Farmers wanting to buy a new tractor or combine need deeper pockets and patience with delivery.
“Overall demand for farm equipment is projected to remain strong into 2023, despite rising interest rates and a weakening Canadian U.S. exchange rate,” says a report by senior economist Leigh Anderson of Farm Credit Canada.
Demand is buoyed by strong farm cash receipts, even with commodity prices softening from peak levels.
Farm equipment manufacturers are expected to increase the delivery of new equipment orders but inventory levels will remain below pre-pandemic levels and “could remain tight beyond 2024.”
Disruptions in supply chains by the pandemic have reduced equipment sitting in the lot.
Increased sales of higher horsepower tractors and combines are projected for 2023.
Sales of 100 horsepower plus tractors should increase 8.7 per cent, compared with a 4.4 per cent increase year to date.
Four-wheel drive tractor sales are estimated to increase 13.9 per cent with a 6.6 per cent decrease year to date.
Combine sales should be up 19.3 per cent compared with 2.9 per cent increase year to date.
Impacted by slower economic growth sales of smaller tractors, under 40 horsepower will decline fractionally while 40-100 horsepower unit sales will increase by less than one-half per cent.
All prices will increase from supply chain inflation and the Canadian dollar, which adds about one-third to the American price. Most tractors and combines are made in the U.S.
Should the dollar appreciate against the U.S. currency, prices may decline.
Canadian implement makers increased production 10 per cent in 2012, went up 22 per cent to the end of October and will increase output by 32 per cent next year.
Driven by new implement shortages prices of used equipment have increased. That market will stay robust into 2024.
Ron Walter can be reached at [email protected]