AKRON — Farm tire sales are expected to experience moderate growth this year, despite a struggling agricultural market where farm income shrunk last year.
The ag replacement and OE tire market fared well in 2018, according to David Graden, operational marketing manager – agriculture, Michelin North America.
"In the replacement market, we are still expecting growth. Previews of 2019 give us a positive outlook. At this time, corn prices look like they will improve and level off. Farmer income will remain low, but this usually has a positive impact on replacement market," Mr. Graden said. "For OE, we expect continual growth throughout 2019. At this time, we are expecting greater growth than we will see in the replacement market, despite some of the major issues impacting the ag market."
The agriculture tire market showed some signs of growth in 2018 but was on "shaky ground" leading into 2019, according to James Crouch, national product manager, agriculture, Alliance Tire Americas Inc. (ATA).
"The aftermarket was tight, but we are starting to see life in the used tractor market and some large row crop equipment that was purchased during the boom of 2010-2012 is starting to come due for replacement tires," Mr. Crouch said.
"Low but steady commodity prices and concerns on global market access for crop sales has the professional farmer conservative on spending unnecessary money. The OE market started to show signs of life but mostly in smaller compact utility equipment. This CU customer seems to be disconnected from the concerns that keep the professional farmer from purchasing new equipment."
ATA expects a slightly positive year ahead for both the OE tire market and the aftermarket.
"Although commodity prices will likely remain flat, people are still at a point of needing replacement tires and some new equipment," Mr. Crouch said.
Dave Paulk, manager of field technical services, agriculture, for BKT USA Inc., expects the farm replacement tire market to be flat or slightly up in 2019.
"We would expect it to be flat or slightly down for OE based on production of new equipment, which is growing at a low rate. Generally, when OE sales are down, replacement is up," he said.
2018 was a strong year for ag tractor and combine sales in the U.S., according to the Association of Equipment Manufacturers' (AEM) market data.
"2018 was a solid year for equipment sales despite a weak overall farm economy and lingering trade issues," said Curt Blades, AEM senior vice president of agriculture. "As we look at 2019, we're still seeing a lot of uncertainty related to the Administration's efforts to reset global trade parameters. We're also watching some uncertainty with stock market ups and downs, which could indicate a potential slowing economy. As a whole, we remain optimistic that the replacement market for large equipment will continue through 2019, and that the small tractor market will continue to be a bright spot on overall sales numbers."
According to AEM's latest report of U.S. December 2018 year-to-date sales:
- Self-propelled combines jumped more than 18 percent;
- 4-wheel-drive tractors increased nearly 13 percent;
- 2-wheel-drive tractors climbed 6.8 percent;
- Under-40 HP tractors grew 9.2 percent;
- 40-100 HP tractor sales edged up 1.5 percent; and
- 100-plus HP tractors rose 5.5 percent.
Meanwhile, Canadian retail sales of tractors and combines saw less consistent results in 2018. December year-to-date sales of all farm tractors edged up 1.7 percent, but year-to-date sales of 4-wheel-drive tractors fell more than 13 percent; self-propelled combines dropped 4 percent; and 40-100 HP tractor sales declined by a little more than 3 percent.