Small Tractor Sales Align With General Economic Indicators

Many economic indicators that measure the general health of the U.S. economy are trending upward, and this is good news for rural lifestyle dealers who count on sales of smaller equipment and machinery.

This is particularly true when compared to dealerships who rely on big ag equipment for a bulk of their sales. Unit sales of tractors bear this out during the past decade.

During the 10 years beginning in 2009 through 2018, sales of compact tractors (under 40 horsepower) are up by 87 percent and they are higher than the average during this same period by 38 percent.

For the same 10-year period, mid-range (40-100 horsepower) tractors, while down by a little over 4 percent from the peak year (2013) are up by 18 percent. Sales in 2018 are also up 5.6 percent when compared to the 10-year sales average.

In his analysis in Rural Equipment Intelligence, executive editor Dave Kanicki correlates this sales trend of compact and mid-range tractors with general economic indicators, such as sales of new single-family homes, disposable personal income, and landscaping employment, all of which are also on the rise.

He writes that the most important indicators for production farmers, or those most likely to invest in the biggest equipment, include net farm income and commodity prices, both of which are expected to remain low.

Those indicators bear out in weak sales of high-horsepower (100-plus) row-crop tractor sales, which continue to struggle to get near the average over the past decade.

Compared to sales of high-horsepower tractors during the peak year of 2013, unit sales in 2018 were nearly 50 percent lower. Sales in 2018 were nearly 19 percent lower. When matched up against the 10-year average, row-crop tractor sales are down by 27 percent.

Source: Rural Lifestyle Dealer