Earlier this year Bryndon Meinhardt, regional manager of KanEquip, a 9-store New Holland and Case IH dealer based in Wamego, Kan., and Clint Schnoor, then president of Agri-Service, a 14-store AGCO dealer based in Kimberly, Idaho, sat down to discuss the differences and similarities their between their two businesses. Topics that emerged from the conversation included how their customers have changed, organic farming and what’s driving technology trends.
Livestock & Milk
Meinhardt says he’s starting to see more of the organic trend on the beef side in Kansas, but little in crops. “We grow all corn, beans and wheat, so it’s just not there — they’re not growing organic corn,” he explains.
Schnoor agrees that organic is not big in crops yet, and asks if Meinhardt feels reliable food sourcing could ever be accomplished in the grain industry, since those conversations are prevalent in consumer circles today?
In Kansas, Meinhardt says the northeast area of the state is close to denser populations, but others are very isolated. He believes that those crops are so far from a population base, that a direct food source link would be hard to determine.
“You might say it’s grown in Kansas,” he suggests, and they agree that could work, but a direct link to producer would be tough.
Transitioning to discussing organic trends among their dairy clients, Schnoor adds that he had been seeing this switch to organic contracts because of the increased profit. “The interesting part is we’re shipping organic milk from Idaho to Wisconsin for processing, and that’s a 14-hour truck ride. Talking to producers has shown that they are switching back because the premium for organic has started to diminish a lot.”
Meinhardt adds it takes multiple years and significant investment for dairies to make the switch to organic, but as Schnoor explains, the whole thing can be undone in one day.
“My No. 1 concern with immigration reform is: How do we farm the acres we have today? Because without immigrant labor, it does not happen in our marketplace. Autonomous vehicles are a logical theory that would help solve that…” – Clint Schnoor
They wonder if the trend of organic milk is strong enough to sustain this long term, as it seems it ramps up and then dies down, or if the supply becomes too great and then drives the end price lower?
“Price sensitivity gets in there too,” says Meinhardt. “There are a lot of factors that do, but it’s interesting that consumers are more into thinking about it. The last 20 years they really weren’t.”
In the Field – Seeds & Tractors
When it comes to seeds, Schnoor says it’s interesting to realize that maybe the industry has peaked in technology – modified and enhanced to the point that a maximum yield capacity has been reached. While producers can match world population needs right now with some waste, the two discuss at what point the industry would be unable to keep up.
“We hear it from our manufacturers, but less in the last couple years,” Schnoor says, explaining the message that used to be screamed out was: “‘We have to feed the world. We need to sell more iron to do that.’ Then, obviously the ag equipment industry goes down, commodity prices go down, and no one talks about it anymore. But if seed technology has hit its peak of maximizing yield, then those have to come back.”
The question they ponder is: When? In 10 years? 20?
Meinhardt takes the conversation to autonomous vehicles and puts out the question of where that technology fits into this. “Has it changed manufacturers?” he asks. “How has it changed our farmers? We might go back to all small tractors.”
Schnoor agrees and says that’s what would make sense. He considers the large equipment that used to be used to do field mapping and now the small drones that complete those tasks, and says that iron has been built up so much now, that in the autonomous world, it’s likely dealers will see smaller equipment sizes.
Meinhardt thinks the same, that small could be the way of the future, even though he says the first prototypes around today are large vehicles.
“One problem we don’t have is space,” he adds. “We have plenty of space to do whatever we want, but other countries don’t.”
These two industry professionals do say that no matter what happens, it will be interesting. Will autonomous cars bring more opportunity in the U.S., when the litigious scenarios are sorted out? Schnoor says he thinks that will happen and open more doors for autonomous research in the ag industry.
For his remote population, Meinhardt adds that this could mean more opportunity with less people. “but I wonder how you get autonomous vehicles around Kansas City and other big towns?” he asks.
Customer Labor Shortages
The discussion surrounding self-driving vehicles turns the talk to labor. They agree that manual labor will never be 100%removed from ag production. “That element has to be there,” Schnoor says. “If we put ourselves in a position where we don’t have a labor force, we’re all in trouble.”
Meinhardt says western Kansas and the dairies have been more impacted by the dairy shortage and knows this is not a statewide issue — it’s a large dilemma nationwide.
“My No. 1 concern with immigration reform is: How do we farm the acres we have today?” Schnoor ponders. “Because without immigrant labor, it does not happen in our marketplace. Autonomous vehicles are a logical theory that would help solve that.”
While the future could be more automated processes, and a less need for physical labor, he adds that if the reform happens too fast, there will be a cross roads to maneuver. And if it takes too long, there will be “a major problem to produce food.”
In the meantime, the duo will be keenly watching to see if immigration reform drives autonomous vehicle production and agree that it could. “It’s not too far-fetched,” Schnoor concludes. “If we can’t bring in the labor to get things done, we have to do something else.”
From organic dairy to an uncertain labor force, and seeds to self-driving vehicles, there’s no doubt farm equipment dealers have a pulse on the many facets of the ag industry – watching consumer trends and helping their clients manage the waves of change is just part of the job.