Tractor sales in Ireland may have gotten off to a good start with a 15% increase over sales for January last year, but on the other side of the Atlantic, the picture isn’t quite so rosy.
The Association of Equipment Manufactures (AEM) has published total tractor sales in North America, and these suffered a 14.2% decrease in January while, just the other side of the border, sales were 7% up on last year in Canada.
Mixed messages
On the face of it, these figures may suggest that US farming is facing a crisis, but a closer look at the figures shows it was the smaller tractors which took the brunt of the decline, especially those of under 40hp, a segment which makes up 64% of the market.
Within this sector, there was a 23% reduction in sales while the next segment, 41-100hp, showed only a 7% decline.
It was a completely different story for tractors of 101hp or more; here the sales showed a healthy 23% increase, amounting to 4,058 units, out of a total of 16,174.
This indicates that the tractor market in the US is far different to that of Ireland where average power lies around the 120hp mark.
Tractor sales and farm size
One clue as to why this may be the case is that of the two million farms in the the US, 89% are classed as small farms with an average gross farm income of less than $350,000.
Although the average farm size is 445ac, this latter figure includes all the large prairie farms that we immediately associate with the mid-west.
Smaller holdings are also far more likely to depend on off-farm income and with there being mixed signals on the wealth and income of American households during 2022, the explanation for the decline in expenditure on tractors may not be too hard to find.
In essence, the figures for the US indicate that the larger, commercial farms are enjoying a resurgence and are out buying tractors again while the smaller, part-time holding of the type that makes up the majority of farms by number, is constrained by total household income rather than the performance of the farming business.
