Amid slow nationwide sales of large farm equipment, local implement dealers are working with customers to provide financing options and encourage sales.
According to the Association of Equipment Manufacturers, U.S. sales of combines dropped 31% in June compared to the same month in 2023. Meanwhile, June sales of two-wheel-drive tractors dropped 16.3% compared to 2023, and sales of four-wheel-drive tractors fell 1.3%.
Mike “Buck” Budde, who works in sales with Roeder Implement in Dubuque, said the business has seen sales of farm equipment “drastically” decline in the past three to five months, but particularly since July.
Roeder sells new and used equipment, including lawn and garden care items but also larger equipment such as skid loaders, tractors and combines.
Budde said he thinks many farmers purchased equipment several years ago after receiving stimulus money as a result of the COVID-19 pandemic.
“There was so much extra spending, so we knew it was going to come to a halt at some point,” he said.
Tammy Brogley, owner of Scott Implement in Platteville, Wis., agreed.
“Right now, farmers are repairing what they have instead of purchasing new,” she said. “Inventory keeps piling up for all ag dealers.”
Information processing company Sandhills Global, which primarily serves the transportation, agriculture, aircraft and heavy machinery industries, reported in April that U.S. inventory levels of tractors with a horsepower of 300 and above had increased by about 107% year-over-year. Combine inventory also saw a 17.6% increase.
The drop in sales has led equipment manufacturers to cut jobs, citing rising costs and falling demand.
John Deere officials announced in July the layoff of 34 people at the Dubuque Works plant amid global reductions to its salaried staff. The month before, the company also announced plans to lay off about 100 Dubuque production employees effective Aug. 30.
In a May statement, John Deere projected a 20% to 25% decline in sales of large agricultural equipment from 2023 to 2024.
Elsewhere in Iowa, Williamsburg’s Kinze Manufacturing, which produces agricultural equipment such as planters and grain carts, last week announced a layoff of 193 employees.
Eric “Beeps” Lahey, co-owner and manager of CJ Beeps Equipment in Farley, Iowa, said sales of more expensive equipment have been particularly sluggish since May.
“Especially if (the equipment) is over $200,000, it seems like it’s really slowed up,” he said. “Interest rates aren’t really moving back down, so people who are in good positions with interest rates on used equipment are not looking to buy.”
Joseph Lensing is a farm management specialist with Iowa State University Extension and Outreach who currently is based in Black Hawk County but covers 12 Iowa counties, including Dubuque, Delaware and Clayton counties.
He said sticker prices on new farm equipment have “skyrocketed” due to inflation and new technology. While he expects those prices eventually to stabilize, he noted that other input costs for things such as fuel and fertilizer also are rising and commodity prices for crops are dropping, putting a strain on farmers’ pocketbooks.
“Farm equipment (purchases) is what’s pulled back because that’s the one that you have more flexibility on whether you get it or not,” he said. “Inputs are inputs, and you’ve got to do them every year, but as we’ve seen land prices and rent go up, coupled with corn and soybean (commodity prices) declining like they have over the last several months … that’s part of why machinery demand has gone down.”
In response to the slow sales, Budde said staff at Roeder have been working to develop attractive financing options for customers.
“We try to help them finance it a bit more and put just some money down ... or you work with the bank and do buydowns to make it a little more attractive,” he said.
Lahey said CJ Beeps has found a silver lining in that its repair shop has been busier, since customers are looking to fix their current equipment.
In general, however, he said the business is simply continuing to push through the slump.
“You wake up, you put your shoes on and you go and do it with a good attitude,” he said. “It’s hard to beat somebody that never gives up, whether it’s selling farm machinery or farming in general.”