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AEM watching for signs of increased confidence in the ag economy

The senior vice president with the Association of Equipment Manufacturers says the industry is closely watching for signs of increased confidence in the ag economy.

Curt Blades says equipment dealer inventories are key.

“It’s in the best interest of rural America for those dealer lots to not be too full.”  He says, “Too much inventory on a dealer lot, all of a sudden, they’re in a bad financial space and that has a devaluation effect on the used fleet that a farmer might have. It also does end up being a little bit of a leading indicator of where manufacturers assume that the market is going.”

He tells Brownfield that insights from AEM members show most farmers are holding off on major purchases.

“Folks were most interested in lower ticket items, things that they could pay cash for.”  He says, “It would sort of match that some of those considered purchases are coming a little bit slower.”

Blades says many producers utilized higher commodity prices earlier this decade to update their equipment, so fleet age may not yet be a concern.

“During the pandemic, we had a pretty fast upgrade of the fleet that’s out there, especially in the small horsepower tractors.”  He says, “We’re not quite in a replacement market yet, so as that fleet gets just a little bit older, you start to see more purchases.”

He says retrofits and upgrades to already owned machinery are expected to continue to be attractive options for farmers as economic uncertainty continues to plague agriculture.

AUDIO: Curt Blades – AEM