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California Dealers Expect
Strong Demand for Equipment

By: Steve Adler, Ag Alert, California Farm Bureau Federation

February 13, 2013Farm equipment dealers who have been coming to the Colusa Farm Show for 30 years or more expressed delight over the mood emanating through the grounds as farmers and ranchers converged on the shiny new equipment to kick tires, climb into tractor cabs and check out the latest trends in irrigation.

Blessed by ideal weather and bright sunshine, the Colusa Fairgrounds were packed with farmers and ranchers who made their way among the hundreds of exhibits displaying everything from the smallest micro-sprinklers to huge tractors boasting more than 500 horsepower.

"I have been coming to the Colusa show for 30 years. Farmers made some money last year, so they are looking for some new equipment and new technology and they are going to spend some money this year," said Vinny Allen of Valley Truck and Tractor Co. of Yuba City, which sells John Deere tractors, harvesters and other equipment.

"The orchard industry is strong right now and the commodity prices are very good. And as far as the rice farmers go, they are selling all their rice, so that part is good as well. So I am optimistic for the coming next few years," he said. "We are lucky to be in the Sacramento Valley, which is very diversified. Our biggest sellers would be equipment for the orchard business and next would be the rice equipment and the big tractors and tillage tools for rice."

Allen said farm equipment prices have stayed relatively stable and have not undergone dramatic increases based on greater demand among buyers.

"Pricing does depend a little bit on supply and demand, but mainly the manufacturers have suggested list prices and we discount off of those and that is what we sell them for," he said.

For big-ticket items, those prices can climb into the hundreds of thousands of dollars. A large tractor equipped with a 510-horsepower engine can cost $375,000; a rice combine carries a $550,000 sticker price.

Joseph Martinez of Orchard Machinery Corp. of Yuba City agreed about both the optimism among show attendees and the equipment prices.

"Pricing goes up a little every year because the price of steel goes up or the price of rubber goes up, but there haven't been any big increases. This year, prices may be 1 percent higher than last year," he said.

OMC sells a variety of farm equipment, primarily for orchard growers, including harvesting equipment for pistachios, prunes, almonds and walnuts, as well as shakers, bankouts, elevators, carts, hopper trailers, hay flats and other types of agricultural trailers.

OMC has been at the Colusa show since its founding 43 years ago, and was one of the first companies at World Ag Expo, Martinez said. He described the first day of the Colusa show as "a very, very good day."

"Our sales for this year are already up compared to last year, which was our largest year ever. And it was the same the year before when it was our largest ever. So things are going very well," Martinez said, noting that his firm sells to farmers in many regions.

"Almonds and walnuts are the biggest customers, but pecans are also doing very well for us in Georgia and New Mexico. We are selling a lot of equipment there. We're selling almond equipment in Australia, as well as equipment for prunes and olives in South America," he said.

In past years, OMC typically waited to receive an equipment order before starting to build the item, Martinez said, but now the company is running double shifts just to keep up with the growing demand.

"We have gotten to the point when we operate 365 days a year and we cannot produce everything, so we have gone to two shifts. We are building some equipment on speculation, which we have never done before, but we need to do that now to keep up with the demand for the product," he said.

Many of the farmers who approach the OMC equipment display are in a buying mood, he said.

"This year seems to be a really good year for almond and walnut guys. And actually, the last couple years have been really good. But there were a few years when it wasn't as great. There was more kicking tires this year, and now the guys are saying, 'Come see me after the show, I want to buy something,'" he said.

Myron Strong of Gearmore Inc. of Chino said he also enjoyed the high spirits among show attendees. Gearmore sells implements that are pulled behind tractors.

"We handle implements for all different types of agriculture. We go from the very smallest all the way up to the big machines," Strong said. "We sell the things that make tractors look good. You can buy a tractor, but it is what you put behind it that makes it productive, whether it is a hay rake, a finishing chisel or orchard incorporator, it doesn't make any difference."

One thing that motivates buyers is the technological advancements that have been incorporated into farm equipment, he said.

"The technology has gotten to the point now where it is off the charts. Technology has improved all of this equipment and it has increased productivity. It doesn't make any difference which product it is," he said. "Technology has allowed the implement manufacturers to create better products. We are using products that didn't even exist 10 years ago, that weren't even thought of 10 years ago."

Strong summed it up this way: "Agriculture is a mature industry. But it is an industry that has a huge future because farmers and ranchers are open-minded and they want to be more productive. And in order to be more productive, implement suppliers like us have to be ahead of the game. They expect us to be ahead of the game."

(Steve Adler is associate editor of Ag Alert. He may be contacted at sadler@cfbf.com.)

Permission for use is granted, however, credit must be made to the when reprinting this item.

Posted February 15, 2013
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