Ag tractor and combine unit sales in April 2022 declined for the second month in a row, owing largely to supply chain difficulties, according to the latest data from the Assn. of Equipment Manufacturers (AEM).
“Dealer inventories remain at very tight levels across the board as OEMs are having challenges keeping up with dealer orders due to global supply chain disruptions. However, dealer restocking is occurring, particularly in <40 horsepower tractors,” Stanley Elliot, analyst with Stifel, said in a note to investors.
“Pricing continues to accelerate (farm machinery PPI +14.0% year-over-year in March), but OEM input costs have recently trended higher, most notably in steel.”
Elliot added that strong crop prices, which have surged due to the Ukraine conflict, lean dealer inventory levels, large OEM backlogs, strong prices on used equipment and the ongoing replacement demand support Stifel’s view for strength in large ag equipment demand in 2022.”
U.S. total farm tractor sales fell 22.3% for the month of April compared to 2021, while U.S. combine sales for the month declined 5.6% to 459 units sold.
The 100+ horsepower 2WD segment was the only growth sector in the U.S. market for the second month in a row, up 3.2%, while mid-range tractors between 40 and 100 horsepower fell 19.5%. The sub-40 horsepower segment led losses, down 25%.
4WD tractors took a similar drop as their 2WD cousins, down 21.1%. Total U.S. farm tractor sales are now down 13.7% year-to-date, while combines are down 14.5% for the same.
In Canada, unit sales fell in all segments again for a 19% decline in total farm tractor sales, led by 4WD units once more, down 49.3%.
Total 2WD unit sales were down in every segment, leading to an overall 17.3% year-on-year unit sales loss.
Combine harvesters were down as well in Canada, falling 14.1% to 110 units sold. Year-to-date farm tractor unit sales are down a 7.7% in Canada, while harvesters are down 28%.