On paper, the two dealerships couldn’t be more different: one, a 25-store John Deere dealership spread across 8 western states, the other, a New Holland and Massey Ferguson dealership with 2 stores in central Wisconsin. But when you listen to the people who run them, their challenges are strikingly similar.
Take the dairy business.
“Dairy prices are very low right now and spending on farm machinery is very limited,” says Waupun Equipment Co-owner Dan Scheuers. “As more small Wisconsin dairies are going away, the market for hay equipment, pull-type choppers, haybines, those kind of things, is drying out quickly.”
The shift toward larger dealerships means bigger equipment, and dealers like Waupun struggle to sell legacy product. “We have to constantly change and try to find something else that fills that gap. It's a challenge,” says Scheuers.
Stotz Equipment
(www.stotzequipment.com) is a John Deere dealer complex based in Avondale, Ariz. with 25 locations in eight western states: Idaho, Wyoming, California, Nevada, Utah, Colorado, Arizona and New Mexico.
Customers in the southern territory farm year round: they will cut a hay crop 12 times. It's all irrigated farming. July and August are the slowest months as far as activity; most work takes place in the winter.
The dealership serves a lot of dairy farmers that grow corn and hay for dairy cows.
Snow equipment is sold in Utah and Idaho only; not in the rest of the territory.
Waupun Equipment
(www.waupunequipment.com) is a two-store New Holland and Massey Ferguson dealership based in Waupun, Wis.
Its farm customers grow alfalfa, corn, soybeans, wheat along with some vegetable crops, many of which are irrigated.
The dealership serves a wide range of dairy farmers – from 60-cow dairies all the way up to 10,000-cow dairies.
Snow equipment is sold throughout the territory.
“Our average size dairy operation is about 2,000 cows,” says Stotz Equipment President Tom Rosztoczy. “Historically, John Deere hasn't built a large square baler, and our hay market is primarily large square bales. Now Deere has a large square baler, so we are entering a market where we have not historically been a player — there's obviously very established competitors. That is our challenge in the years ahead.”
Combines are an important part of each business as well, with similar challenges.
“We were huge in the combine market with the Massey combine years ago, and now that market is shifting,” says Scheuers. “The numbers have shrunk terribly. So that market is basically John Deere and it's very hard for us to stay in that market. We're really challenged with that this year.”
But combines are a challenging market even for a John Deere dealer.
“We know on the one hand that we can sell more new combines than we do. We have more demand for new combines than we sell, because we don't know how to deal with the trade-ins,” says Rosztocyz. “Even though we limit ourselves selling new combines, we struggle to manage our way through the trade-ins. It's a lot of dollars, but that doesn't necessarily mean a lot of gross margin dollars are falling into the business.”
