National sales in tractors and other farm equipment have dropped alongside the economy in recent months, but local sales managers had mixed observations regarding the current state of the tractor market in El Campo.
Data showing a national decline in tractor sales is a better representation of the market for corn, particularly in the Midwest, which has a slower tractor market, Burrow said.
Burrow’s observations could be reflected in Deere & Company layoffs scheduled for November in plants in Iowa and Illinois. These states are a part of the U.S. corn belt, which suffered from extreme rain this year, according to the Washington Post.
Deere & Company plans to lay off 160 workers in these states due to decreased customer demand and market conditions, according to Associated Press. Other Deere plants do not have scheduled layoffs.
Sales Manager for Hlavinka Equipment Company Colin had a different opinion on El Campo’s local market.
The local, state and national economies for tractor sales are “probably slightly lower than normal, but as to be expected with commodity prices in the last couple of years of on farm revenue,” Hlavinka said.
Compared to figures from April of this year, U.S. farm tractor and combine sales have dropped by about 18,000 units as of September, but have increased slightly since July, according to a report from the Association of Equipment Manufacturers.
Last September, farm tractor sales were 19 percent lower and combine sales were 12 percent lower than this year, according to the AEM.
The decrease in the U.S. agriculture economy during the last few months is likely due to poor weather conditions and the trade disputes with China, according to Texasfarmbureau.org.
Effects of the trade tensions rippled across the nation. The conflict induced a surplus in the U.S. cotton market, yanking down the price, El Campo farmer AJ Kresta said.
Cotton yields were low this year, and the price fell by about 15 percent compared to last year.
The state of the market makes a big difference on what farmers are willing to spend on new equipment, Kresta said, adding he was not surprised by decreased tractor sales.
“It’s hard to buy new equipment when you’re not selling cotton,” Kresta said.
While factors such as adverse weather and trade tensions with China play into the economic spectrum, a large part of the current trend for tractor sales is due to the price of tractors, Hlavinka said.
“Each year tractors get more efficient and more expensive, and it is a larger financial investment in the longer term to make,” Hlavinka said.
Hlavinka believes tractor sales will improve, but not within the next couple of months.
Kresta saw next year being an improvement for farming in El Campo.
“If I didn’t believe next year will be better, I wouldn’t be doing this,” Kresta said. “Farmers are eternal optimists.”