As long as farming is still about revenue and yield improvement instead of cutting expenses, sales will be strong.
— Jim Tibbles,
If sales of farm equipment soften in 2014 as many are suggesting, industry veteran Jim Tibbles views it as getting back to normal levels, rather than a decline.
Farm Equipment spoke last week with Tibbles, executive vice president, Osmundson Manufacturing of Perry, Iowa, about his perspective as a supplier to farm equipment manufacturers.
“We talk about a softening in farm equipment, but what it’s really doing is ‘normalizing,’” Tibbles says. “With high commodity prices and depreciation rules, it was crazy for American farmers to not invest in their machinery in recent years.
“Commodity prices are going to normalize; it will be somewhere between the $4 corn we're at now and the $7 peak. Once that occurs, the only thing that would dramatically change commodity pricing would be a plague that wipes out a chunk of our population. Because the population is demanding food, it's growing, not shrinking.
“As long as farming is still about revenue and yield improvement instead of cutting expenses, sales will be strong,” he says, citing that American farmers have been focused on revenue for the last 10 years after previously being cost-driven for 20 years.