With lower commodity prices, it’s no surprise that farmers aren’t snatching up the newest equipment quite as rapidly as they have for the past few years. While it’s not unexpected, this decline in equipment sales has had ripple effects across the ag industry.
Equipment manufacturer earnings are down this year, which has led to layoffs. This isn’t a great environment to launch new products, so there haven’t been quite as many product introductions. The used market is filled with late-model, low-hour equipment, causing prices to drop to decade lows. The major OEMs have introduced certified pre-owned programs to deal with this glut of equipment. Consolidation hasn’t been quite as prevalent in the equipment industry as it has been in the chemical and seed business, but there were some acquisitions.
In a nutshell, those were the big news topics in the machinery industry this year. Below are the specific articles from 2015 that told that story as it unfolded, plus some extra highlights.
1. Equipment Sales Down 5% to 10%
Farmers aren’t the only ones feeling the pinch of lower grain and oilseed prices. Deere, AGCO, and other large equipment manufacturers are seeing sales decline and profitability slip as farmers, in general, have less money to spend on new equipment.
2. Unprecedented Prices on Four-Wheel-Drive Tractors, Tracked Tractors, and Combines
You can grumble all you want about commodity prices. (And we agree – they suck!) But this year you can’t complain about the price of used equipment. If you bought a used four-wheel drive tractor, tracked tractor, or a combine, you most likely got it for a good price.
3. Decade-Low Prices Will Go Lower
What about next year? Are prices going to stay low? According to Dave Mowitz’s latest Machinery Insider report, the prices for grain carts, sprayers, planters, combines, and tracked tractors will go down between 2% to 8% next year. What about high-horsepower tractors? He’s predicting prices will plummet a whopping 15%.
4. More Companies Add Certified Pre-Owned Programs
All of the OEMs are jumping on the certified pre-owned (CPO) equipment bandwagon to help move the glut of used equipment sitting on dealers' lots. Claas led the CPO charge in 2012 when it introduced a reconditioning program for Lexion combines. John Deere followed up two years later. This year, AGCO, Case IH, New Holland, and Vermeer all rolled out CPO programs.
5. Precision Planting Adds Partners
In 2014, Precision Planting agreed to bring select Precision Planting technology to Case IH planters. This past year, Precision Planting further expanded its market share by adding another partnership with AGCO.
6. John Deere Buys Precision Planting
You know what happens next in the Precision Planting story. This November, John Deere announced it signed an agreement to buy Precision Planting and connect Deere equipment with the Climate FieldView platform. (For another perspective on this acquisition, see what Gregg Sauder, the founder of Precision Planting, thinks about the deal.) John Deere and Precision Planting will honor the long-term agreements already in place, meaning you can have factory installed Precision Planting parts on green, red, and White planters.
The Precision Planting announcement certainly made the most headlines in November, but it wasn’t the only company that Deere purchased. John Deere also signed an agreement to acquire Monosem, the European market leader in precision planters.
7. John Deere Introduces the 9RX
The John Deere 9RX wasn’t the only new product introduced this year, but it’s making this list because it was one of the most anticipated pieces of equipment. Since Case IH came out with the Quadtrac in 1996, farmers have wanted John Deere to offer a four-track tractor. The wait officially ended this year with the launch of the 9RX.