Despite a weak ag economy, 2018 was a good year for farm equipment sales, a big deal in Iowa where John Deere is the state’s largest manufacturing employer.
A report shows tractor sales in the U.S. rose 7% from the previous year, while combine sales jumped 18%. Curt Blades, with the Association of Equipment Manufacturers, mainly credits farmers replacing old equipment.
“You may’ve had a farmer that was typically on a three- or four-year replacement cycle who made the decision to stretch that out to four years or five years,” Blades says. “At some point, they just simply need to replace some equipment. That’s what we have found has been driving the market really for the last 18 months.”
Blades says 2018 started strong thanks to federal tax reform and a strong U.S. economy helped all year, but then came the trade war with China and other drags on the farm economy. “If we’re talking about a farmer making a half-million dollar investment,” he says, “they’ve gotta’ feel good about the economy and they’ve got to feel like it’s something they want to do.”
Despite tariffs and the trade war, Blades expects farm income will go up a little this year. He also likes the new Farm Bill, but worries the partial federal government shutdown will delay its implementation.
(Thanks to Herb Trix, WVIK, Rock Island)