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.
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