As part of the “Conversations in Ag” special report article, “Color to Color Competition in the Same Town,” Farm Equipment arranged a meeting where two competing dealerships working the same ground could exchange views, laughs and war stories in in the same community and same customer base. Here are the words of Chris Frodel, Vice President & Co-Owner, Mid-State Equipment and Leo Johnson, Partner, Johnson Tractor, both of whose operations are headquartered in the south-central Wisconsin city of Janesville.
Interestingly, Janesville has been in the news a lot lately, not only as the home U.S. House Speaker Paul Ryan but because of the best-selling business book Janesville: An American Story (an excellent read by the way) by Washington Post writer Amy Goldstein that follows the loss of the iconic General Motors plant, which incidentally had ag implement roots.
Leo Johnson: It was a weird thing going through this community at that time (of GM’s departure). I think the last truck rolled off the line in 2008. And all of a sudden, real estate prices started to really tumble, and we get into the housing bubble. Yet our business was doing great. I'm sure yours was too. (Frodel nods). We were doing great from 2009-12 all those years. My circle of friends aren't in the farm equipment business for the most part; they're in other things, and everybody was talking about how tough things were, the layoffs and everything else. But we were having big years. So now, of course, everybody else is seeing a big increase, and we're holding our own, kind of treading water and making a few inroads here and there, but it certainly isn't anything compared to what we had. Probably 2013 was our high-water mark, I would think.
Chris Frodel: Yeah.
Johnson: And I'm sure the book probably spelled it out, there were 7,000 employees at the peak, and then another 3 or 4,000 just in time suppliers, like Lear Seating, and all of those that folded, the transport companies. You take 10,000 jobs in a town of only 50-60,000 people at that time, that's a big hit. And those were good paying jobs too.
What can you tell the rest of the country about what operating ag equipment dealerships in the Janesville ag market is like?
Frodel: Well, I think it's two-fold really. We have our sector of large acreage farmers, and as I said earlier, I think Leo and Eric and we take care of those customers very well. And then there's that next group that's very important in our demographic as well, and that's the property owners. That 90 horsepower and under tractor market is huge, and it's growing, and it requires attention as well. So, we’re making sure we're paying attention to that market. (NOTE: Mid-State Equipment is a past Rural Lifestyle Dealer of the Year recipient.)
Johnson: I agree 100% that the demographics of the area are perfect for dealerships like ours and dealerships like yours, where we have, to the east, some great farmland. The farmland to the west is somewhat challenging, and you can easily look by township, and probably count the number of large machines and the frequency of the trades. We've got some really good land and we're blessed to have that. There's a lot of dealerships, especially in Wisconsin, and you get to stretch out quite a way, you've got some good land here, and you've got a little bit of good land there, but there's very few places that have as much good land as there is just right to the east and southeast of Janesville.
You've got a city at 75,000 people, but really a marketing area of a couple hundred thousand, and we've got four hospitals in the county, and so there's plenty of doctors, there's plenty of administrators. Congressman Paul Ryan is from here, and we've got a boatload of attorneys. So, we've got a good, high-income population that can afford expensive toys. And we had the second largest Harley Davidson dealer in the nation here for quite a while. I think people are finally getting sick of motorcycles and want to buy stuff that they can use at home more, and maybe will invest in a compact utility tractor or a utility vehicle, rather than a motorcycle. So, there's just a lot of good disposable income.
The other thing that we've got in Janesville is we've got a tremendous road structure. We've got the interstate that goes right by us, north and south, we've got highway 14, and highway 11, we've got highway 26, all of those converge at Janesville, and so when you advertise something on the web, or statewide paper, or whatever, and they see you’re from Janesville, they know it’s easy to get to and that “I've been by there.” So, those are the key things that I think of Janesville.
Now, I look at our Rochelle, Ill., store, and we've got all of that, except the real high income. It's a town of more like 12,000, and there's a little manufacturing base there, but it doesn’t have near the wealth that we have in this area. What we do have down there is good farm ground in all directions. And we've got interstate 39 going north and south, and I-88 going east and west, and so once again, it's easy to get to, everybody knows where Rochelle is.
Well, then I look at our outliers, at Amboy in Illinois and Juda in Wisconsin, and Amboy, there's some good ground, but it's not as good as around Rochelle. Nobody goes to Amboy for any reason. And Juda, if you happen to be driving between Janesville and Dubuque you'll see us, but otherwise there's not really a whole lot of great reason, and the ground over there's hilly and more of a dairy sector, but that's a tough bunch. They're a hard nut to crack over there.
So, our stores, we really are set up and have two bigs and two smalls. If I was to try to buy another store, I'd rather have a big than a small. And you guys, you hit a home run when you bought Janesville. And I don't why it hadn't been recognized before that, and what took so long, but you guys did a bang-up job.
Frodel: You're right, there's some of the best land in the whole state here and east, and Dane County too, which we have. Some of the best land in the whole state. In our demographic we kind of call it the triangle, where our stores are, Madison, over to Milwaukee, northern Illinois, back over to here, that's the area with some great farmland, yet it's the most populous area too, with more wealth. So, there's a ton of property owners and commercial business, municipal business that we have the opportunity to work with.
Each store is a little different, our demographics are different, which is beneficial. Farming in this area, it's been a little depressed the last couple years. Our industrial sales have been great at some of our other stores, and our large property owner sales have helped sustain things a lot for us.
For more on the “Conversations in Ag” special collection of one-on-one dialog, click here