Farmers are sometimes criticized for driving “shiny new tractors,” presumably because they make too much money and don’t really need them.
Well, don’t believe any of that, especially not this year.
Leading into 2019, our nation’s farmers had a terrible year. Statistics Canada reported back in the spring that their realized net farm income for 2018 fell a dramatic 45 per cent from 2017.
That made it the biggest year-over-year drop since 2006. By comparison, the drop was 2.8 per cent between 2016 and 2017.
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Now, more than a third of the Canada-wide decrease stemmed from a 68 per cent decline in Alberta alone. As well, crop prices fell throughout the country and around the world as U.S. President Donald Trump started a trade war to protect U.S. farmers but ended up alienating them instead.
Other factors arose too that hammered farmers, who like everyone else, are victims of the cost of living.
For example, almost every expense farmers incur in their line of work went up last year. That includes interest expenses, which were up nearly 20 per cent, eight per cent more for cash wages they paid to employees (when they could find them) and machinery fuel expenses, up 18 per cent.
So, if your income took this kind of beating, would you be in the market for anything shiny and new?
Not likely. Same with farmers. On years when their income is cut short, they manage with what they have, for as long as they can.
And according to sales figures from the Association of Equipment Manufacturers (AEM), that’s what they’re doing.
Year-to-date, total tractor sales in Canada are down 4.4 per cent. Sales of self-propelled combines have decreased nearly 28 per cent. In July, when farmers are starting to think about harvest and the equipment that supports it, you might expect sales to inch higher. But that wasn’t the case. Two-wheel drive tractor sales were off about 12 per cent, four-wheel drive tractor sales were down 32 per cent and self-propelled combine sales fell nearly 44 per cent.
Curt Blades, AEM senior vice-president of ag services, says he’s hearing real concerns about the overall ag economy.
“As farmers begin the delayed harvest season, weather uncertainty and outstanding trade negotiations are weighing heavily on their minds,” he says. “We remain hopeful, however, that ratification of the [U.S.-Mexico-Canada trade deal] will help alleviate some of the uncertainty surrounding the ag market.”
I don’t have a problem with farmers owning or driving big equipment. True, it ties up some roads a few days of the year for planting or harvest, but some farmers need big equipment to be efficient, to get their work done in less time and with fewer hands. They are struggling to find workers, just like most other industries that count on manual labour. So they turn to increased mechanization to compensate.
It’s odd to think that big equipment is helping keep costs to consumers down because it makes farmers more efficient, but it’s true. And that scenario is unlikely to change unless a renaissance movement emerges that values manual labour.
So don’t get bent out of shape this fall if you see a new combine or tractor in the field, as unlikely as that may be this year, a year of many challenges. Odds are the farmer operating it is making payments on it just like the rest of us make payments on our vehicles, going through similar struggles to make ends meet … and understandably, wondering why federal hopefuls hardly mentioned agriculture on the campaign trail.