Technology | Summer 2008
Place your machinery order early.
By Scott Garvey
If you need to have a new tractor, combine or seeder ready to roll for the 2009 season, now isn't too soon to start looking.
The bright economic outlook is prompting many farmers to check out their local machinery dealerships. They're finding bare lots. Even with the money in hand, many producers looking to update or replace aging equipment are having a tough time tracking down new machines to buy.
They're being hindered by their own success. The global surge in demand for new tractors, combines and seeding equipment has created waiting lists of customers. Taking delivery of a new high-horsepower tractor could now involve a wait of six months or more, depending on the brand. Adding to this demand pressure is the way most dealers now operate. Due to the high value of today's equipment, few are willing to stock large inventories. Instead, they prefer to sell primarily on the basis of new factory orders.
According to John Schmieser of the Canada West Equipment Dealers Association, the evolution in farming, increasingly dominated by large-scale producers, is part of the reason for that. Large-scale operators tend to take a long-term approach to production scheduling, including the way they buy machinery. "Dealers are talking with customers 12 months in advance (of a purchase)," says Schmieser. "That's where the planning comes into it."
Factory ordering of new equipment after making deals with producers had been working well - until demand exploded and production lines couldn't keep up. And small dealer inventories left no cushion to soften the impact of production shortfalls.
Most dealers saw the difficulty coming and tried to make their customers aware of the changing environment. "At first some guys didn't believe us when we told them they had to put their orders in early. They just thought we were trying to pressure them into making a deal," says Alvin Hebert, a sales rep with R.G Mazer Group that operates a chain of CNH dealerships across Manitoba and Saskatchewan. But the reality, he adds, is that short-term delivery of most new grain-sector machinery is now virtually impossible.
It's a global phenomenon. John Deere's Waterloo, IA plant, for example, builds the company's big 7030-, 8030- and 9030-series tractors for shipment all over the world. Besides producing tractors for the North American market, the plant exports about a third of its output to more than 130 countries. And with farmers everywhere realizing the benefits of increased grain and oilseed prices, demand for John Deere products has also risen globally.
Other manufacturers have noticed the same world-wide surge in large-tractor orders. For example, Eric Allison, director of sales for Buhler Versatile in Winnipeg, estimates 50 per cent of his company's 4WD tractor production is currently shipped out of North America.
As manufacturers scramble to ramp up tractor production, their inability to get components, especially large tires, is hampering their efforts. "Our standard tires are in short supply," says Allison. "We have had tractors starting down the assembly line in the morning without tires." To get tractors delivered to customers as quickly as possible, the company has been asking dealers and producers if they'll accept tractors with the smaller, available tire sizes rather than those originally specified.
The shortage of large tractor tires has affected all manufacturers. Kevin Miller of Miller Farm Equipment, a Case IH dealer in Moosomin, SK, says four new 4DW tractors were recently delivered to his dealership equipped with only single tires, leaving them unusable. Getting these tractors field-ready calls for some creative thinking. "We'll try to make one out of two," he says.
As end users, more than a few producers have found themselves caught in the crunch. Dean Stockman of Beechy, SK. is one. "I made the deal (for my tractor) last October. My dealer phoned me back the next day and said if I'd made the deal a couple of days earlier, we could have got you a tractor. But now we won't be able to get you one in time for seeding." Fortunately for Stockman, the dealer had another, similar tractor already in the pipeline as part of a stock order. Although it was not equipped the way Stockman wanted, he was able to negotiate a deal for that unit instead.
Stockman wasn't in dire need of a new tractor. "Very rarely do I keep a tractor so long that I'm desperate," he says. Had he been unable to get delivery of an alternative tractor in time, he could have updated and extended the service life of the old one. With new equipment in short supply, more producers might have to take that route, at least in the short term.
