“Everyone in the equipment space is doing well with forecasts and sales right now,” says Curt Blades, AEM Senior Vice President of Agriculture Services & Forestry. “This boom has been bolstered by demand for small tractors and ag equipment.”
We’re particularly interested in how agriculture equipment brands will show up. Earlier, we covered the rosy Q1 forecasts in our ag marketing blog post about preparing for an equipment boom. Earlier the same quarter John Deere revised their 2021 forecast up 25% from the prior November. Survey results from a Q2 AEM survey were just as strong, with 76% of respondents reporting growth compared to the previous quarter and 87% compared to the previous year.
The positive outlook carried over to 2H; in July another equipment powerhouse, CNH Industrial, raised their forecast from 14-18% growth to 24-28% over the previous year, according to Reuters. In September, Farm Policy News anticipated net farm income increasing by 19.5 percent YOY to $113 billion in 2021.
With the highest projected farm incomes since 2013, farmers planned significant capital investments in Q3 and Q4, which means equipment brand marketers are flush with opportunity. The latest Farmer Speaks research study by Millennium Research and commissioned by J.L. Farmakis, Inc. confirmed that farmers in all categories (overall, 500-999 acres, 1000-1999 acres, and 2000+ acres) would not delay equipment acquisition, and 53 percent planned to acquire new equipment. Of those who planned to purchase capital equipment, half said they would purchase a combine, followed by “other,” tractor, grain truck, planter and sprayer.
Ag and equipment marketers are busy supporting the industry’s top brands amid this boom, but the current supply chain slowdown – caused in part by COVID-19 shutdowns and container and worker shortages – means they need to find creative solutions to balancing this positive outlook with logistical realities. These include recognizing the issues at hand, encouraging pre-orders for next year with current discounts, and focusing on tracking capabilities to heighten accuracy around timing and avoid miscommunication.
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A special thank you to our friend Curt Blades, AEM Senior Vice President of Agriculture Services & Forestry, who contributed to this post.