Agricultural bankers in 10 states in the Midwest and Plains expect a 15-percent decline in farm equipment sales this year, says a survey by Creighton University, in Omaha. “Farmers have become very cautious regarding equipment buying, even though their purchases of seeds and other inputs have remained solid,” said economics professor Ernie Goss, who questions bankers as part of his Rural Mainstreet Index.
In a Creighton release, Goss said “demand for farmland remains weak, pulling agricultural land prices down by an estimated annualized rate of 6 percent to 8 percent.” Bankers from Colorado, Illinois, Iowa, Kansas, Minnesota, Missouri, Nebraska, North Dakota, South Dakota and Wyoming were contacted for the survey.
Over the past few years, farmers have concentrated purchases of major equipment, such as tractors, combines and heavy trucks in the final months of the year and especially during December, says farmdoc daily. “Some of the reasons for this increase are higher farm incomes and increasing of the expense election to $500,000 for every year since 2010. The higher expense election has allowed capital purchases to be utilized at the year-end to help farmers optimize their income tax liability,” says the item, based on analysis of records provided by Illinois farmers.