Hello from a buried office desk. Haven’t been in the office much over the last 3 weeks, as I’ve been on the road in Minnesota and North Dakota and then at the Farm Equipment Manufacturers Assn. Convention last week in Las Vegas, where I participated in a Q&A-type panel with dealers from Iowa and New York. Hitting the road again in the morning. The aim of all this recent travel is to come back just a little smarter each time out.
We’ve seen our fair amount of concerning news lately ... on combine inventories, manufacturer layoffs and low commodity prices, to name a few. Interestingly, reflecting on the past 6 months (including a conservation tillage conference we hosted for farmers in Iowa) through the fall farm show season and through last week, most of the pessimism rests not with farmers, but the dealers. There are several reasons for that, I guess, including having to walk by your for sale used inventory every day.
On more than one occasion this year, our editors have been asked to “ease up” on our reporting. Not because our dealer audience doesn’t want the survey data and forecasts, I believe, but because of a fear of how psyches are impacted.
If you’ve been following us for any time, you know our editors do not filter, spin or soft-pedal the results of our data. Instead, we consider it our role to aggregate and gather up what we can and let readers make up their own mind on what it means to them. So what your salespeople believe is possible in a challenging market is, well, up to you. Got some opinions on that, too, but that’s another blog ...
But as I saw at the dealer panel last week, there is ample reason to get out of bed in the morning. And even maybe some guarded optimism compared to a few months back.
There is room at the table between Pollyanna and Chicken Little. As my pastor said Sunday, “what we look at determines what our troubles look like.” And after visits with those of you making it happen out there (and on the second Tuesday in November), here are a few places worth a look.
Business Competitiveness. American businesses are energized again because last week’s elections offer prospects of a better legislative and regulatory environment. Talk of the return of a Section 179 deduction that is meaningful for business and the economy is even being discussed as a possibility in the lame-duck session.
Rebounding Equipment Segments. Ag has found strength and stability in the cattle/dairy sectors (and virtually every equipment segment that supports it). There’s also a new day for the compact equipment for rural lifestyle and related users (which offer big numbers of buyers). These markets have climbed back from valleys in recent years and warrant attention once again.
Precision Ag’s Defining Movements. While many equipment dealers are still walking before running, dealers are realizing the possibilities with advanced technologies and data. When true specialists are making it out to the farm, they see farmers’ equipment needs very early — often before they are even vocalized. Get these influential specialists really tuned in, and you’ll see more and more new iron sales first identified through the precision ag specialists’ call reports.
Competing on Innovation. Manufacturers pulled incremental advancements ahead for the fall farm shows, indicating the continuation of R&D investments and intent to compete for the business. Similarly, efficiency and innovation have the chance to shine once again. Dealers can differentiate themselves from the pack by demonstrating this expertise of these solutions and can leverage it to land the conquest (or “color change”) sale.
Not the First Rodeo. On the subject of combine inventories, a few weeks back, I asked a dealer-principal with 40 years’ experience about his approach to combine inventories. "It's like eating an elephant, you bite one piece off at a time," he says, adding that today’s well-funded dealers are better equipped to deal with the problem. At each store, they'd pick out just 2-3 specific combines on the lot and rally the entire dealership around getting out to the farms and moving those 2-3 units before the end of the month — for whatever price the market responded to. Next month, you do the same thing, a few units at a time, he says, and you work it down. A key byproduct of this exercise, he says, is that the sales crew understands the new “values reality.” It’s a lot less overwhelming when you identify the steps to the solution, and recognize it won’t be solved overnight.
So while it looks like you may not have the big-ticket transactions of combines and high-horsepower tractors, dealers say you can find a receptive ear with technology specific innovations that reduce input costs. The dealers who make the choice to put their head down and COMPETE — who plan, who manage, who demo, who follow-up, who plain out hustle more than the next dealer — will find wins.
And isn’t it the way it should be?