A cool, soggy spring stifled or delayed the planting season in some regions of the U.S., while elevated import tariffs on commodities disrupted sales for U.S. farmers.
"It created increased anxiety with the farmers, with producers and with even lending people, and then with all the people associated with the farm business, like seed, fertilizer and, of course, tires," said Nickalas Phillippi, national product manager for Alliance Tire Americas Inc.
"2019 has definitely been a challenging year in the North American agriculture market. Severe weather conditions and heavy moisture in the Midwest from January through May led to a delayed planting season and a large amount of prevent-plant acreage," Tony Orlando, Firestone Ag president at Bridgestone Americas Inc., said.
"In addition, a number of trade and fluid market conditions led to high farm product inventory and downward pressure on commodity pricing. All of these factors resulted in lower farm income and a decrease in farmer confidence and spending on equipment," he said.
Early winter snowstorms gave way to exceptionally wet spring that left some Midwestern farms flooded. All of those factors had a major impact on the farming industry, according to Tarang Srivistava, Ceat Specialty Tires General Manager Tarang Srivistava said.
"And, of course," Srivistava added, "the Chinese tariffs have not been helping either to liquidate the huge corn and soybean inventory in the U.S."
Due to the depressed farm economy, there has been a 13 percent increase since June 2018 of farmers filing for Chapter 12 bankruptcy, according to the American Farm Bureau. States in the Midwest, such as Kansas, Minnesota and Wisconsin, had the highest number of filings.
"The deteriorating financial conditions for farmers and ranchers are a direct result of several years of low farm income, a low return on farm assets, mounting debt, more natural disasters and the second year of retaliatory tariffs on many U.S. agricultural products," the Farm Bureau said.
When conditions are poor, "farmers typically try to delay expenditures on buying new farm equipment, which means less tires sold to OEMs," Srivistava said. "And we also see farmers gravitating more toward the value brands because they really want to maximize their dollar.
"Therefore, in my opinion, the major brands that are big with OEMs and that are typically more expensive for the farmer, they'll see a sharper downturn in their revenues. The value players, like ourselves, we are actually seeing better sales."
Dave Paulk, manager of field technical services for BKT USA Inc., said several tire dealers have told him they have been getting requests from farmers for used tires as they try to cut costs.
"Everybody is tight-fisted with money it seems," Paulk said.
"I know a lot of farmers haven't gone out and bought new equipment. Every year you have new equipment, but they haven't bought it in the amounts they generally buy it in, because planting was late and commodity prices are still low," he said, adding, "Whenever they're keeping their old equipment and having to replace tires, that's very good for the aftermarket."