Editor's note: This article originally appeared in the Farm Equipment November/December 1998 issue.

By Bill Fogarty

Shortly after I joined this industry in 1958, I went to the conventions of the Farm Equipment Manufacturers and the Farm Equipment Wholesalers Assns. at Kansas City's then stylish Hotel Muehlebach.

I was struck by the sense of urgency that floated around the place. Essentially, it was a host of small producers of mechanical ideas searching for wholesalers to carry their lines to dealers. In those days, perhaps 90% of shortliners' products went through those regional distributors to reach the ag market.

That annual gathering of the two groups side by side was a great opportunity for many entrepreneurs. It was the wholesaler's chance to come upon a new idea that might improve farming. If the wholesaler could use his expert knowledge of his territory and then get the dealers to market the idea with vigor, he could make a lot of money for himself and the manufacturer.

Knowing this, everyone seemed interested in taking a risk. In those days, the dominant concerns were, will the farmer be interested, will the product hold up - things like that. This was before product liability and environmental responsibilities became such crucial matters.

Some of the big names in wholesaling were Lindsay Bros. of Minneapolis, Klughartt­Thornhill of Kansas City and the Cropper Co. of Macon, GA Among the up-and-coming shortliners were Hesston Corp. (now one of AGCO's brand names), E.L. Caldwell & Sons, Dunham Lehr and Lilliston.

In those days, the independent distributors had the financial resources to pay for a big chunk of a shortliner's production run, put the product in their warehouses and put their road men out selling to dealers. The system worked well. If a dealer lined up a prospect, he knew his wholesaler usually had the item in stock.

But all this changed. Essentially, the marketplace decreed that the distribution of farm equipment cost too much, be it big-ticket stuff or lesser products. And so we got what we have today, for better or for worse.

One of the changes: Wholesalers became fewer and generally had to find special niches to survive. Some didn't. One wholesaler told me why he was closing down: "We took great pride in the fact that when a dealer called for something, we usually had it and could ship. If it was any single thing that did us in, that was it."

The surviving wholesalers do well finding special niches within farming. Off-shore manufacturers seeking access to North America can sometimes establish an excellent marketing partnership with wholesalers, sometimes through manufacturers' reps.

Another change: Shortline companies grow; the family ownership often has to give way to something else. Some shortliners are bought by conglomerates; some are bought by other shortliners; and some are bought by major manufacturers.

More change: When the shortline becomes an element in the major's broad line, the marketing changes. For dealers, sometimes this is better, more convenient: Simpler paperwork, brand identification, easier financing. And sometimes, the marketing and sales skills that made that shortline a winner come up missing.

The same market potential may be out there for that product family, but what's happened to the special passion with which it was taken to market? Now, every in-line dealer has a shot at the same farmers. Margins can take a drubbing.

Very often, dealers need fat margins on their shortlines. It takes time and expense to pioneer the product and become a true expert. Also, they don't make enough margin on their major lines.

The sharp shortline marketers know this, so in building a dealer organization that will work the product hard and creatively, they give their retailers plenty of operating room.

Idea development costly 

One ag consultant I know recently commented: 'Those companies who got started after World War II - the farmer had a good idea and a hot welding torch. It didn't cost much to have a good new product that could change things for farmers importantly. But today, development costs are far beyond that, and so are start-up costs for new companies. The ideas that make a difference are developed by people with advanced knowledge of electronics or bioengineering. You just won't find the profusion of ideas the way you did 40 or 50 years ago - not in the way it happened then."

A former FEMA president said: "Someone with a bright 'shortliner' sort of idea will have to carve out a modest niche on his own or take it to companies that are already established. It just costs too much otherwise."

Whether these judgments prove right remains to be seen. In any case, the ways that specialized farm equipment make it to the end user will keep changing.

For instance, at future FEMA meetings, could there be megadealers scouting out contract manufacturers to produce certain machines they have in mind for their areas? That's something whole-salers and reps have done occasionally, and very well, too. If the megadealers don't find what they want domestically, you might see them making contacts at off shore shows.

But could it be that the smaller dealer emerges as the expert player when it comes to finding and bringing new shortline ideas to the marketplace? He could have his major line as his anchor and get the strong margins he needs for long-term survival by superior marketing of shortlines. Finding the right product that can make a lot of money is not a trick everyone can do, but there have always been some dealers like that. I hope they increase and multiply.

However it works out, dealers will have to be more proactive in getting the important new ideas working where they should.