A policy of enabling John Deere dealers to fill out their product lines with equipment from subsidiaries and alliance partners is continuing to be pursued by Deere with the acquisition of an Italian manufacturer of self-propelled sprayers and a newly formed alliance with the German manufacturer of agricultural material handling equipment.
Have you ever wondered what the “new normal” means? I think it’s another way of saying that things are heading south, back to some level that was considered “normal” at some point in time.
North American farm equipment dealers are still cautious when it comes to projecting sales growth for all of 2017. At the same time, some dealers are seeing signs that sales trends are improving.
Deere & Co., best known for its dominance in farm equipment industry, made a big and unexpected move on June 1 when it announced it would be expanding the reach of its Construction & Forestry division by acquiring the German construction equipment maker Wirtgen Group. Most industry analysts covering the heavy equipment market agree that the acquisition represented a major strategic acquisition that will strengthen the company’s equipment operations on several fronts.
A few weeks ago in this space (May 29 to be exact) dealers were asked via online survey if they were feeling pressure from their major line suppliers to order more new equipment than they wanted to order. More than 170 dealers took us up on our invitation to participate.
During the last few years, dealers have been extremely conservative with their revenue growth projections for the precision farming segment of their businesses. This is a direct reflection of their customers’ more prudent purchasing habits.
Source: Deere & Co. Annual 10-K filed in December for FY ending October 2016
There’s little doubt that there fewer farm equipment dealers than there were a decade ago, but, in the case of John Deere dealer locations, the change isn’t as significant as you might think. The biggest reduction in Deere dealers has come in the retail locations handling the company’s turf equipment.
North American farm machinery dealers continue to report listless but stable sales trends. Through the first quarter of 2017, dealers say equipment sales were still in negative territory year-over-year, but improved compared to the last quarter of 2016.
Almost since the sales of farm machinery began its slide in late 2013 and early 2014, used ag equipment headlines have dominated the industry’s headlines. And rightfully so. Many of the best dealers in North America have said it, “The one thing that will destroy a dealer’s business faster than anything else is an uncontrolled inventory of used equipment.”
Rocky Mountain Dealerships (RME) and Cervus Equipment (CERV), two of Canada’s largest farm equipment dealership groups, issued first quarter earnings reports in the past week showing improved sales levels.
Built on 90 years of expertise, Yetter Farm Equipment leads the agriculture industry in designing effective and innovative equipment for residue management, seedbed preparation, precision fertilizer placement, harvest attachments, strip-tillage, and more.
Montag is the industry’s innovative leader for precise, accurate metering of fertilizer, seed and other nutrients. The Montag system has become the standard for deep banding of fertilizer. Montag is also pioneering the technology for cover crop seed application. The new Cover Crop+ is able to meter the smallest seed, and can be mounted to tillage implements, combines, plus Hagie sprayers and detasselers.
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