors that have emerged as significant influences on machinery sales. For the U.S., more than 60% anticipate an increase in planted acreage and an increase in grain exports. The outlook for Canada is more subdued, with 34% expecting gains in planted acreage and 43% predicting grain exports to increase in 2009.
For U.S. financial factors, slightly more than 50% of respondents anticipate credit availability to remain about the same, with another 32% expecting a modest decline. Some 52% expect interest rates to remain the same, with 35% saying they will increase modestly. Some 47% predict U.S. farm cash receipts will be modestly up, and 30% say they’ll stay about the same. Net U.S. farm income is anticipated to be modestly up by 55% of respondents, while 24% predict a modest decline.
Looking at the financial situation for the Canadian ag equipment market, 79% of survey respondents predict no change in credit availability, and 13% expect a modest decrease. Some 58% expect interest rates to remain the same, and 33% predict a modest increase.
Net farm income is expected to stay the same for Canada, say 17% of respondents; 67% see a modest increase; and 17% predict a modest decline. For Canadian farm cash receipts, 21% forecast no change; 62% see a moderate increase; and 17% expect a moderate increase.
Replacement demand for equipment in the U.S. is expected to remain the same (44% of respondents) or increase modestly (47%). For Canada, replacement demand for machinery is anticipated to stay the same, say 39% of respondents, while 35% predict modest increases and 22% expect a moderate decline. ♦