In this episode of On the Record, brought to you by Associated Equipment Distributors, we take an initial look at the Dealer Business Outlook & Trends Report and what dealers are forecasting for 2025. In the Technology Corner, Noah Newman provides a look at Verdant Robotics new Sharpshooter that it demoed at the FIRA Conference. Also in this episode, Deere reports a 16% drop in its fiscal year 2024 net sales and we check in with Claas to see how their goal of doubling business in 5 years turned out. 

On the Record is brought to you by Associated Equipment Distributors — the leading association in North America for the equipment distribution industry. Check out the upcoming 2025 AED Summit, the only industry event strictly dedicated to the equipment distribution industry, with 4 keynote speakers, over 40 industry specific education sessions, and over 200 exhibitors at www.aedsummit.com. Contact us at aedsummit@aednet.org for more information about how you can register for this event.

TRANSCRIPT

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• Dealers Forecast New Equipment Revenue Declines, But Growth for Aftermarket in 2025
• Dealers on the Move
• Verdant Robotics Sharpshooter Delivers ROI Within 1 Year
• Deere Reports FY 2024 Net Sales Drop 16%
• Checking in on Claas’ 5-Year Plan to Double Business
• DataPoint: The Cost of Thanksgiving Dinner

Dealers Forecast New Equipment Revenue Declines, But Growth for Aftermarket in 2025

Coming off a year where dealers had to battle lower commodity prices, increasing costs for equipment and inputs, the uncertainty of an election year and high new and used equipment inventory, the outlook for 2025 revenues skews negative with the lowest percentage of dealers forecasting new equipment revenue growth seen in over a decade.

Over two-thirds of dealers (64.3%) are forecasting new equipment revenues to be down at least 2% in 2025. This compares to 28.8% who forecast a decline for 2024 and is more than double the percentage of dealers forecasting a decline for 2023 new equipment revenue. The last time at least half of dealers were forecasting new equipment revenues to decline was in 2015. That year, when 50% of dealers forecast their new equipment sales would be down at least 2%, North American row-crop tractor and combine unit sales were down 25.9% year-over-year.

About a quarter of dealers are forecasting their new equipment revenue to be flat in 2025, while 12.4% predict revenue from new equipment sales will be up at least 2% in the year ahead.

The good news for 2025 revenues will come from the aftermarket side of the business. 

The majority of dealers forecast parts and service revenues to be as good or better than 2024. Notably, over 90% of dealers say their service revenue will be as good or better (42.0% flat, 43.2% up 2-7% and 7.4% up 8% or more). Turning to parts revenue, it’s a similar picture with 43.2% projecting flat revenues, 44.4% forecasting growth of 2-7% and 4.9% expecting revenues to be up 8% or more.

The full report will be released to Ag Equipment Intelligence subscribers next week.

Dealers on the Move

This week’s Dealers on the Move include C&B, Ewald Kubota and Lansdowne-Moody.

John Deere dealer C&B Operations announced its ag division was purchased by Point Field Partners on Nov. 1. Point Field was founded by Steve Bisciotti, owner of the Baltimore Ravens. According to the dealership, the C&B team will remain the same and will operate as normal. 

Ewald Kubota has announced a new partnership venture with Lansdowne-Moody alongside Blue Water Advisors. Lansdowne-Moody is a 9-store Kubota equipment dealership serving the Houston Kimarea, and Ewald Kubota reported it expects the closing of the transaction to happen in December, 2024. 

Verdant Robotics Sharpshooter Delivers ROI Within 1 Year

Let’s head west to catch up with Verdant Robotics. The company showed off its new Sharpshooter at the FIRA Conference a few weeks ago.

Dubbed the only robotic precision application system that aims before it shoots, Sharpshooter uses Bullseye Aim & Apply Technology. It’s capable of spraying targets ranging from the size of a dime to a dinner plate at a rate of 120-480 shots per second, while covering up to 5 acres per hour. And as Verdant co-founder Curtis Garner tell us, it can be used for more than just weed control. 

“The main thing you should know about Verdant — we’re not just a weeding machine. We do that well and that’s the first thing the grower can get an ROI on. We can do a lot more for them. Weeding, thinning, applying crop protectants. Whatever they need, we’re here to provide value. As far as dealers, we’d love for dealers to reach out. We look to partner with folks for sales and service. So, reach out, would love to have a conversation.”

The company says Sharpshooter can cut chemical inputs by over 96% and reducing hand-weeding costs by an average of 65%. These efficiencies enable growers to achieve a rapid return on investment, typically within 12 to 24 months.

Deere Reports FY 2024 Net Sales Drop 16%

Deere & Co. reported its fourth quarter and fiscal year 2024 results on November 21. For the full year, net sales and revenues  were down 16% to $51.7 billion. Net sales from equipment operations were down 19% to $44.8 billion. 

For the quarter, net sales and revenues dropped 28% and net sales from equipment operations were down 33% for the quarter. 

Deere’s Production and Precision Ag segment saw net sales for the quarter drop 38% vs. the same period last year. Operating profit for the segment was down 64% for the quarter to $657 million vs. $1.8 billion in fiscal year 2023. 

Net income attributable to Deere & Company for fiscal 2025 is forecasted to be in a range of $5.0 billion to $5.5 billion.

Checking in on Claas’ 5-Year Plan to Double Business

Five years ago this week, during Agritechnica 2019 in Hanover, Germany, Claas Senior Vice President-Americas, Eric Raby, talked at length with Ag Equipment Intelligence. At that time, Raby projected the company would double its revenue over the next 5 years.

To find out how that plan worked out, on the 5-year anniversary of that in-depth discussion, AEI reconnected with Raby for a deep dive discussion on what’s happened since. Here’s a condensed version of that executive conversation on a range of topics — from big results to rooftops, coping during COVID to the dynamics of its dealer distribution network.

Five years later, Raby reports that not only did Claas double its business but it did it more quickly than it anticipated, hitting the goal in 4 years. Just months later, the COVID-19 pandemic hit, adding a new challenge.

"It was certainly a challenge for everyone. But the demand was really there. And I would say one of the great things, even as far away as we are from some of the production sites that we had, not all, combines were right in our back back door. But we were, prioritizing North America as a growth opportunity for the Claas group."

"And we did everything possible to make sure that we had as uninterrupted a supply chain as possible. Yeah, we did have some delays here and there, but none were extraordinary that we couldn't workaround by using, a trade-in machine or helping a dealer out, however we needed to. But one thing that really, I was quite proud of is our combine production facility in Omaha."

"We shipped 100% of every combine that was ordered before the end of that fiscal year. So that was really, I would, say a testament to, not only everyone buying into, hey, we can do this, but even in the face of Covid, I don't think we missed but maybe one and a half days of production during Covid."

"And I think just the first day was when we had to shut down, and we're like, okay, what do we do? And the other half day was when we had our first positive case and we said, oh, what do we do now? And we went in and extraordinarily cleaned everything and those type things. But then after a while, we kind of got the hang of it."

"We segregated, different parts of the business, did our social distancing, all that. But every day the same people came in, built the same high quality combines. And it was really good. If you can build combines under those conditions, you can build combines about anytime, anywhere."

DataPoint: The Cost of Thanksgiving Dinner

This week’s DataPoint is brought to you by the 2025 Executive Briefing. Learn more and register at AgEquipmentIntelligence.com.

Cooking a Thanksgiving feast for your friends and family will cost less than last year but will still be more expensive than before the pandemic.The American Farm Bureau Federation’s 39th annual survey provides a snapshot of the average cost of this year’s classic holiday feast for 10, which is $58.08 or about $5.80 per person.

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