Farmers at the National Farm Machinery Show in the US were looking at equipment, but buying may be a different story.
“We have a lot of good equipment,” said Indiana farmer John Cheesewright. “We’ll just add another year on it.”
That’s partly due to volatility in the markets, cheaper commodities and decreased net farm income.
“Some indicators are down from previous years. Interest rates are up in some areas. They already made most decisions of what they’re going to do for 2016.
They’re hoping now to find out from the manufacturers what the trends are so they can plan for 2017 and 2018,” said Rip Rippetoe, president and CEO of the Kentucky State Fair board.
“We are below our cost of production right now,” Mr Cheesewright said. “This is going to be a tough year, I’m afraid.”
The equipment business is feeling similar pressure.
“The larger equipment will see a softer market. We are down 50% compared to the two years relative to what the market and the number of four-wheel tractors that were sold. Looking at commodity prices, some of our members are saying we pretty much bottomed out,” said Charlie O’Brien, senior vice president at the Association of Equipment Manufacturers.
“When you look at 2016, some of our members are saying we pretty much bottomed out. The year 2016 should be flat. We look at 2017 to be a better year. Some are saying 2017 and 2018, the reality is how good the commodity prices are.”