Need a new combine? Order now for 2009 harvest

Monday, July 28, 2008

by SUSAN MANN

In some cases equipment may be hard to get and the practice of preordering equipment is here to stay.

“Our biggest challenge is educating customers to order stuff far enough in advance to get it for the season of use,” explains Doug Tibben, general manager of Green Tech Ag and Turf of Winchester.

“We’re sitting here today with combines ordered for 2009 and we haven’t even started 2008’s combining season,” he says.

Tibben advises farmers to talk to their equipment dealers about their needs well before the next season. In fact, farmers should be preparing their orders a year in advance.

“Part of the problem is manufacturers just simply can’t produce it fast enough,” says Beverly Leavitt, president and CEO of the Canada (East) Equipment Dealers’ Association.

Leavitt says she didn’t have any numbers to indicate the strengthened demand for equipment but “dealers talk about it all the time.”

A few months ago, manufacturers changed their philosophy to building equipment based on the actual orders received rather than building a piece of equipment and it sits around in a dealer’s yards waiting to be sold, says Bob Downham of D & S Downham Equipment Ltd. near Stratford.

For example, D & S Downham Equipment Ltd. sold a combine in December, 2007 that won’t be built until this September and then delivered to the farmer in October.

Farm equipment “supply today is very, very tight,” Downham notes. “There will be some units available if they meet your specifications.” But currently it’s impossible to get a combine built with specific features for this year. 

Sales for equipment are very strong now. “We’ve seen a real increase in planting units these past two years,” Tibben says, adding sales for all equipment are up.

In Canada, sales of 100 HP and over tractors are up 35 per cent in 2008 compared to 2007, while combine sales are up 44.4 per cent in 2008 compared to last year, Downham says.

The reasons for the increased demand are the Canadian dollar becoming par with the American dollar and high grain prices. “I think Western Canada is on quite a roll with the commodity prices and there’s probably a pent up demand,” Downham explains, adding that pent up demand isn’t as great in Ontario as in the west.

On the monetary side, Downham notes that “equipment in 2007 started to look about 20 per cent cheaper than in 2006 because our Canadian dollar went to par (with the U.S. dollar).”

The strong demand for equipment isn’t just from Canadian farmers either. In the United States, sales of 100 HP and over tractors are up 22.5 per cent this year compared to 2007. And equipment manufacturers are filling increased demand in eastern Europe and South America. “Eastern Europe is now consuming a lot of machinery that they never did before,” Downham says.

 This trend has been going on for the past two to three years. Just how long it will last is anyone’s guess. Some analysts predict the strong demand will continue for another two to five years.

“Nobody knows the answer to that question,” Tibben says. Downham agrees with Tibben. Unexpected events occurring, such as another BSE crisis, could nip the demand in the bud. 

Both Tibben and Downham say ordering equipment in advance is good for farmers. “Your best deals are that way too,” Tibben notes. “The factory gives the best incentives.”

Farmers who walk into a dealership looking for a tractor that day may not get the features they really want. “You have to take what typically is sitting in the yard,” Tibben says. Because the market is so strong, there isn’t a lot of equipment sitting around in dealers’ yards. In fact, “the yards are pretty clean right now.” BF