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Key Takeaways
- Most companies report strong demand trends and a positive outlook for the rest of 2021 and into 2022.
- Rising costs of raw materials like steel and copper are expected to increase manufacturing expenses, leading to higher equipment prices.
- Supply chain constraints remain an issue, especially with semiconductors, which could lead to product shortages or reduced production.
Demand for North American farm equipment is robust, driven by rising commodity prices. Some manufacturers have order books that extend well into 2022.
Manufacturers are dealing with increasing input costs due to higher prices for steel, copper, and other commodities. This is likely to result in higher machinery costs in the coming quarters as these costs are passed on to buyers.
Company Outlooks
| Company | Outlook | Date |
| Toro | Neutral | 9/2/2021 |
| Titan Machinery | Positive | 8/26/2021 |
| John Deere | Positive | 8/20/2021 |
| Cervus Equipment | Positive | 8/16/2021 |
| Linamar | Positive | 8/11/2021 |
| Kubota | Positive | 8/3/2021 |
| CNH Industrial | Positive | 7/30/2021 |
| AGCO | Positive | 7/29/2021 |
| Polaris | Positive | 7/21/2021 |
| Valmont | Positive | 7/21/2021 |
| Lindsay | Positive | 7/1/2021 |
Toro
"We saw strong sales across both our professional and residential segments throughout the quarter," said Richard M. Olson, Chairman and CEO of Toro. "Our team and channel partners showed great resilience in navigating global supply chain challenges."
"The professional segment delivered double-digit net sales growth for the second quarter in a row, supported by strength in landscape contractor and golf markets, increased pre-season shipments of BOSS snow and ice management products, and growing demand for rental and specialty construction equipment. The residential segment also saw double-digit growth, driven by increased retail demand for zero-turn and walk power mowers. Customers are excited about our new battery-powered offerings and the continued investment in technology."
"As we enter the final quarter of the fiscal year, we expect continued strong demand for our innovative products and are confident in the benefits from our productivity initiatives. We are managing expenses prudently in what looks like a challenging supply chain, inflation, and labor environment next year."
"We continue to see strong demand in the landscape and golf markets worldwide, along with high pre-season shipments of snow and ice management products, and strong demand for rental and specialty construction equipment."
View Toro dealersTitan Machinery
"Equipment demand momentum continued through our second fiscal quarter, with equipment revenues up 35% compared to the previous year," said David Meyer, Chairman and CEO of Titan Machinery. "This is supported by our healthy inventory position and strong demand, along with continued strength in our parts and service business."
"Our Agriculture business performed exceptionally well, as high commodity prices helped offset drought conditions in some areas of our footprint."
"The farm equipment market is very healthy due to ongoing high commodity prices. This has led to strong financial performance in Q2, continuing from Q1."
"Despite supply-side challenges and drought conditions in some markets, demand for new and used equipment remains very strong. Existing equipment fleets are not only requiring repairs but are also being upgraded to newer models. Additionally, Section 179 tax deductions are helping customers offset higher net farm incomes."
"We have customer commitments for the majority of our new machinery orders to be shipped in Q3 and Q4 of FY 2022, and we're also securing pre-sell orders for production slots into the first half of FY 2023. There's currently a very strong demand for used equipment, reflected in improved inventory turns and margins. The latest USDA WASDE report was bullish for commodity prices, giving us more confidence in our full-year fiscal 2022 projections."
View Titan Machinery dealersJohn Deere
"Our strong results, driven by almost all product categories, reflect the hard work of our employees and dealers in keeping factories running and serving customers despite significant supply-chain pressures," said John C. May, Chairman and CEO.
"Looking ahead, we expect demand for farm and construction equipment to continue benefiting from favorable fundamentals."
"In the U.S. and Canada, we anticipate industry sales of large Ag (high horsepower tractors and combines) equipment to be up about 25% this year, reflecting improved fundamentals in the Ag sector. We expect to produce in line with retail demand, keeping inventory levels relatively tight heading into Fiscal Year 2022," said Brent Norwood, Manager of Investor Communications.
"For small Ag & Turf (utility tractors, lawn and garden), we expect industry sales in the U.S. and Canada to be up about 10%. While our shipment schedules imply production roughly in line with retail demand, our net sales for small Ag & Turf products are higher than the year-over-year change in retail sales as activity recovers from underproduction in 2020."
"In Europe, the industry forecast is between 10% to 15% growth, driven by higher commodity prices strengthening business conditions in the arable segment, and resilient dairy prices, even with some margin pressure from rising input costs."
"We have opened our Manheim tractor order book through the second quarter of 2022, filling all production slots through that time period. In South America, we expect industry sales of tractors and combines to increase about 20%."
"Higher commodity prices, strong production, and a favorable currency environment have boosted farmer profitability, driving orders through the remainder of the year and into the first quarter of fiscal year 2022, which is as far as we've allowed the order book to grow."
View John Deere dealersCervus Equipment
Cervus is a leading equipment solutions provider in agriculture, transportation, and industrial markets across Canada, Australia, and New Zealand. With 64 dealerships and authorized representation of major OEMs like John Deere, Peterbilt, and Clark, Cervus supports its customers with reliable and innovative equipment.
"Increases in U.S. and Canadian equipment orders, combined with supply chain disruptions, have caused delays and extended lead times for equipment."
"In Australia, global demand for agricultural commodities remains strong, supported by favorable weather conditions that are helping crops and pastures for the next growing season. Equipment availability in New Zealand and Australia has kept pace with customer demand, but supply chain constraints still linger."
View Cervus Equipment Dealers
Linamar (MacDon)
"MacDon’s markets are performing well, with strong market share in all core products, driving solid sales performance. Despite supply chain issues and FX headwinds, demand is clearly recovering," said Linamar CEO Linda Hasenfratz.
