Farm Credit Canada’s (FCC) latest agriculture economics report says new farm equipment sales will decrease 7.1 per cent in 2016, but will recover in 2017.
The Projecting 2016-17 Farm Receipts and Equipment Sales report forecasts a seven per cent recovery in sales for 2017 thanks to expected strong cash receipts.
This outlook is rosier than the December FCC report that stated farm equipment sales could decrease five per cent in 2016, and a further 2.7 per cent decrease in 2017.
Total new farm equipment sales fell by 13.8 per cent in 2015 because of an uncertainty surrounding Canadian crop production, weaker commodity prices and a lower Canadian dollar leading to higher prices. But sales in 2014 were strong, with 23,860 units sold in Canada, the second highest number ever, trailing only 2008. Overall, new farm equipment sales increased 82 per cent from 1999 to 2014.
Sales started slow this year — down 19.5 per cent in the first three months of 2016 compared to 2015 — but should rebound, says the FCC.
According to the Association of Equipment Manufacturers, total farm tractor sales in January to June were 10,053 units, down 15.9 per cent from 11,952 at the same time last year. Tractor sales usually decrease month-to-month from May to August, before rebounding in October, the month most tractors in Canada are sold.