Tractor and combine sales for 2019 indicate an improvement over 2018 and the strength of the general economy will continue to power the smaller horsepower tractor sales.
Tractor and combine sales for 2018 showed a very good increase in nearly all categories and that growth will continue into 2019. Our models indicated growth above the normal replacement activity and that should provide for another good year ahead.
With new customers for our agricultural products coming into view in 2019 and the prospects of real progress in the dispute with China, there is reason to be optimistic about U.S. agriculture in the near future.
Our models consist of historic data models that track net farm income, net farm cash income, commodity prices, currency exchange rates, worldwide agricultural market data and other factors that influence the purchase of tractors and combines in the U.S.
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.
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.
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