According to Farm Credit Canad, the farm equipment market will remain strong in 2023. The country's largest ag lender released its 2023 Outlook for the Farm Equipment Market.
FCC's Chief Economist JP Gervais says several factors contribute to their predictions, and farm revenue is the first thing they look at.
"Gross revenues are going to be good, positive in 2022, and the Outlook for 2023 is positive as well. We've got commodity prices at much higher than a five-year average, they're also in some cases higher than last year's. We think that from a revenue standpoint things are going to be ok and positive, and so that drives the demand for equipment, it drives a number of different things that happen at the farm level."
However, Gervais says there are factors that could negatively affect the market.
"We're looking, as well, at a year where we're going to see inflationary efforts on farm inputs, and that's going to put a little bit of pressure on profit margins, so that might lead farm businesses to look at different things in terms of investment. Those are the two things that I'd be looking at first and foremost, farm revenues and commodity prices, versus the inflationary pressures of farm inputs."
Factors like interest rates and how the supply chain rebounds from last year need to be accounted for as well says, Gervais. Don Tarrant from Reit Syd Equipment in Dauphin says there will be much better availability this year.
Tarrant says that while Canadian manufacturers were able to supply to normal levels in 2022, they've reduced promised orders but up to 50% this year to ensure units are delivered on time, and not after the use season.
"Tractors availability will be much improved and on time in 2023, and Combine availability will be similar to 2022, the improvement is that combines will arrive on promised dates unlike 2022 late arrivals."
