Ag Retail Sales: Large Ag Down Double Digits, Inventories Mixed

Large Ag unit retail sales were down 14.6% year/year, with declines in Row Crop and Combines more than offsetting a very slight increase in 4WDs. Combined US/Canada large Ag unit sales -14.6% year/year in May (-6.1% in May). By category, row crop -12.3%, 4WD tractors +0.8%, combines -28.7%. U.S. dealer inventories down 15.4% year/year in 2WD tractors, +61.1% in 4WD tractors, and down 17.9% in combines; inventories remain the key item to watch, we remain encouraged by early signs of progress particularly in Small Ag and Combines.

• US and Canada large tractor and combine unit retail sales were down 14.6% year/year in June (May -6.1%, April +12.8%, March -3.1%, February -7.9%, January -13.9%). US large ag sales were down 16.1% following a 6.7% decline in May; Canada sales fell 5.7% following a 3.3% decline in May.
  • US sales: row crop tractors -13.9%, 4WD tractors -1.3%, combines -31.0%.
  • Canada sales: row crop tractors -0.3%, 4WD tractors +10.6%, combines -20.8%
• 4WD tractor sales +0.8% year/year in June following +5.5% in May; June L3M sales +10.2% year/year vs. +8.0% in May.
  • US dealer inventories of 4WD tractors +61.1% year/year in May, the 19^th consecutive increase. On a days-sales basis, inventories up year/year in May to 65 (May 2023: 47) and up sequentially (April: 63), though remaining below pre-Covid days/sales. June typically a below-average month of the year for 4WD tractor sales, averaging 6.5% of annual sales the last five years.
• Row crop tractor sales -12.3% year/year in June following -8.1% in May; May L3M sales -3.6% vs. +1.6% in May.
  • US row crop tractor inventories +19.1% year/year in May. On a days-sales basis, inventories up year/year in May at 166 (May 2023: 139) and up sequentially (April: 157). June typically an average month of the year for row crop tractor sales, averaging 7.9% of annual sales the last five years.
• Combine sales -28.7% year/year in June following a 4.6% decline in May; June L3M sales -5.3% vs. -1.1% in May.
  • US combine inventories -17.9% year/year in May, the second consecutive decline. On a days-sales basis, inventories down year/year in May to 80 (May 2023: 83) though up sequentially (April: 69). June typically an average month of the year for combine sales, averaging 8.5% of annual sales the last five years.
• Mid-range tractor sales -11.6% year/year in June (May -12.0%, April -5.7%) while compact tractor sales were -19.3% year/year (May -11.9%, April -4.9%). June an above-average month for mid-range tractors (averaging 9.9% of annual sales) and compact tractors (averaging 11.1% of annual sales).