2018 has been the year of not only a base-building, but has shown some real strength in the larger tractor categories and in combines. 2019 is not going to be a year of dynamic growth in the markets but it is going to be one that will have growth equal to 2018, or better.
As civilizations became more industrialized and populations moved to cities, the need for a large scale storage and transportation infrastructure became necessary to feed the growing urban populations. This motivated the development of the modern storage and logistics technologies that are prevalent in today's agricultural industries from farm to fork.
The Federal Reserve Board released most recent edition of its Beige Book on Oct. 24. The report contains observations on the economic situation for each of the 12 Federal Reserve Districts with several of the districts including commentary on agriculture within their areas.
The limited cash available to farmers and ranchers in the U.S. will continue to put a dampener on the equipment markets in 2018 and 2019. The expanded depreciation programs that appeared in 2010 and reached its zenith in 2014 had the effect of pulling ahead purchases from future years. We are now enduring the results of that program.
Steel and aluminum prices will most certainly result in an increase in all farm equipment prices next year but our agricultural economy has been able to overcome those increases in the past and will most likely do so in the future.
The uncertainty that accompanied the current tariff disputes has produced a black cloud over future tractor and equipment sales. In spite of those concerns we continue to see some strength in the larger tractor categories and in combines this year.
The unknown resulting from the current trade negotiations have had a major impact on the positive feelings that existed just a few months ago. Farmers and ranchers are facing reduced incomes coupled with rising interest rates for their necessary operating capital and that does not produce a bright, cheery outlook.
Our industry is navigating some very choppy waters as international trade negotiations continue. Uncertainty has created caution in farmers’ spending recently and most likely will continue until there is some resolution to the trade talks now underway.
China’s need for agricultural imports remains significant since they are faced with providing food for nearly one-third of the world’s population. The past decade has produced a growing middle class in China that has demonstrated an increased demand for not only basic foods, but also for high quality products that are only available from other parts of the world.
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In this episode of On the Record, brought to you by Associated Equipment Distributors, we take an initial look at the Dealer Business Outlook & Trends Report and what dealers are forecasting for 2025.