This morning’s e-mail was more of the same we’ve all been hearing the past several months. Agriculture is the place to be these days if you want to make some money. Except for a few farmers who say that the fertilizer people are trying to pick their pockets, I haven’t heard too many people in the ag industry complaining about business levels.

Within the first 8 e-mails I read I was told to invest in CNH, Deere, AGCO and Raven Industries. We also received notice that an equity research firm was initiating coverage of tiny Art’s Way Manufacturing because its operating earnings yield of 4.6% ranks above 53% of the other companies this company covers.

But the one item that really got my attention had a headline that read, “Three top picks for agricultural inflation,” that suggested that investors “play equipment, fertilizer and seed companies” and to stay away from the volatile commodities market.

Having lived through the recession of the mid-1970s when high unemployment met high interest rates and rising product costs, inflation is a word that will always get my attention. If you’ve been paying attention, you’ve noticed that it’s started creeping into the news a little more each day. Besides high unemployment, rising inflation will devastate an economy faster than any other dynamic.

Inflation also means that the dollar will purchase fewer goods and services. In the case of ag machinery, farmers will put off equipment purchases because they need to cover the rising costs of consumable inputs like fertilizer, fuel and seed. At the same time, the rising costs of steel and rubber add to the prices of new equipment, which in turn drives down demand for new and even good used machinery.

In this scenario, input costs become as big a competitor for the farmer’s dollar as the competing dealer down the road.

For the record, as of January 20, anhydrous is up 46%, urea +13%, liquid nitrogen +29%, DAP +34% and potash +15% since last April.

These are the times when equipment dealers need to redouble their efforts to move beyond salesmanship to being your customers’ consultant. Showing them how to minimize their use of inputs but still get great results not only reduces their competitive impact, but also reinforces the fact that you care as much about your customer’s business as you do your own.