Large machinery backlog clears; small tractor sales tumble
By MATEUSZ PERKOWSKI
While U.S. machinery exports have tanked, domestic sales of large farm machinery have been largely stable so far in 2009.
Unit sales of four-wheel-drive tractors are up nearly 8 percent, while combine sales increased more than 30 percent, according to the Association of Equipment Manufacturers.
Two-wheel-drive tractors over 100 horsepower have declined about 9 percent in unit sales since last year.
With about 15,300 units sold, however, that's still 18 percent higher than in 2007 and 36 percent higher than in 2006.
The positive numbers indicate farmers are taking deliveries of products they ordered during better times in 2008, said Eli Lustgarten, analyst with Longbow Research.
"We had a big backlog," Lustgarten said.
Growers who placed orders last year had to wait up to 12 months for deliveries, said Paul Kindinger, president and CEO of the North American Equipment Dealers Association.
As overseas orders were canceled, the delivery process sped up in the U.S., he said.
Farmers are now waiting only three to four months -- if the machinery isn't already in stock, Kindinger said.
The pipeline is now clear, but the effect on future machinery sales is not.
"A lot of those orders have been fulfilled now," he said.
The market for smaller machinery remains dismal, with unit sales for tractors under 100 horsepower falling 24 percent since 2008 and 34 percent since 2007.
Those trends reflect turmoil in the larger economy, said Charlie O'Brien, vice president of agricultural services for AEM.
The effect on dealers has been mixed, depending on their mix of products, Kindinger said.
Those in large-farm areas like North Dakota are going strong, while small-farm-oriented dealers in Alabama are feeling the pinch, he said.
"There's quite a difference in perception of what is going on," Kindinger said.
Staff writer Mateusz Perkowski is based in Salem, Ore. E-mail: firstname.lastname@example.org.