October 21, 2014

Farm equipment sales hold steady despite drought

Despite the brutal drought, industry leaders say farm equipment sales are holding steady. Dennis Slater, president of the national Association of Equipment Manufacturers, says he’s hearing comparisons of the current drought to those in the 1980s, 1950s and even the Dust Bowl days of the 1930s.

“The effects of the drought have been devastating and we certainly understand that, but the one difference this time around versus other drought conditions is that farmers are in a good financial position,” Slater says. “The industry’s done very well. Even in the Great Recession, the industry’s done very well. That being the case, demand and need for equipment is still very high.”

The federal farm bill will expire the end of September and with all of the recesses and weekends, Congress only has 18 working days to come to an agreement on the key piece of legislation. Slater hopes the accord comes sooner, not later, for the farmers’ sake.

“Although they are financially in good shape right now facing this drought, they have that safety net there, with the insurance in the farm bill, but as you move forward, drought continues, that safety net could be up for grabs here and in danger if a new farm bill is not passed,” Slater says.

“The farmer has a situation then of uncertainty and that would have a dramatic impact on equipment sales.” Another important piece of legislation, the transportation construction bill, was treated much the same way, Slater says. It was passed a few weeks ago after lengthy debate.

“What should be a bipartisan bill, just like the farm bill, ended up turning into politics,” Slater says. “In the end, that market uncertainty and the damage to the economy that bill could have caused by not passing forced a compromise and a good bill coming forward. I see the same happening with the farm bill. Although there is a lot of jockeying for position right now, everybody recognizes the importance of a new farm bill.” He says swift passage of the farm bill is “the only way to ensure farms and ranches survive, protecting our food supply for years to come.”

The Association of Equipment Manufacturers, based in Milwaukee, Wisconsin, as an international trade group for the off-road equipment manufacturing industry.