MILWAUKEE, Wis. – Farm equipment sales were solid to end 2020, and 2021 has started with double-digit increases for tractors and self-propelled combines, according to first quarter numbers from the Association of Equipment Manufacturers (AEM).

Last year, total farm tractor sales were up 17.9 percent over 2019; combines increased 5.5 percent, AEM reported. For the first quarter of 2021, purchases of two-wheel-drive tractors under 40 HP were up 64.3 percent over the same period in 2020. Two-wheel-drive tractors of 40-100 HP were up 35.7 percent and those with 100 HP or more increased 18.2 percent. Four-wheel-drive tractors rose 10.3 percent while combines were up 16.5 percent.

“There’s a general optimism in the farm community right now,” explained Curt Blades, AEM senior vice president of agricultural services. “Commodity prices are really good. The uncertainty in trade and biofuels is waning. There are indications the ag economy will be strong for the next couple of years. Farmers feel confident enough to invest in capital. For a farmer to invest in heavy duty equipment, that shows they are optimistic about the next five years or so.”

People buying smaller tractors have some acreage or are suburban landowners, he noted. “Last year during the pandemic, anything to do with a home has done well. The small tractor market has been on fire for the past 12 months. A 64-percent increase is pretty good. I’m not going to lie – we love it.”

Kim Rominger, president and CEO of the Equipment Dealers Association, said last year was remarkably good and the first quarter of 2021 has been “absolutely fantastic. We’re ahead of last year. People are out, ready to go back to work. Yields have gone up. Farmers had the money, even last year, to upgrade equipment. Maybe they did just one or two pieces of equipment. Now they’re coming back for something else. They held onto their equipment a little longer and now they’re ready to upgrade. They also want the new technologies. Overall, the dealers are set up to have a fantastic year if they can get the equipment.”

The ability of manufacturers to get equipment to dealers has been a problem, Blades and Rominger said. The industry – like many others – is dealing with supply chain issues.

“The entire supply chain of manufacturing has major disruptions,” Blades pointed out. “You drive by a car lot and there aren’t many cars. You go into an electronics store and inventory is low. There’s a global shortage of semiconductors. There’s a global shortage of shipping containers, of steel, of transportation. Some of that is because of, and despite, the pandemic. Because equipment manufacturing was deemed essential, plants were able to stay open during this critical production time.

“It’s kind of a perfect storm. The supply chain issues, coupled with demand being through the roof, have led to a very tight supply (of equipment).”

Blades said a priority for manufacturers is to make parts available for farmers to get through the planting season.

Dealers are concerned about running out of equipment and not being able to get resupplied, stated Rominger, also executive vice president and CEO of the United Equipment Dealers Association.

“Dealers see a huge year in front of them but they’re running out of equipment,” he noted. “Or they’re running out of parts. People have been holding on to older equipment and now need repairs and parts.

“The supply chain is having a hiccup. Components are made around the world. If you can’t get all the parts, you need you can’t finish a piece of equipment. Manufacturers weren’t working that far ahead to begin with. They just can’t snap their fingers and have the equipment there. I know everybody’s doing what they can do.”

Used equipment is also tight on dealer lots, Rominger said. “Dealer inventories – new and used – are low right now. Dealers are looking to replace inventory. It’ll be interesting to see how they do it.”

Blades said he sees the rest of the year continuing on the path it’s on. “I’m optimistic because farmers are optimistic. Small equipment is very solid; it will probably find a level at some point. The ag economy is looking solid for the next several years.”