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Farmers Likely to Hold Back on New Equipment Purchases – For Now

New farm equipment sales in Canada are projected to be softer into 2024, as higher interest rates, elevated equipment prices and a decline in commodity prices impact purchasing decisions, according to a Farm Credit Canada analysis.

Inflationary price pressures remain persistent despite recent economic weakness, meaning interest rates will likely stay higher for longer, which may alter equipment replacement cycles, the analysis said. That has impacted farm equipment sale trends as producers have delayed purchase decisions until interest rates stabilize or fall. As replacement cycles lengthen, sales will slow, and inventory levels will increase.  

However, the analysis warned a major trend is the age of the equipment fleet. The strong sales during the 2008 – 2014 period are early indications that the 4WD tractor, 100+ HP tractor and combine fleet is starting to age when looking at the rolling average of five-year sales relative to 10-years on new equipment to estimate the replacement cycle age. 

While replacement cycles can be altered, and older equipment can be serviced and overhauled, a slowdown in new equipment sales could be short-lived, the analysis said, adding sales could improve in the second half of 2024 and beyond if interest rates decline and producers move to upgrade their aging fleet.  

“One factor producers must also balance in their decision-making is the additional repair costs of older equipment and efficiency gains in newer models,” the analysis said. 

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How women saved agricultural economics and other ideas for why diversity matters | Jill J. McCluskey

Video: How women saved agricultural economics and other ideas for why diversity matters | Jill J. McCluskey

Dr. Jill J. McCluskey, Regents Professor at Washington State University and Director of the School of Economic Science

Dr. McCluskey documents that women entered agricultural economics in significant numbers starting in the 1980s, and their ranks have increased over time. She argues that women have increased the relevance in the field of agricultural economics through their diverse interests, perspectives, and experiences. In their research, women have expanded the field's treatment of non-traditional topics such as food safety and nutrition and environmental and natural resource economics. In this sense, women saved the Agricultural Economics profession from a future as a specialty narrowly focused on agricultural production and markets. McCluskey will go on to discuss some of her own story and how it has shaped some of her thinking and research. She will present her research on dual-career couples in academia, promotional achievement of women in both Economics and Agricultural Economics, and work-life support programs.

The Daryl F. Kraft Lecture is arranged by the Department of Agribusiness and Agricultural Economics, with the support of the Solomon Sinclair Farm Management Institute, and in cooperation with the Faculty of Agricultural and Food Sciences.