In this episode of On the Record, brought to you by Associated Equipment Distributors, we look at the lawsuit the Federal Trade Commission filed against Deere & Co. over its repair business. In the Technology Corner, Noah Newman shares a glimpse of what customers are looking for from their dealers. Also in this episode, used combine inventories were up in December but were down year-over-year and ag equipment same-store sales were down in December as well.
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TRANSCRIPT
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- FTC Files Lawsuit Against Deere
- Dealers on the Move
- What Farmers Want From You: More Clinics & Better Relationships
- Used Combine Inventory Trending ‘Sideways’
- Ag Equipment Same-Store Sales Down in December
- DataPoint: Dealers Rank Precision Products as Best Bet for Improving Unit Sales
FTC Files Lawsuit Against Deere
The Federal Trade Commission filed a lawsuit against Deere & Co., on January 15 alleging the company’s repair practices violate competition law.
The FTC is concerned the OEM has withheld key information and diagnostic tools from farmers and independent repair shops, reports Bloomberg.
The filing claims:
“Deere’s increasingly sophisticated agricultural equipment requires a software tool to diagnose and repair problems that relate to electronic functions, and only Deere has the information and knowledge to create this essential tool. By making this tool available only to Deere dealers, Deere forces farmers to turn to Deere dealers for critical repairs rather than complete the repairs themselves or choose an [independent repair shop] that may be cheaper, closer, faster, or more trusted.”
The suit goes on to claim that Deere’s business practices are unlawful and have inflated farmers’ repair costs and “degraded farmers’ ability to obtain timely repairs, which is especially critical in times of planting and harvesting.”
The state of Illinois and state of Minnesota join the FTC as plaintiffs in the lawsuit.
In response to the filing, Deere released a statement that in part says,
“This lawsuit, filed on the eve of a change in Administration, ignores the Company’s long-standing commitment to customer self-repair and the consistent progress and innovation we have made over time, including the launch of Equipment Mobile in 2023 and the previously announced launch of new capabilities for John Deere Operations Center™ later this year. The complaint is based on flagrant misrepresentations of the facts and fatally flawed legal theories, and it punishes innovation and pro-competitive product design. John Deere will vigorously defend itself against this baseless lawsuit.”
In addition, Deere said:
As FTC Commissioner Andrew Ferguson (soon to be the FTC’s Chairman) explained in his dissenting statement, the lawsuit “appears to be the result of brazen partisanship,” “lends to the suit the stench of partisan motivation,” and appears “taken in haste to beat President Trump into office.” Commissioner Ferguson went on to state that “we simply do not have the evidence to file this Complaint with any real confidence of our ultimate chance of success.” Commissioner Melissa Holyoak joined in Commissioner Ferguson’s dissenting statement, both of whom voted against the filing of the complaint.
Deere’s full response is on the Farm Equipment website in our on-going coverage of the right to repair battle.
Dealers on the Move
This week’s Dealers on the Move is Springdale Tractor.
Arkansas based Kubota dealer Springdale Tractor Company has acquired Texas dealer Schaffer Kubota. Schaffer Kubota will be renamed Kubota of Dallas. The Springdale group has 6 other locations in Arkansas, Missouri and Oklahoma.
What Farmers Want From You: More Clinics & Better Relationships
Dealers got a glimpse inside the customer’s mind last week during a farmer-to-dealer panel at the Precision Farming Dealer Summit. I asked our panelists, Mike Starkey and Loran Steinlage, for some words of advice for precision dealers in 2025. Here’s what they said.
“If something goes down and it’s something I can’t figure out, I want somebody to fix it, and I want them to fix it fast. That was a big issue for me in the past when I had the 20/20 monitor. I didn’t have the patience. Farmers aren’t very patient, let’s put it that way. I didn’t have the patience to wait the whole day for something that could’ve been fixed in an hour. That’s number one.”
“A workshop of some sort would also be nice. You don’t have to have a lunch, but for the customers’ benefits, I think that would be something that I would present. Also, as an incentive, I like the idea of seeking out customers that are willing to try things. Having a demo of some sort, I know that’s quite a bit of an investment, that would be the icing on the cake.”
– Mike Starkey, Farmer, Brownsburg, Ind.
“Play the long game would be the best advice I’d leave you with. If you’re in it to make that quick buck, it’s not going to last. If your customer is in it for that quick buck, it’s not going to last. It’s that relationship that you have to foster and build. It’s that simple.”
– Loran Steinlage, Farmer, West Union, Iowa
Loran says he’s learned how critical relationships are over the years, and that If you say you’re going to do something, then do it.
Used Combine Inventory Trending ‘Sideways’
According to the newest Sandhills Global market reports, auction values for used equipment, trucks and trailers in Sandhills' U.S. marketplaces were up overall in December auctions, reflecting a typical end-of-year trend. Auction values for late-model assets, however, continue to depreciate dramatically. For example, 2021 and 2022 model year combine harvesters were 21% to 25% lower in December compared to year-ago values.
Assessing concerns regarding the used agricultural equipment market specifically, TractorHouse Manager Ryan Dolezal says, “We don’t believe the farm equipment market has bottomed out. Several variables, such as tariffs, trade wars, and commodity prices, remain to play out. Sellers should remain vigilant about these variables and their possible effects and update prices accordingly. Prices that were reasonable six months ago may no longer be competitive.”
Inventory levels of used combines in Sandhills’ U.S. marketplaces were up 3.19% month-over-month and trending sideways in December but were 2.76% lower than year-ago levels.
Asking values increased 2.09% month-over-month, maintaining a steady trend, but were 3.73% lower year-over-year.
Ag Equipment Same-Store Sales Down in December
Ag equipment dealer same-store sales were down in December on a dollars basis, according to data collected by DA Davidson. Other same-store data reports on units, whereas the DA Davidson data is based on sales, notes analyst Michael Shlisky.
North American ag dealer same-store sales were down 15% year-over-year in December, but improved compared to November.
Importantly, Shlisky says, December is seasonally one of the least-important months for retail sales for dealers, given the winter season.
Shklisky notes that the downside continues to be seen most starkly in Canada, which was down 34%. In the key Midwest region, sales were down 17%, in line with November.
Same-store sales were down 15.5% in CNH's 4Q. Shlisky says, at this point in the year, they are not expecting much improvement. “Comps get substantially easier during Deer's fiscal second quarter of 2025, as North American farmers return to their fields to plant.”
Data Point: Dealers Rank Precision Products as Best Bet for Improving Unit Sales
This week’s Data Point is brought to you by the Dealership Minds Summit.
According to the 2025 Dealer Business Outlook & Trends report, dealers are most optimistic about their precision technology and equipment sales for 2025 in terms of improving unit sales. Nearly 88% of dealers said their precision product unit sales would be as good or better than they were in 2024, with about 35% of dealers saying their unit sales would be up at least 2% over 2024.
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