Trade tensions and bad weather in 2019 hampered planting and harvesting throughout North America, causing many farmers to be cautious about making major investments in equipment.
Nonetheless agriculture tire manufacturers are optimistic entering 2020.
"Early floods, commodity prices, tariffs—there was just a lot of turmoil in the first half of 2019 that caused a lot of anxiety with farmers and with farm product suppliers like tire manufacturers," said Nick Phillippi, national product manager, Alliance Tire Americas Inc.
"But, really, what I heard from most people as the year ended was that they were pleasantly surprised with the overall outcome. The harvests that were in there were good harvests, yields were good. … The money that was brought through the (federal) payment program from the tariffs, from the government really helped," he said. "I've seen where farm income was actually up last year based on those payments being made."
Phillippi said there is an industry wide sigh of relief that farmers made it through another year.
"And start all over again, like farmers unfortunately have to do every year."
The chaotic year gave farmers less confidence than in previous years, and they spent less on equipment, including tires, according to Bridgestone Americas Tire Operations' Cindy Ridge, marketing director for Firestone Ag tires throughout U.S. and Canada.
Paul Hawkins, Titan's International Inc.'s senior vice president of aftermarket sales in North America, said the overall aftermarket and OE tire businesses were flat and slightly down, compared with 2018.
"2019 was really the tale of two cities—we had areas that experienced substantial growth, and we had other areas that were hit hard by local farm community conditions. For instance, portions of Canada not only had bad weather conditions that impacted planting, but they were also negatively impacted by reduced commodity exports to China. Surprisingly, despite some of the flooding, several of our Midwest dealers had record years in 2019."
"The 2019 agriculture tire market was a challenging one," added David Graden, Michelin North America's operational marketing manager for agriculture. "The ag replacement market in North America ended down, somewhere around negative 9 percent versus 2018. Many tire manufacturers that didn't react quickly either missed an opportunity to take market share from those that overreacted or missed the mark because they were over optimistic.
"The OE ag market suffered, as well," he added. "We saw John Deere move some production oversees, and overall purchasing seemed to decline through the end of the year. Much of this was because of the trade war with China, weather and farmer sentiment as they reacted to political and trade progress or decline rumors."
Phillippi said Alliance Tires sales increased for the year, despite all the market obstacles. He noted there was some tire overcapacity, especially in the first half, as people sat on a lot of inventory mid-year. But capacities were constrained for high-end tires, such as VF (very high flexion) and all-steel products, a situation that he expected to continue this year.
U.S. farm tractor sales for 2019 grew 3.6 percent, while self-propelled combines notched down 0.7 percent, according to the Association of Equipment Manufacturers.
All sectors fell in Canada for 2019, with 4-wheel-drive tractors leading the decline with a drop of 37 percent and self-propelled combine sales falling 19.4 percent for the year.
"While growth hit a bump toward the end of the year, ag tractor and combine sales overall for 2019 ended relatively flat," Curt Blades, senior vice president of AEM ag services, said.
"On top of that, from survey data we gathered along with the Equipment Dealers Association, majorities of both manufacturers and dealers agree inventory levels are sitting about right at the moment, which should put our members and the overall ag sector in a positive place for the near future."
The U.S. Department of Agriculture projected 2019 net farm income rose 10 percent, compared with 2018, mostly due to higher commodity income and the financial assistance provided by the Market Facilitation Program and the disaster aid package approved by Congress.
While the U.S. farm economy is expected to rebound after a tumultuous 2019, uncertainty remains, according to the American Farm Bureau.