With more cash in their pockets, Wisconsin farmers are spending it on tractors and other machinery — giving a boost to the rural economy and equipment makers such as John Deere Co.

Farmers are benefiting from two consecutive years of high crop prices and mostly higher milk prices.

Flush with cash, they're buying equipment and other things that were put on hold for a while.

When farmers have money, they're willing to spend it, said Bruce Jones, an agricultural economist at University of Wisconsin-Madison.

Each dollar of net farm income results in an additional 60 cents of economic activity as farmers spend money in their local communities, according to UW research.

That translates to millions of dollars for the rural economy and urban centers as well, since most of the items farmers buy come from other places.

"There's quite a bit more cash out there" now compared with a few years ago, Jones said.

This week, the annual Wisconsin Public Service Farm Show in Oshkosh drew thousands of farmers interested in the latest equipment and farming technologies.

"It was about as strong of attendance as I have ever seen," said Nick Schneider, a University of Wisconsin Extension agent in Winnebago County.

U.S. sales of row-crop tractors increased 14% last month, from February 2011, while sales of all four-wheel-drive tractors were up 12%, according to the Milwaukee-based Association of Equipment Manufacturers.

Agricultural equipment exports increased 23% in 2011 after a 12% increase in 2010.

Deere & Co., the maker of John Deere tractors, recently said it would spend $70 million to expand manufacturing at its Waterloo, Iowa, operations where it builds large farm tractors.

"The market demand John Deere has experienced for larger agricultural equipment has remained strong for several years. We believe the time is right to invest in our facilities," David Everitt, president of John Deere's Worldwide Agricultural & Turf Equipment division said in a news release.

Local farm equipment dealers say they've seen an uptick in sales, driven by an early spring and a stronger farm economy.

Lower interest rates have helped, too, with some equipment manufacturers offering 0% interest for 60 months on purchases costing tens of thousands of dollars.

There's also strong interest in used farm equipment, some of it at half or less the price of something new.

"In my business, I can make more money and have a better-satisfied customer with good used equipment," said Danny Strupp, owner of Strupp Implement Co. in Slinger.

Some farmers have waited months for equipment they ordered, as manufacturers have been hesitant to build too many machines that won't sell if the farm economy turns sour, said Kevin Jarek, a UW-Extension agent in Outagamie County.

"There's not a whole bunch of inventory in the marketplace," said Charlie O'Brien, vice president of agricultural services at Association of Equipment Manufacturers.

In the farm crisis of the 1980s, O'Brien recalled, manufacturers and equipment dealerships were stuck with unsold farm machinery.

"Ultimately, if there is a downturn, a lot of people can suffer the consequences," he said.

The recent demand has driven up prices of new and used equipment.

That, and higher land rents, have made it increasingly difficult for small farms, said Joel Greeno, a dairy farmer near Kendall.

Equipment prices at farm auctions are "outrageous," Greeno said, as farmers seek used machines because they can't afford new ones that sometimes cost hundreds of thousands of dollars.

Farmers who used to attend auctions for older equipment, for parts, are now bidding against professional equipment buyers and even scrap-metal dealers.

"It's almost an all-out war at auctions," Greeno said. "It's created a nightmare for those of us who used to pick up odds and ends for parts."