Understanding The Fall

I’m Susan Allen today you will hear Leif Magnusson, President of CLAAS Global Sales Americas and the 2016 Chair of the Association of Equipment Manufacturers. He spoke recently to agri-pulse about how the cyclical downturn in net farm income has created a dramatic fall in US farm equipment sales.

 

Magnusson : If we look at farm income from 2013 we have cut that in half in this two to three year period. Obviously I with the commodity prices we are seeing now it’s also a stress on the cash s flow for the farmers and we are seeing continual pressure on the commodity prices because I think that most places around North America we are expecting a good crop and a good harvest and as we also know there is still a large carry over inventory of grains that is probably higher than we would like to see it. So it will most likely stay challenging for the foreseeable future.

He said some areas have weathered this downturn better than the mid-west.

Now regionally we can see some differences. If I look at areas like western Canada where you see more small grain grown those farmers up there are actually quite positive today, there are some reasons for that even the small grain prices are going down, but there has also been a movement in the Canadian dollar yes their equipment that they buy is also more expensive today.But there are also some other upsides on the grain prices.