Changing Tariffs Stir Ag Industry Response

In this episode of On the Record, brought to you by Associated Equipment Distributors, we have reports from both the Farm Equipment Manufacturers Supply Summit and the North American Equipment Dealers Association's Legislative Fly-In. Those reports cover reaction to the tariffs and what they could mean for manufacturers and dealers alike. In the Technology Corner, Noah Newman looks at how AI could be a game-changer for dealers. Also in this episode, a look at tractor dealer same-store sales from March.

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TRANSCRIPT

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• Tariffs: A New Rubik's Cube Each Day
• Dealers on the Move
• Discussing AI’s Potential Impact on Service & Support
• Tracking Crop Prices
• Dealers Land on Capitol Hill
• Same-Store Tractor Revenue Flat in March
• DataPoint: Number of U.S. Farms Continues to Decline

Tariffs: A New Rubik's Cube Each Day

The tariff situation directly hits everyone at the FEMA Supply Summit. Even the few that are doing all U.S. business and with U.S. components will soon feel the impact of the steel tariffs. Most OEMs in attendance are sourcing key components or materials throughout the globe. 

AEI asked one Canadian farm equipment manufacturer who does business on both sides of the border what life has been like in recent weeks following the Canadian tariff situation.The shortline manufacturer described the tariff situation as "having 49 of the 54 stickers on a Rubik's cube" reshuffled each and every night and having to consider a new what-if path the following morning.

Other manufacturers advised their peers to practice high-diligence at all steps of what might have been considered "normal cost of business" including line-item reviews from freight forwarders. Several longtime ag equipment executives advised over-communication with suppliers, customers and distributors as lack of information — even if it ends up being only temporary — can lead to paralysis. 

This may be of particular note with dealers who work with shortlines and can be confused by multiple approaches taken by multiple suppliers.

Kubota is getting out ahead communicating to its dealers. Our editors learned that the OEM communicated with its dealers on April 9 that it wouldn’t be doing anything until May 1. 

For more on-going coverage of the tariff situation visit Farm-Equipmnet.com/tariffs2025. 

Dealers on the Move

This week’s Dealers on the Move include Carter Agri-Systems, Delta Ag Equipment and N&S Tractor. 

AGCO dealer Carter Agri-Systems expanded into multiple locations in Utah as it combined operations with Overson’s Farm Center in January. In addition to its locations  in Lund and Winnemucca, Nevada, Carter Agri-Systems now manages the Utah dealership locations in Cedar City, Delta and Richfield — all of which will operate under the Carter Agri-Systems name. 

Delta Ag Equipment announced the March 31 grand opening of Mississippi’s first full-line Fendt and Massey Ferguson dealership in Cleveland.

Case IH dealership N&S Tractor has announced its acquisition of the Sonsray Machinery Case CE contracts from the Stockton, Sacramento and Redding stores in California, as well as the Portland and Salem stores in Oregon, and the Sparks store in Nevada.

Discussing AI’s Potential Impact on Service & Support 

We’re talking tech with Vanderloop Equipment CEO Robb Vanderloop today. The Wisconsin AGCO dealership has been ahead of the curve when it comes to expanding its precision portfolio. And now, Vanderloop believes AI is a potential game-changer, not just for farmers, but for dealers, as it has the potential to make the technician’s job much easier.  

“Our technicians today have to be really good to be able to do diagnostics on some of these systems. In service training, they can bug a machine, and they have the technicians figure out where they bug the machine. That’s good, but it’s not the real world. In the real world, when you have a bug, it might happen once every hour, or once every 2 days. Figuring out how to diagnose it can be very challenging. With AI, a lot of this stuff will be self-learning. It’ll be able to see when it has a problem, detect it and report back if it’s a hydraulic failure or mechanical failure, and know enough to stop it.”

Catch more of our sit-down interview with Robb Vanderloop on the Farm-Equipment YouTube page.

Tracking Crop Prices

As of April 9, corn prices were $5.74 up $1.10 from our last episode two weeks ago. Soybeans closed at $10.12, up 5 cents. And Wheat closed at $5.42, down 6 cents. 

Dealers Land on Capitol HIll 

Representatives from over 30 dealers and members of the North American Equipment Dealers Association ascended on Capitol Hill this week for NAEDA’s Legislative Fly-In. The group met with around 25 legislators, to discuss the need for the Farm Bill to be updated, tariffs, the death tax, section 179 taxes section 199 A taxes and right to repair. 

