Understanding today’s farm economy is no small feat; however, some trends are beginning to make themselves a bit more clear.
AEM’s Senior VP of Agricultural Services shares what he sees in tractor and combine sales.
According to Curt Blades, “During the pandemic, we saw dramatic growth in tractors and combine sales. So we’re comparing numbers off of what were really high numbers to begin with. So to see these declines, obviously, that causes some concerns, but it’s also, we’re coming off of some high numbers. So, when you look at the long-term view of agriculture looking back five years or looking ahead five years, there’s still lots of room for optimism. However, you know right now we’re dealing with, you know, kind of, you know, a lot of uncertainty in the ag market and that’s reflected in the capital market, in the capital equipment market specifically.”
One key factor to all of this is commodity prices.
“The number one thing is going to be commodity prices for selling, you know corn and soybeans today that
are right at or below the cost of production. That’s a real problem, but then you have to go into what’s leading to some of those things. Obviously, there’s some dark storm clouds out there, whether it’s trade issues, whether its global politics that are figuring into it, whether it’s uncertainty in the biofuels market, the lack of a Farm Bill, interest rates—you can just kind of go through a whole lot of factors that are leading to you know, sort of that malaise that the farm community might be feeling right now. Couple that with maybe some of the demand was met during the pandemic when times were a little bit better. So you know, maybe the fleet can stand another year. So, all these things kind of combine to these numbers, the numbers showing up,” he explains.
Blades says that he is a farm kid at heart, and during his recent travels through Nebraska and Missouri, he could not help but be impressed by the crops he passed.
He hopes for higher prices for growers and recognizes their effect on farmers’ mentalities.
