Industry Sales Data Reconfirms U.S. Farm Equipment Woes

U.S. sales of high-horsepower combines and tractors, the revenue heart of large farm equipment manufacturers, fell even more during the first half of this year than most industry observers and analysts had expected, data recently released by the Equipment Manufacturers Institute (EMI) reveals. Industry sales of self-propelled combines during the first six months of the year fell 47.5%, EMI said. Sales of tractors with horsepower exceeding 100 fell 35.4%, and 4-wheel drive tractor sales dropped 30.9%. At the first of the year, most farm equipment analysts and industry sales representatives had anticipated a sales dip of 20%-30% for all of 1999. Some manufacturers revised their sales estimate downward in subsequent earnings reports. As recently as May, Deere & Co., the world's largest agricultural equipment producer, said demand for farm equipment in North America would drop 25%-30% this year. Retail inventories remain clogged, said Barry Bannister, an analyst with Legg Mason. That is severely dragging down wholesale sales at the manufacturing level. "The numbers are worse than we expected," he said. "While retail price discipline has been maintained, farmers just aren't buying."

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