Ag Growth International raised questions over the resilience of agriculture spending, saying that lower yield prospects had prompted farmers to hold back on orders.

The Canada-based maker of silos and crop conveyors blamed "farmer uncertainty" for a fall in sales of items such as portable grain handling equipment and temporary crop stores in the July-to-September quarter.

This sentiment had been instilled by a cocktail of US crop "challenges", Gary Anderson, the Ag Growth chief executive, said, citing "delayed planting, then a hot dry summer and now highly variable weather conditions as we enter harvest".

"The heat stress of the summer coupled with varied weather conditions in recent weeks has resulted in lower yield expectations and reduced crop production estimates," the company said, estimating trade sales would fall $5m to $81m in the quarter.

"These factors in combination appear to have created a wait-and-see attitude in many farmers' purchasing behaviour."

'Significant reduction in demand'

Ag Growth made no mention of any potential impact of global economy fears, which have been reflected in falling grain prices. Chicago corn and soybean futures set fresh 2011 lows on Tuesday.

Its comments, nonetheless, appear at odds with assertions from many other agriculture groups, such as the big fertilizer companies, of a continuing boom in spending by growers seeking to maximise yields and cash in crop prices which, by historic standards, remain high.

Ag Growth acknowledged that, in Canada, "excellent" harvest weather had also hurt sales, as, "accordingly, the harvest was clean and efficient and the crop was generally taken off at optimal moisture levels.

"Consistent with the Company's previous experiences, a fast, dry and efficient harvest has resulted in a significant reduction in demand for portable grain handling and aeration equipment."

Canada crop revisions 

The comments came as Ag Growth revealed the $11.0m acquisition of US-based Airlanco, a maker of crop aeration equipment – the second takeover in two days in the industry, after tractor giant Agco on Monday revealed the $940m purchase of GSI Holdings.

And they came as officials at Statistics Canada cut by some 300,000 tonnes to 12.928m tonnes their forecast for Canadian canola output this year, noting expectations of a 4.8% drop in yields.

The estimate for Canada's wheat harvest was edged higher to 24.16m tonnes.

Shares in Ag Growth tumbled 13.9% to a 22-month low of Can$30.74 in early deals in Toronto.

The shares were downgraded by National Bank analysts to "sector perform" from "outperform", and by TD Securities to "hold" from "buy".