"In the agricultural business, we are seeing a very optimistic outlook in North America, particularly for double-digit growth this year after a soft 2020. Q2 combine retail sales in North America were up 10% compared to the prior year, with Canada up 22% and the U.S. up 7%."
"Market demand is strong, helping to drive an excellent recovery at Linamar. Although supply chain shortages are creating challenges, we are managing them while growing market share and generating cash. We are confident in sustained strong market demand once supply chain issues are resolved."
View MacDon dealersKubota
Farm & Industrial Machinery revenue increased by 31% year-over-year.
North America sales of tractors and construction machinery increased significantly, mainly due to strong demand despite delays caused by port congestion and labor shortages.
Europe sales of construction machinery, tractors, and engines increased due to a recovery from sluggish sales in the prior year.
Japan sales increased by 10.9% from the same period in the prior year due to a recovery from rushed demand before a tax increase.
View Kubota dealersCNH Industrial (Case IH and New Holland)
"Despite ongoing supply chain challenges and inflationary pressures, the continued strength of our end markets, coupled with aggressive pricing activity and margin expansion initiatives, propelled us to record second-quarter earnings. Our industry is clearly in a cyclical upturn, and the sound fundamental performance of our businesses is enabling us to capture much of the benefit. This robust environment contributed to growth across AG, CE, and C&SV order books, which also reflected the excellent Q2 performance of each of these businesses," noted Scott Wine, CEO CNH Industrial.
North America tractor demand was up 3% for tractors under 140 HP, and up 49% for tractors over 140 HP; combines were up 10%. In Europe, tractor and combine demand were up 31% and 13%, respectively. South America tractor and combine demand were up 38%. In Rest of World, tractor and combine demand increased 38% and 12%, respectively.
"We do anticipate more cost pressure (in the second half) than the first half," said Wine. "The AG machinery industry remains strong, extending the themes we saw last quarter, including rising commodity prices, growing trade with China, and the replacement of aging agricultural machinery fleets."
"High horsepower tractor sales were impressive across all regions, up almost 50% in North America and nearly 25% worldwide. While in combines, demand continues to improve with all markets growing over 10% versus 2020. Compared to 2019, both tractor and combine industry volumes were up across all regions except in combines in Europe, which were relatively flat."
"We are confident that the Agriculture segment will continue to outperform through 2021, given our existing order backlog, which now extends well into 2022."
View Case IH dealersView New Holland dealers
AGCO
"Our second quarter results were highlighted by strong margin performance across all regions, resulting in record earnings per share," stated Eric Hansotia, AGCO’s Chairman, President, and Chief Executive Officer. "Focused execution and proactive pricing actions by the AGCO team mitigated the impact of the difficult supply chain environment, which was compounded by escalating material cost inflation."
"Our second quarter sales and production were up significantly from the second quarter of last year when extended COVID-related shutdowns in both Europe and South America interrupted our operations. Favorable farm economics are supporting increases in replacement demand, and the market response to our technology-focused products remains extremely positive. In particular, strong growth in Fendt high-horsepower tractors, Precision Planting products, and our global parts business contributed to the margin expansion. With order boards significantly ahead of last year, we have further increased our net sales and earnings forecast for 2021."
"Elevated prices of agricultural commodities are supporting healthy farm economics. These conditions are expected to generate growth in industry demand across all major markets in 2021."
"North American industry retail sales of low horsepower tractors improved compared to last year, while demand for high horsepower tractors showed considerable strength. An extended fleet age and favorable commodity prices contributed to industry retail sales growth of North American large agricultural equipment of approximately 24% in the first six months of 2021."
View AGCO dealersView Fendt dealers
View Massey Ferguson dealers
Polaris
North American retail sales decreased 28% for the quarter compared to uncharacteristically strong retail sales last year, largely due to low product availability caused by supply chain constraints limiting production. On a two-year basis, retail sales were up 14% over second quarter 2019 pre-COVID levels.
"‘Think Outside’ is resonating with new and current customers alike, with continued strong demand and second quarter results that beat last year’s COVID-impacted quarter as anticipated. Even more notable, we delivered double-digit sales and earnings increases compared to our pre-COVID results from the second quarter and first half of 2019. All of our segments performed extremely well, posting strong increases in both sales and profitability in the face of a challenging supply chain and increasing input cost environment. While supply chain-related headwinds and higher input costs will continue into the second half of the year, the Polaris team’s operational dexterity and nimble approach has been nothing short of spectacular. I remain confident in our ability to meet the product demands of our dealers and consumers and deliver value for our shareholders," said Mike Speetzen, Chief Executive Officer of Polaris Inc.
"As a result of this and continued strong consumer demand, our dealer inventories are at the lowest levels in decades."
"The powersports industry has experienced significant demand, and that trend continued into the second quarter... market share gains continued in the second quarter with gains in both ATVs and side-by-sides."
View Polaris dealersValmont (Valley irrigation)
"Sales growth was led by significantly higher sales in the Irrigation segment, as strong global agricultural market fundamentals continue to drive positive farmer sentiment," said Stephen G. Kaniewski, President and Chief Executive Officer.
North American irrigation sales of $156.1 million increased 58% compared to 2020. Sales growth was led by higher volumes and higher average selling prices due to continued strength in agricultural markets.
Lindsay (Zimmatic irrigation)
"Healthy agricultural market fundamentals and positive grower sentiment continue to drive increased global demand for irrigation equipment," said Randy Wood, President and Chief Executive Officer. "At the same time, raw material inflation and other supply chain issues continue to create challenges and margin headwinds. Our teams have responded well and effectively managed through these dynamic market conditions in order to support our customers."
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