This issue of the LICA Legislative Landscape will include the second of many shared perspectives from some of LICA industry partners on their markets and challenges facing their sector.
How would you describe the ag equipment market year to date?
The ag equipment market has been surprisingly strong in 2020, despite significant headwinds. We started the year with optimism with early predications for some improvement in commodity markets due to signs of positive momentum in international trade and biofuels. Then came COVID-19, and like all industries, the ag equipment market was rocked with a major disruption right in front of the critical planting time. AEM was quick to work hard to place the ag equipment industry on the list of essential businesses, so our members and their dealer networks could continue to provide the equipment, parts and service needed to get the crop in the ground. After that quick rally, the ag equipment industry has been hard at work to minimize disruptions in the supply chain in the middle of a global pandemic.
Overall sales of new tractors and combines have been surprisingly strong from April through August. This is largely driven by smaller horsepower tractors bolstered by large suburban acreage owners sheltering in place; however, the row crop and utility tractor markets have held their own and combine harvesters continue to be strong year to date. We continue to be in a replacement market where tractors are purchased by farmers updating their equipment to remain efficient and to maximize uptime.
We also remain optimistic that the farm economy will again bounce back driving an even stronger ag equipment market for years to come. There is some very exciting technology and innovation entering the market that will make a real difference in the efficiency of US Agriculture.
The ag equipment market has been surprisingly strong in 2020, despite significant headwinds. We started the year with optimism with early predications for some improvement in commodity markets due to signs of positive momentum in international trade and biofuels. Then came COVID-19, and like all industries, the ag equipment market was rocked with a major disruption right in front of the critical planting time. AEM was quick to work hard to place the ag equipment industry on the list of essential businesses, so our members and their dealer networks could continue to provide the equipment, parts and service needed to get the crop in the ground. After that quick rally, the ag equipment industry has been hard at work to minimize disruptions in the supply chain in the middle of a global pandemic.
Overall sales of new tractors and combines have been surprisingly strong from April through August. This is largely driven by smaller horsepower tractors bolstered by large suburban acreage owners sheltering in place; however, the row crop and utility tractor markets have held their own and combine harvesters continue to be strong year to date. We continue to be in a replacement market where tractors are purchased by farmers updating their equipment to remain efficient and to maximize uptime.
We also remain optimistic that the farm economy will again bounce back driving an even stronger ag equipment market for years to come. There is some very exciting technology and innovation entering the market that will make a real difference in the efficiency of US Agriculture.
What are some of the biggest challenges ag equipment manufacturers are hearing from their customers?
It is no secret that the ag economy has had to shoulder more than its share of challenges in 2020. The economic situation on the farm is clearly the the largest challenge facing our members. There are some bright spots out there, but it is tough for farmers and the entire industry right now.
This year the most interesting challenge the equipment industry has faced has been figuring out how to continue to serve customers while ensuring everyone’s health and safety. Manufacturers, dealers, and farmers have been forced to find new ways of interacting. The silver lining is that the adoption of virtual tools at the farm level could lead to a shift in how farmers interact with their trusted advisor. This provides a tremendous opportunity for higher levels of more technical support at the farm gate from the best professionals in the industry – regardless of where they are physically located.
It is no secret that the ag economy has had to shoulder more than its share of challenges in 2020. The economic situation on the farm is clearly the the largest challenge facing our members. There are some bright spots out there, but it is tough for farmers and the entire industry right now.
This year the most interesting challenge the equipment industry has faced has been figuring out how to continue to serve customers while ensuring everyone’s health and safety. Manufacturers, dealers, and farmers have been forced to find new ways of interacting. The silver lining is that the adoption of virtual tools at the farm level could lead to a shift in how farmers interact with their trusted advisor. This provides a tremendous opportunity for higher levels of more technical support at the farm gate from the best professionals in the industry – regardless of where they are physically located.
From AEM's perspective for agriculture and forestry equipment manufacturers, what does Congress need to do before adjourning for the November elections?
AEM has a long list of priorities we aggressively advocate on behalf of the industries we serve. Most of these issues are quite large and really cannot be solved before the November recess. AEM’s recently announced Equipped to Vote initiatives is working to shine a light on the economic impact of the equipment sector so that our issues remain top of mind as elected officials and voters enter into the election season.
One specific of something that needs immediate attention by Congress to take a very serious look at the challenges facing agriculture and Rural America. As one big example, the digital connectivity gap in rural areas is on full display during this current pandemic. The virtual world many of us have come to rely on is simply not available in most parts of the nation where the economy is largely based on the agriculture and forestry industries. In addition, so much exciting technology that has the potential to dramatically improve the sustainability and efficiency picture of agriculture simply cannot be adopted without good, reliable, high-speed wireless internet connectivity in the field and forest.
AEM has a long list of priorities we aggressively advocate on behalf of the industries we serve. Most of these issues are quite large and really cannot be solved before the November recess. AEM’s recently announced Equipped to Vote initiatives is working to shine a light on the economic impact of the equipment sector so that our issues remain top of mind as elected officials and voters enter into the election season.
One specific of something that needs immediate attention by Congress to take a very serious look at the challenges facing agriculture and Rural America. As one big example, the digital connectivity gap in rural areas is on full display during this current pandemic. The virtual world many of us have come to rely on is simply not available in most parts of the nation where the economy is largely based on the agriculture and forestry industries. In addition, so much exciting technology that has the potential to dramatically improve the sustainability and efficiency picture of agriculture simply cannot be adopted without good, reliable, high-speed wireless internet connectivity in the field and forest.