Corn combineDespite the severe drought, a new report finds farm equipment sales remained strong across the U-S last year.

The Association of Equipment Manufacturers reports combine sales were nearly steady from the previous year, while tractor sales rose 10%.

The group’s senior vice president, Charlie O’Brien, credits farmers’ confidence in the ag economy.

“That drove tractor sales in the smaller units for the smaller farming operations,” O’Brien says. “There was also certainly very good commodity prices which drove the 100-horsepower and four-wheel-drive tractor sales.”

A recent federal report found 60% of the lower 48 states are still in drought, including all of Iowa, a figure that’s been virtually unchanged since July.

Strong demand around the world for American corn, soybeans and other crops means high commodity prices and that’s helped farmers keep their debt low. The result is there’s money available to buy new machinery.

O’Brien’s outlook for this year is “conservative optimism” — conservative because he doesn’t yet know the long-term effects of last year’s drought.

He says, “Talking to some people that were severely impacted by the drought, there were some people in Indiana last week that said they’re still 12-inches below where they need to be from a moisture content perspective and whether or not there’s carryover in 2013 from pulling out of the drought.”

There’s also concern about what might happen to the farm bill in Congress. For those reasons, he predicts farm equipment sales this year will be close to last year’s, but O’Brien thinks “flat is good.”

The association has been tracking tractor and combine sales since the early 1970s.