The U.S. Department of Agriculture is projecting farm incomes nationwide will drop this year to the lowest levels since 2002. Farm equipment dealers aren’t surprised.
Frank Serrano, the manager of the Great Plains Kubota in Edmond, told The Journal Record’s Brian Brus that construction equipment and mowers are selling well, but farmers aren’t buying tractors.
“We’ve been told the same thing that you hear everywhere else in the state right now,” Serrano said. “It’s mostly that everybody seems to be scared about oil prices. That seems to be driving everything right now.”
The Association of Equipment Manufacturers said sales of two-wheel-drive tractors in April were 15 to 16 percent lower than a year ago, depending on horsepower. Combine sales fell 45 percent.
“We certainly have seen some negative numbers and monthly fluctuations in some categories as markets remain uncertain,” AEM Vice President Charlie O’Brien said in a prepared statement. “However, today’s situation differs from earlier tight spots such as in the 1980s, when the capital structure of the ag market collapsed. … Today, the drop in commodity prices may, in the long run, be more of a market adjustment with production temporarily outrunning demand.”
Oil prices have been up over the last few weeks, and Serrano said that he started to see a little pick up last week.