The coalition met with about 25 legislators to deliver a unified message on the key priorities for the association, who it represents and the importance these issues have on rural communities and the ag industry as a whole. 

 Managing Editor Christine Book joined the group in Washington D.C. and spoke with Kim Rominger, president of NAEDA, who says this year they focused on meeting with key committee members, including Agriculture, Commerce and Finance.

 Here’s Rominger:

"All of those committee members were addressed and the key priorities and how the tariffs could affect our industry. Right now we're fairly well exempt on some things on the tariffs at this point because USMC is pretty much held right now for the time being. And so those tariffs there are set in legislation. So we're in good shape right now."

"Now the bad part there is European tariffs are going to come in, so any of our dealers that are importing European products into the US may be affected. They won't be affected in Canada because Canada and the Europeans aren't in a tariff battle, let's say, at this point in time. So those are the key issues right now is what's going on in our industry. I would say, again, I mentioned taxes before, those are critical for the future and ongoing for our industry and for our dealers and for the farmers. We're also representing the farmers here in a way, because the Farm Bill is critical to growing the dealer's business and they're customers, we have to represent them in a certain fashion as well."

Right to Repair was a big topic of discussion as well. The group was on the HIll to advocate against a federal Right to Repair bill and outlined dealers' stance on the issue, Rominger says

"In other words, parts that cost for dealers to a customer will not benefit the customer in the long run. There will be fewer parts on hand if dealers can't sell at a profit. It's just standard marketplace and financial business. If you're going to have a product and sell it, you need to make a profit on it. So they won't inventory those products if they're not going to be able to make a profit on it."

"And a lot of the misinformation on the Right to Repair side is the customers are wanting to program out some of the safety devices, some of the EPA mandated emissions devices so that the performance of the unit can go up and they can manipulate that a little bit. And we are in favor of customers repairing their own products. And the majority of major manufacturers through the MOU with the Farm Bureaus have that ability now. And there's programs by every manufacturer to allow a customer to do that."

Finally, the Farm Bill was also a key topic. Rominger says since the Farm Bill hasn’t been updated in a few years, the numbers used in the current bill just can’t be forwarded into the current 2025 or 2026 year, stressing that those numbers need to be updated for the current bill so inflation and farmers’ current costs are accounted for. 

"We're advocating for a completely updated farm bill for the current time. Not one that just has been passed in the past and we are bringing up the future. That's not going to work. Not for our members and not for the farmers. So that's the major position we have on the farm bill, but we have to have a new farm bill."

According to Rominger, Congressman Glenn Thompson, chairman of the House Committee on Agriculture, is confident we’ll have a new Farm Bill by summer. 

"But with politics, you never know. And the sooner the better. The sooner we get it, market confidence and everything else will depend on that. And the market will be driven by the sooner it comes out, the more good news that'll help commodities. That's going to help everything once we get the farm bill completed."

Same-Store Tractor Revenue Flat in March

Same-store tractor dealer revenues were flat year-over-year in March, following at least 11 consecutive months of year-over-year declines, according to the latest report from Constellation Dealer Insights.

The report is based on a group of dealers who have reported their data over the previous 3 years.

In March, these dealers reported revenues of $72 million, which was flat year-over-year, but up from $54 million in February and $52 million in January. 

Looking at it on a regional basis, dealers in the U.S. reported revenue was down 1% compared to dealers in Canada who reported 94% growth in March. In the U.S., dealers in the Midwest reported the best results with revenue up 15% in March, while the Northeast had the lowest results at down 12%. 

DataPoint: Number of U.S. Farms Continues to Decline 

This week’s DataPoint is brought to you by the Dealership Minds Summit, July 29-30. To view the program and register, visit DealershipMindsSummit.com.

The number of farms in the U.S. continued its yearslong decline in 2024, reaching 1.88 million, the lowest in more than a century. After peaking at 6.81 million farms in 1935, the number of U.S. farms dropped sharply through the early 1970s and then began a slower decline. The most recent data show the number of U.S. farms in 2024 was down about 1 percent from the 1.90 million reported in USDA’s 2022 Census of Agriculture and 8 percent from the 2.04 million in the 2017 census. Similarly, acres of land in farms decreased to 876 million acres in 2024 from 880 million in 2022 and 900 million in 2017. The average farm size was 466 acres in 2024, slightly above 2022 and about 6 percent greater than the 440 acres recorded in the early 1970s.

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