In this episode of On the Record, brought to you by Associated Equipment Distributors, a Linamar executive says the company isn't seeing market negativity in 2024 as a shortline-only business. In the Technology Corner, Noah Newman looks at Sentinel Fertigation's N-TIME nutrient management platform. Also in this episode, we ask dealers about their agri spray drone offerings, explore monthly dealer sales growth by brand and rising interest rates as a growing farmer concern.

This episode of On the Record is brought to you by Associated Equipment Distributors — the leading association in North America strictly dedicated to the equipment distribution industry.  AED offers a wide range of education, events, advocacy and reports for companies of all sizes and all roles within your organization.  Learn more about AED by visiting www.aednet.org/agdealers

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• Linamar ‘Not Seeing’ 2024 Ag Cycle Negativity
• Dealers on the Move
• N-Time Improves Nitrogen Use Efficiency by 25%
• 34% of Dealers See Potential in Spray Drones
• Interest Rates Grow as a Top Farmer Investment Concern
• Dealers Report Flat Sales Growth
• DataPoint: Payroll Expenses

Linamar ‘Not Seeing’ 2024 Ag Cycle Negativity

Linamar Corp. announced Dec. 20 an agreement to acquire Canadian implement manufacturer Bourgault Industries for $640 million Canadian dollars. 

Bourgault will join Linamar’s existing agricultural brands including MacDon, which it acquired in 2017, and Salford Group, which it acquired in 2022. The addition of Bourgault’s seeding and planting equipment gives Linamar a full lineup of products in the crop production cycle. 

In a webcast shortly after the acquisition was announced, when asked about potential investor anxiety surrounding the possibly peaking ag cycle, Linamar Chief Technology Officer Mark Stoddart stated that, as a shortline-focused company, it was less worried about a 2024 decline in the ag equipment market. Stoddart said:

“We're seeing the main liners looking somewhat negative toward 2024, but we're kind of not seeing that in regard to our business on the shortline side. It seems yes, maybe there's a slow down on some of the big ticket items like the combines, large tractors, but we're seeing indications that for our product, whether it's on MacDon or with Salford, and Bourgault seems to be seeing things fairly strong, we're not that negative about it.”

Stoddart pointed to the lower price point of Linamar’s ag equipment coupled with farmer demand for innovation as reasons the company isn’t feeling as negative about next year, saying:

“We do see that there are some good things. The farmers, they want innovation. They want product that produces better yield, that reduces their overall costs. And obviously a $100,000 or $150,000 header unit or seeder — that’s significantly less than a $1,000,000 combine. So we're not seeing the negative stuff that the OEMs are talking about.”

Linamar Executive Chair & CEO Linda Hasenfratz stated during the call that, with the acquisition of Bourgault, the company's Agriculture group now has 400 registered patents, 2,450 dealers and has products sold in over 30 countries. 

Linamar reported Bourgault currently has over 750 dealers across Canada, the U.S. and Australia, annual sales between $400-$500 million Canadian dollars with a "strong current order book" and operating margins between 14-18%. Hasenfratz said the company aims to double Bourgault’s business within 5 years, as it did previously with MacDon. 

Dealers on the Move

This week’s Dealers on the Move include H&R Agri-Power and Titan Machinery.

Case IH dealer H&R Agri-Power announced the opening of H&R Agri-Power Powersports in Washington, Ind. 

Titan Machinery has acquired Case IH and New Holland dealer Scott Supply in Mitchell S.D. Both Titan and Scott Supply are part of Farm Equipment’s Dealership of the Year Alumni group. 

N-Time Improves Nitrogen Use Efficiency by 25%

This week we’re spotlighting a product that saved growers an average of 42 pounds of nitrogen per acre. It’s called N-Time from Sentinel Fertigation. Company founder Jackson Stansell shows us how it works. 

“It’s really tailored to those who are applying fertilizer in season. What we do is we ingest satellite imagery from two difference sources. We primarily rely on near daily satellite imagery from Planet. We analyze that satellite imagery to isolate the impact of nitrogen on yield potential, quantify a nitrogen sufficiency index that puts a number on nitrogen and ultimately provides a 7-day crop demand for nitrogen outlook. We then turn those into recommendations to either apply or not apply more nitrogen fertilizer, provide a rate prescription for the application to make it tailored to your crops’ actual yield potential in season. We don’t require yield goals, we don’t require estimated nitrogen apply. This software has been proven to improve nitrogen use efficiency by 25% vs. what farmers are doing today, giving great opportunities for profit and productivity improvement.”

For more information about N-Tme, head to PrecisionFarmingDealer.com.

34% of Dealers See Potential in Spray Drones

According to the latest results of the latest Farm Equipment text poll, over a third of responding dealers see some potential in the spray drone market. 

The Jan. 2 poll asked dealers how likely they are to sell ag spray drones in the next 3 years. Just under 15% said they are already selling these drones, while about 20% said they are likely to start selling ag spray drones in the next few years. About two-thirds, however, said they are unlikely to add the product to their lineup in the next 3 years. 

To be a part of future text polls, text FARM to  833-413-2175 to sign up.

Interest Rates Grow as a Top Farmer Investment Concern

In the latest update to the Ag Economy Barometer from Purdue University and CME Group, 72% of farmers said in December that they consider now a bad time to make large farm investments in things like buildings and machinery. Among them, 43% said rising interest rates was their top reason to consider it a bad time for these investments, a record high for 2023.

This was up from 38% who said the same in November. At the same time, the percentage considering increasing prices, including those for farm machinery, as a top reason to make large investments has been falling. 27% of farmers gave this as their top reason in the December update, down from 33% in November and its 4th month in a row of decline.

Among the 15% of farmers who said it’s a good time to make large investments, 30% pointed to higher dealer inventories as their top reason, up from 29% in November and a 6-month high. The percentage considering strong cash flows as their top reason was also 30% in the most recent update. This was up from 22% in November but down from 40% in July.

Dealers Report Flat Sales Growth 

Dealers reported flat sales growth in November, according to the latest Dealer Sentiments report, but there was some variation in results when you look at dealerships’ brands. 

AGCO dealers reported the best results for November, with sales up 6% year-over-year, up from 1% growth the month prior. That’s followed by New Holland dealers, who reported year-over-year sales were up 4%. Kubota dealers reported the largest decline, with sales down 28% year-over-year in November vs. down 7% the previous month. 

Deere dealers report year-over-year sales growth at –1% in November and Case IH dealers reported it at –2%.

One CNH dealer commented, “Our monthly sales were directly impacted by CNH delivery times. We received more deliveries this year vs. the same time last year.” 

Commenting on OEM deliveries, another dealer said, “The OEMs are shipping us excessive amounts of less desirable models vs. core models. Our new inventory levels are unbalanced as a result. 

DataPoint: Payroll Expenses

This week’s DataPoint is brought to you by the 2024 Precision Farming Dealer Summit.

According to Ag Equipment Intelligence’s 2024 Dealer Business Outlook & Trends report, the majority of dealers are forecasting payroll expenses to increase 4% or more in 2024.

At 53%, a majority of dealers are forecasting increases of 4-6%, while 24% are forecasting expenses up 7-10%. Only 2% of dealers expected their payroll expenses in 2024 to be unchanged year-over-year.

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