It’s no secret that many farm equipment dealers are forecasting a slowdown in sales of large ag machinery in the coming year, to correlate with slipping commodity prices.
The same can’t be said for precision farming products, at least according to dealers who participated in the 2015 Dealer Business Outlook & Trends Farm Equipment Forecast from Ag Equipment Intelligence, one of our sister publications.
Now in its tenth year, the recently released survey takes a comprehensive look at the confidence and concerns farm equipment dealers have about the current and future market.
For the most part, dealers have a positive outlook for sales of GPS technology in 2015, and most I’ve talked with personally this year, say precision farming presents some of the stronger sales growth opportunities through expanded service offerings, water management technology or unmanned aerial vehicles.
But just how much growth do dealers anticipate in the coming year? The AEI report reveals some interesting year-over-year differences on the pace of precision prosperity expected in 2015.
A smaller percentage of dealers for four mainline equipment suppliers, along with independent equipment dealers, forecast precision growth of at least 2% next year, compared to 2014.
John Deere dealers anticipate the highest decline with 48.9% forecasting unit sales of precision products to increase at least 2% in the coming year, vs. 71.4% a year ago. Independent dealers followed with a 21.5% drop (28.6% in 2014, vs. 7.1% in 2015), then New Holland with a 19.3% decrease (40.9% in 2014, vs. 21.6% in 2015) and Case IH, with an 18.2% drop (55.9% in 2014, vs. 37.7% in 2015).
AGCO has the smallest decline of only 2.4% (52.4% in 2014, vs. 50% in 2015).
So does this outlook signal a slowing trend in precision farming sales? This seems unlikely, given the lush sales landscape of the precision market the last several years. It’s hard to imagine there will be a dramatic drop-off in adoption and customer demand, especially as farmers look for more efficient ways to increase production.
And even though dealers foresee slower precision sales growth in the coming year, the increases still outpace estimates for the majority of other ag equipment, according to the survey.
To paraphrase the thoughts of one dealer I spoke with recently, precision farming is still one of the safest bets for dealers to grow their business, but money isn’t going to just walk through the door like it has in the past.