In part 1 of this series, we shared the 2019 WEDA Inventory Study findings of current comfort levels, dealership equipment turnover, number of used units in a series and, if new unit sales levels are sustainable.
In part 2, we will dig into historical sales of combines and 4WD’s, acres/combine usage, and Canadian/US ratios. Th is will lead to exposing the annual quantity of new combines and 4WD’s needed to replace retiring units.
A 2019 OEM’s study revealed the industry has 4.2x more farm machinery capacity than needed. This factor hovered at 3.7x for a number of years, but why the jump to 4.2x? Speculation on the increase is related to combines. Accelerated depreciation, increased capacity units, healthy farm incomes, and dealerships overselling are a few of the factors that increased customer equipment overcapacity from 3.7x to 4.2x. The sources for new unit data are flash reports from the Association of Equipment Manufacturers.
Western Equipment Dealer Magazine Spring 2020 Issue
By Trent Hummel