Navigate the Ag Equipment Market with Tractor Zoom: Spring 2024 Sales Insights

As we track market trends this spring, we’re still seeing volatility in new equipment supply and which affects used valuations, and we are also witnessing opportunities for dealerships to strategically position themselves for success with the right solutions and insights across equipment categories. The information below is derived from AEM's April 2024 Ag Tractor and Combine Report U.S. Unit Retail Sales Report.

Compact and subcompact tractors continue to see a decline year over year. This is what a major imbalance in the value chain looks like. We are still witnessing the major correction from previous overproduction levels that took place late in the pandemic.

Compact and subcompact tractors have lost their footing. This segment is grappling with the lingering effects of pandemic-era overproduction, leading to a noticeable decline in sales year over year. The value chain imbalance is stark, highlighting the challenges of aligning production with actual market demand.

At the same time, larger ag tractors over 100HP are standing firm. These machines tend to be the most stable in the equipment market, reflected by a modest 7% sales increase. This uptick is likely more about filling the deficit rather than a genuine surge in demand, indicating that while this segment is stable, it is not necessarily booming.

But here’s the plot twist! Four-wheel-drive (4WD) tractors stole the show with a 24% year-over-year surge. One data point doesn’t make a trend, but it is good supporting evidence that the farm economy, while not booming, is also not crashing. The 4WD segment benefits from having been the hardest to over produce in recent years, avoiding the magnitude of supply issues other categories are facing right now.

However, combines are struggling. Despite a slight increase in April sales, year-to-date sales are still down 13%. This decline reflects what we are seeing in the used combine market, with farmers making calculated financial decisions in anticipation of much lower profitability in 2024. The over-supply challenges persist, making this segment less resilient than tractors.

April’s Association of Equipment Manufacturers new machinery sales data underscores the importance of a balanced value chain. The ag equipment market is navigating through a period of correction and stabilization, and while larger tractors and 4WD models show promise, the persistent issues with compact tractors and combines indicate the ongoing challenges.

It may be a challenging season ahead in 2024, yet, as larger tractors have shown us, there is buying potential. Understanding farmers’ needs and delivering even more value than ever before will be critical for success.

While the sales process over the past few years has resembled more of an order-taker than diligently building and maintaining relationships with farmers, the times have changed. What is our new normal is actually the old normal.

But, we have solutions now that we didn’t possess then. With a world-class CRM system that connects your inventory, business systems, and customers and puts that into the palm of your sales team, your dealership now has a resource that can help you not only survive a downturn in the ag economy, but actually grow market share.

Just as we’ve broken down in this blog, understanding the market trends across equipment categories is crucial. Real-time values and equipment comparables help dealerships be agile on their repricing strategy, ensuring they have the most competitive list prices for improving their equipment turns.

Overall this Spring, the big-picture lesson is clear: The ag equipment market must adapt to the changing dynamics and strive for a balanced, responsive value chain to weather the uncertainties ahead.