Agricultural machinery manufacturers expect overall 2011 business to the U.S., Canada and worldwide to grow in the 6-to-7% range by year-end but then taper off 2012 through 2014, with exports sales anticipated to increase the most, according to the annual business "outlook" survey of the Association of Equipment Manufacturers (AEM).

Looking at combine and tractor sales for the U.S. and Canada, declines are mostly expected for combines; for 4-wheel-drive tractors, sales are expected to be stronger 2011 – 2012 and then decline; and among 2-wheel-drive tractors, business is predicted to grow the most overall for machines in the 40-100 HP range. For other types of equipment, while there is a wide range in response, demand is expected to remain in the plus column for most products 2011 through 2014.

The survey asked respondents to rank how several factors would influence sales. Commodity prices were cited as a key positive factor, as well as interest rates and increased export demand. Negative factors included the state of the general economy and steel prices.

Survey Summary

• For 2011, overall business in the United States is expected to grow 6.4% compared to the previous year; Canadian business is forecast to increase 7.6%; and industry business to the rest of the world is anticipated to gain 6.9%.
 
• U.S. agricultural machinery business is then predicted to grow 4.9% in 2012, 2.9 percent in 2013, and 2.8% in 2014.
 
• Canadian business overall is expected to be 4.8% higher in 2012, then increase 2.2% in 2013 and 1.7% in 2014.
 
• Industry business to the rest of the world is anticipated to gain 5.1% in 2012, 4.7% in 2013, and 4.6% in 2014.

"Agricultural equipment manufacturers overall fared very well in an otherwise struggling economy. Recent growth has been positive in most categories, and exports to emerging countries are rebounding. Strong commodity demand and prices have translated into equipment sales. Net farm income is expected to be up 28% in 2011, and net cash income to grow nearly 19 percent," stated Charlie O’Brien, AEM agriculture sector vice president.

A PDF of the full survey can be found at: http://www.aem.org/AllDocuments/AEM/MI/Reports/2012%20Ag%20Outlook.pdf