In this episode of On the Record, brought to you by Benzi America, Alamo Group recently announced it was closing its Gibson City, Ill., facility and laying off its staff. In the Technology Corner, Noah Newman shares the impact Ag Leaders Al Myers has had on the ag industry. Also in this episode, Claas’s Eric Raby shares his outlook for the rest of 2024 and 2025 and the impact Deere’s layoffs will have on its bottom line. 

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This episode of On the Record is brought to you by BENZI.

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Alamo Group Announces Layoffs, Plans to Close RhinoAg Facility

Another ag equipment manufacturer announced layoffs this week. Alamo Group joins the likes of Kinze, Deere, AGCO and others in laying off staff amid the current ag downturn.

Alamo Group alerted employees at its RhinoAg facility in Gibson City, Ill., on Aug. 20, that it will consolidate operations with the Bush Hog facility in Selma, Ala., by the end of March 2025. Along with the closing, employees will be laid off, starting in October. 

According to reports, RhinoAg president Lisa Tubbs said in the letter the decision is a “strategic move necessary for the long-term sustainability” of the company.

In a statement to Ag Equipment Intelligence, Rick Raborn, executive vice president of Alamo Group’s Vegetation division, said quote: 

“The reduction in force we have announced at our RhinoAg facility in Gibson City, Illinois is regrettable, and was only made after careful consideration. However, we feel that these actions are necessary given the difficult market conditions in our agricultural equipment segment. Like other manufacturers in this space, we’ve experienced a significant reduction in customer demand as a result of the general softening of the agricultural markets we serve. Despite the difficulties we face today, RhinoAg continues to be one Alamo Group’s strongest brands, and we remain fully committed to the future of the brand. Accordingly, as part of the announced reduction in force, we have also decided to move the manufacturing of RhinoAg products to another Alamo facility. We are confident that these measures, including our relocation of the RhinoAg manufacturing operations, will make us operationally stronger and more efficient, building greater future resiliency into our agricultural equipment business.”

Just days earlier, Alamo Group announced the sale of its Herschel Parts business to F.P. Bourgalt Tillage Tools. The company's net sales for the second quarter ended June 30, 2024, were down 5.5% to $146.3 million. Net sales for its Vegetation Management division — which includes its ag products —  were down 19.1% during the quarter vs. last year. 

In the 2024 North American Equipment Dealers Assn. Dealer-Manufacturer Relations survey, RhinoAg was among the "rising stars," showing the most improvement across every category. 

Dealers on the Move

This week’s Dealer on the Move is Progressive Tractor & Implement. PTI is acquiring the stores and territories of Heartland Equipment to expand its business into the northeastern Arkansas and Memphis areas. With this acquisition, PTI will increase its team to over 500 employees and overall footprint from 22 to 27 locations.

Quantifying the Impact of a Precision Ag Pioneer 

Precision ag pioneer Al Myers is a member of the Farm Equipment Shortline Legends Hall of Fame 2024 class. It’s been almost 35 years since the Ag Leader founder introduced the groundbreaking Yield Monitor 2000. It’s hard to quantify just how much Al’s invention and career has meant to the precision ag industry, but one of his longest-tenured employees, Russ Morman, gives it a shot. 

“We've taken a single product that we introduced to the world in 1992, the first commercially successful on-the-go yield monitor and morphed that into everything that you see today in these tractors. Al had a tremendous part of that. Again, whether it be steering systems, all the on-the-go yield monitors that are on the market today, the nozzle-by-nozzle sprayer control systems that people are using, planting systems that are nearly perfectly accurate, over 10 noles an hour. All this stuff came from the competition that Al brought to the industry with that first on-the-go yield monitor, the YM 2000 in 1992.”

We’ll have an in-depth look at Al Myers’ precision ag journey in the upcoming issue of Farm Equipment magazine, arriving in your mailbox the first week of September.

 Claas Exec Outlook for 2025: ‘Wait and See’ 

In mid-August Farm Equipment Editor/Publisher Mike Lessiter sat down for a one-on-one interview with Claas Senior Vice President for the Americas Region Eric Raby.

