Source: TBJNow Powered by The Business Journal

FRESNO, Calif. — With California’s historic drought draining the profits of many Valley farmers, area ag equipment suppliers are also feeling the pain.

Dealers up and down the Valley report sales of tractors, combines and balers have slowed considerably in recent weeks as more Valley acreage is fallowed and farmers gird for what could be a bone-dry summer growing season.

And with no guarantee the four-year dry spell won’t stretch into a fifth or even sixth year, many area ag operators are cutting back on capital investments and choosing to idle or repair existing equipment.

“We’ve got seven guys working in our [repair] shop and I’m looking to hire an eighth,” said Dale Wilson, general manager of Pioneer Equipment, a large tractor dealer with stores in Fresno and Reedley.

“People are still buying new tractors but the shop is where the action is right now,” Wilson added.

“We had a good first quarter but things are really starting to slow down now,” said Stan Samuelson, sales manager at Kuckenbecker Tractor in Madera.

Samuelson said the drought “is on all of our customers’ minds” and he predicted if there is no relief from Sacramento — or Mother Nature — business could “fall off by 40 or 50 percent by the end of the year.”

“Farmers are worrying about the drought and not spending much money. It looks like summer sales are going to be dead,” he added, noting that he has yet to see a significant uptick in repair orders at Kuckenbecker.

At Pioneer, after tallying record sales in 2013 and 2014, Wilson also reports that purchases of new equipment have “slowed down a bit” in 2015.

The downturn is not dramatic yet, Wilson added. “But it’s got us all a little concerned.”

Like most equipment dealers, Pioneer offers leasing but Wilson said very few potential buyers come in inquiring about the option.

“We don’t do much leasing,” he said. “It doesn’t make sense to lease when you’ve got manufacturers offering zero percent financing so at the end of four or five years, you own the piece of equipment outright.”

Valley equipment dealers may actually be catching up with their counterparts in other states. Nationwide, industry sources report sales of new farming equipment fell 15 to 20 percent in 2014, with more than seven out of 10 dealers seeing a decline in overall sales compared to 2013.

The steepest drop was in sales of new combines, which were down 30 to 40 percent in some parts of the country, according to the Farm Journal.

Planters and tillage equipment sales were down too.

Ken Arnst, general manager of Hanford Equipment in Kings County, said his company’s sales are off “somewhere between 10 and 20 percent” so far this year.

“Business is still good. Farmers are still buying tractors,” Arnst said. “But are we losing some sales to the drought? You bet we are.”

At this year’s World Ag Expo in Tulare, a number of tractor dealers complained about a significant slowdown in orders for this year’s models.

“Everybody from California is talking about the drought. Nobody is writing checks,” one dealer said.