The farm equipment market saw strong sales at the start of 2023 as inventory levels of new equipment rebounded and farmers recorded record-high cash receipts.
Farm Credit Canada's senior economist Leigh Anderson says record-high crop receipts in 2022 put farmers in a strong financial position to absorb the rising interest rates and equipment prices.
"So far, year to date for four wheel drive tractors, we're seeing it relatively strong still. A little bit on combines, as well and agricultural implements. The other categories a lot of them are see softer sales so far in 2023 and what we expect for the remainder of the year."
FCC’s chief economist J.P. Gervais says farm revenue is a main driver in equipment sales.
"Record-high crop receipts in 2022 and the first half of 2023 put many Canadian farmers in a strong financial position to absorb the rising interest rates and equipment prices. We saw more cash purchases. This year, the drought in western Canada has impacted overall production, reducing cash flow for some producers."
Anderson says going forward to 2024 it may be a tougher decision for farmers to make that purchase as he expects a lot will be really assessing their risks.
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