Raby says given the current headwinds the industry is facing, from interest rates to commodity prices and crop conditions, he has a “wait and see” outlook for the remainder of 2024 and into 2025.

“It changes day to day. I would say we, as an industry, have our feet firmly planted in midair, and that is that right now you see signs of the Fed finally saying that it's pretty imminent, I hope, that we're going to see some interest rate cuts. People need to keep in mind that's the intra-bank rate. How long will it take that to trickle down to rates in the marketplace, whether they're finance rates or mortgage rates or whatever?”

“I think that is a good sign. On the other hand, we take a look at commodity prices still under pressure, not where everybody wants them. Then you have a headwind and you have a tailwind kind of fighting each other and we’re caught in the middle.”

“The other thing is, after November, I don’t know that who's in the White House is going to make a distinct difference on what's going to happen in the farming world, but it’s still on people’s minds, and I think there’s an inherent postponement just to see what happens.”

“Then I look at the crop. I took my annual crop tour last week. My flight from Minneapolis to Des Moines got canceled so I said, ‘Well, I’m not going to wait around.’ So I rented a car and got to drive down, and you see lots of different conditions. I think overall, though, crops are looking not too bad. So that's another headwind tailwind situation.”

“Right now, I would say there’s a lot of postponement. There’s a lot of wait and see, but there are going to be some pressures that we need to recognize. There’s going to be a high amount of carryover inventory both on the new and the used side that we’re not going to be able to work through between now and the end of our fiscal year or even later on in this calendar year that we're going to need to accommodate.”

“From a manufacturer standpoint, those are things that we’re looking at. From a build program standpoint, what do we look at in terms of finance capacity, lots of different things.”

“My outlook right now, I hate to say it, is wait and see, but I'm thinking it’s going to be, at worst, a continuation of this year. But the question is are we going to reach that bottom? And I think we may reach it sooner than we as an industry would've thought about 6 months ago. But again, I’m not a political pundit nor am I a fortune teller for various reasons. I get it wrong on a good day half the time. So we'll have to see what happens.”

As reported previously, since Aug. 2, Claas has announced it was ending distribution agreements with 2 dealers — Ziegler Ag and Butler Machinery. These two announcements follow the announcement that Ohio Machinery was exiting the ag equipment market. All three dealership groups are Cat dealers. We’ll be checking in with Claas next week during the Farm Progress Show in Boone, Iowa, to learn more about their plans for the future of the dealer network.

Deere Reports 25% Drop in 3Q Production & Precision Ag Net Sales

Deer & Co. reported third quarter net income of $1.7 billion on Aug. 15. Worldwide net sales and revenues decreased 17%, to $13.2 billion for the third quarter of 2024. 

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Net sales for the Production & Precision Agriculture division were $5.1 billion, down 25% vs. $6.8 billion for the same quarter in 2023. 

Deere’s outlook for fiscal 2024 is for net income of about $7 billion.

In its SEC filing Form 8-K for the quarter, Deere addressed recent layoffs, which it referred to as “employee-separation programs.” According to Deere, “the programs’ main purpose was to help meet the company’s strategic priorities while reducing overlap and redundancy in roles and responsibilities. The programs were largely involuntary in nature with the expense recorded when management committed to a plan, the plan was communicated to the employees, and the employees were not required to provide service beyond the legal notification period.”

According to the document, pretax expenses from the program are estimated at approximately $150 million, with $124 million recorded in 3Q 2024. The remaining expenses are expected to be recorded in 2025. 

Annual pretax savings from these programs are estimated to be approximately $230 million, of which $100 million is estimated to be realized in 2024.

DataPoint: U.S. No-Till Acreage History 

This week’s DataPoint is brought to you courtesy of the 2025 Executive Briefing. 

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This chart tracking the number of no-till acres in the U.S. shows a decline in acreage from 2021, the last time this history chart was updated, to 2022, the most recent USDA Census of Agriculture. The census reported 105.2 million no-till acres in the U.S. as of 2022. Longtime No-Till Farmer editor Frank Lessiter projects that number will increase to 110 million acres by 2025, but low commodity prices may spur greater adoption of conservation practices that save labor, fuel and inputs.

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