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Farm Machinery Sales Down Again

February 18, 1986

WASHINGTON (AP) _ Sales of new and used farm machinery to farmers are expected to drop again in 1986, in a seven-year slump that shows little sign of easing, according to new projections by the Agriculture Department.

Farm machinery sales peaked at nearly $11.8 billion in 1979. This year, analysts say, sales could be less than half of that, perhaps in the range of $5.25 billion to $5.5 billion.

The latest projection was included in a new outlook report by the department’s Economic Research Service. If sales do drop to the level indicated for 1986, they would be down 10 percent to 14 percent from $6.1 billion last year.

Carlos Sisco, who worked on the report, said 1986 machinery sales could be the lowest since the mid-1970s.

The reason for the drop in machinery sales has been the crunch on farm income in recent years and the plummet in farmland values, which has reduced sharply the assets and borrowing power of farmers.

Real estate assets, for example, were shown in the report at $638.2 billion as of Dec. 31, 1985, down from $693.7 billion at the end of 1984. Since Dec. 31, 1980, real estate assets have dropped more than $200 billion, according to the report.

Another decline is expected this year, with farm real estate assets projected in the range of $600 billion to $620 billion on Dec. 31, 1986. Farm debt, meanwhile, continues at near-record levels, estimated at $212.1 billion as of Dec. 31, 1985. The peak was $217.2 billion at the end of 1982.

″Consequently, domestic demand for farm machinery will be further affected,″ the report said. ″Capital expenditures for new and used tractors are forecast to total $1.8 billion to $1.9 billion in 1986, compared with an estimated $2.05 billion last year.″

Farm spending on all other new and used machinery is expected to drop to between $3.45 billion and $3.6 billion this year, compared with $4.05 billion in 1985.

″The projected declines are due somewhat to reduced machinery prices, but for the most part reflect expected lower unit sales,″ the report said.

If the 1986 projections are accurate, the U.S. farm machinery industry probably will continue efforts to curb production in order to keep inventories in line with sales, it added.

Purchases of most farm machinery dropped sharply in 1985 and are expected to decline further this year. In particular, sales of farm wheel tractors of over 100 horsepower, along with grain harvesting equipment, fell signifcantly last year, the report said.

Currently, U.S. exports and imports of farm machinery are also declining. But ″there is a growing reliance on imported farm machinery″ in the United States, the report said. Canada is the major supplier, followed by Japan.

″As more domestic tractor production capacity is relocated abroad, and exports continue to decline, a positive farm machinery trade balance will be increasingly difficult to maintain,″ the report said.

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WASHINGTON (AP) - The Agriculture Department has some advice for poultry producers who want to avoid avian influenza in their flocks. For openers, they should be a bit anti-social.

″Don’t visit other poultry farms, and don’t allow visitors on your farm - even friends and relatives,″ the department’s Animal and Plant Health Inspection Services said.

″Don’t allow anyone into your poultry house or egg room unless they wear sanitized coveralls and boots. Change your clothing when you leave the poultry house.″

The advice was included in a call for ″greater biosecurity″ in the poultry industry to curb disease outbreaks. Recent avian influenza outbreaks have resulted in hundreds of thousands of birds destroyed in Pennsylvania, Massachusetts, New Jersey and New York to prevent the spread of the disease.

Avian influenza is an acute infectious, contagious viral disease of poultry, the agency said. It does not affect humans.

Bert W. Hawkins, head of APHIS, said the outbreaks of the disease in 1983-84 showed that ″avian influenza is spread chiefly by man - by the movement of people, equipment and vehicles contaminated with the virus.″

Some other advice by the agency:

-Do not loan equipment or borrow equipment from any other farm.

-Restrict the movement of all vehicles entering and leaving your farm. Clean and disinfect the tires, undercarriage and floor of all service vehicles.

-Always take a shower an wash hair when arriving home from a poultry farm.

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WASHINGTON (AP) - Alan T. Tracy, who has been deputy assistant secretary for marketing and inspection services in the Agriculture Department the past year, moves up today to the top job, at least temporarily.

Tracy was named acting assistant secretary, filling in for Ray Lett, who has been shifted to another USDA job as director of intergovernmental affairs.

Before he became deputy assistant secretary, Tracy served as associate administrator and general sales manager for the department’s Foreign Agricultural Service, and as deputy undersecretary for international affiars and commodity programs.

In his latest role, Tracy will oversee a number of regulatory programs, including meat and poultry inspection, and marketing programs.

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