Tractor attraction

Friday, February 5, 2016

by SUSAN MANN

You’d think it would be a recipe for attraction, farmer-style.

Canadian dollar worth a little north of two thirds of an American dollar? Check.

Used farm equipment above the Canadian/U.S. border? Check.

The combination has enticed some American buyers to Ontario for used farm equipment, but not like it did 10 years ago, says Wayne Bobier, co-owner and sales manager at C.L. Benninger Equipment (1995) Ltd., a Chatham-based equipment dealership.

“Ten years ago, when our dollar was at this same point for a long period of time then all of the Canadian dealers were advertising in the United States and selling a lot of stuff to the U.S. buyers,” he says. The Canadian dollar is currently valued at 72 cents U.S.

He says it will take two to three consecutive years of the Canadian dollar being at roughly the same value it is now compared to the American dollar for that to occur again. “And the U.S. agricultural economy has to get stronger for them (American farmers) to be wanting to buy,” he adds.

Bobier says he has talked to dealers in Ohio, Nebraska and Tennessee who said their business was down by 50 per cent last year. “Their yards are full of equipment and they’re discounting like crazy.”

If the Canadian dollar stays low, “then our used equipment will be attractive to them but it hasn’t happened yet, in my opinion,” he says.

Bobier says there haven’t been any Americans looking to buy equipment at his dealership.

Bob Weagant, president of Weagant Farm Supplies Limited of Eastern Ontario, says some American farmers are buying used equipment and pick-up trucks in Ontario but the American dealers and jockeys aren’t.

Jockeys are people in the industry located in an office in Iowa, for example, who would buy 10 used tractors in Ontario and other provinces and then sell them in Texas or other parts of the United States. “He would just jockey the stuff back and forth. Whenever there’s a 40- per-cent dollar differential and if there’s a market there, those guys should be buying. But they’re not buying here.”  

Michael Hahn, president of Hahn Farms Ltd. of Stratford, says used equipment prices in Canada will increase due to the increased demand from the Americans and to increased prices for new equipment. “When the new price goes up the used price goes with it.”

Hahn says new equipment prices are going up because of the exchange rate. “Most of it (the new equipment) is built or sold in U.S. dollars.”

Similar to the other dealership spokesmen, Hahn says there are a few more American buyers now “but I wouldn’t say there was a lot more.”
 
Beverly Leavitt, president and CEO of the Canada East Equipment Dealers’ Association based in Barrie, says cross-border shopping of mainly used farm equipment “is pretty much the norm in the industry. When the Canadian dollar is low, then people from the United States do come over here to do their purchases. When it’s high, we find our Canadian farmers going across the border to buy equipment in the States.” However, “it’s not like it’s a mass exodus or anything like that.”

Leavitt says it’s mostly dealers along the Canadian/U.S. border that see the cross-border equipment shoppers. BF