Making Precision Profitable
April 10, 2015
In today’s newscast we share another segment on Dave Kanicki’s interview with JCB execs on what they are looking for in new dealers, results from No-Till Farmer’s latest Operational Benchmark Study, an update on the Standardized Precision Ag Data Exchange and a report on Art’s Way Mfg.’s impressive first quarter.
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I’m managing editor Kim Schmidt, welcome to On the Record. Here’s a look at what’s currently impacting the ag equipment industry.
AFN: $50.00 −4.17
Last time we reported on JCB’s efforts to grow its ag dealer network in North America. This week, we have more from Executive Editor Dave Kanicki’s interview with Rob Marringa, general manager of dealer development, and Dan Schmidt, vice president of agricultural sales.
Marringa says they are looking for dealers who will pioneer the brand.
Schmidt says that as a multi-generational family owned business, JCB likes working with dealerships that are also family owned and shared the story of Taylor Equipment, one of its newest dealers.
We’ll have the final segment of Dave’s interview next time.
Dealers on the Move this week include new dealers for MTZ Equipment, the U.S. and Canadian distributor for Minsk Tractor Works of Belarus.
The new North American retailers include: Interstate Equipment of Valley City, N.D..; Daves Repair Farm Equipment of Hills, Minn.; MacFadden & Sons of Sharon Springs, N.Y.; Skyline Implement of Sheridan, Wyo..; Woller Equipment of Swanville, Minn..; Dons Repair Service of Ashland, Wis.; Ridgetown Farm Equipment of Ridgetown, Ont.; WGI Sales of Spruce Grove, Alta.; and West Texas Machinery in Texas.
Much like conventional farmers, growers who utilize no-tillage practices are planning to reduce their equipment purchases through the end of 2015, a trend that began to develop more than a year ago. The 436 no-tillers who responded to No-Till Farmer’s “2015 Operational Benchmark Study” survey plan to spend an average of $42,186 on farm machinery in the current year, or $36.30 per acre. This compares to $64,938, or $55.88 per acre in 2014.
Results of the survey indicate that no-till farmers will cut back spending on most major equipment categories: 11% have or are planning to purchase a tractor for the 2015 cropping season compared to 17.5% who planned to buy a tractor a year earlier. Only 4.4% plan to purchase a combine this year vs. 10% last year; 7.3% will buy a planter compared to 12% a year ago. The same trend of lower spending on equipment holds for drills, self-propelled and pull-type sprayers.
Here’s No-Till Farmer publisher Darrell Bruggink with some analysis on the report.
“Just by the numbers, our No-Till Farmer readers are anticipating they are going to cut their equipment purchases by 33% through the end of 2015. While that may seem alarming, I would add that through the history of this benchmark study, farmers have always underestimated what they plan to spend in the coming year for equipment. Then when we survey them the next year, we find they actually spent much more than they predicted. That’s likely because a lot of their actual purchasing decisions occur at the end of the year after they’ve been able to look at their yields and what they’ve earned for their crops, and they’ve had a chance to listen to what their accountants might be recommending in equipment purchases to reduce their tax burden.
“Had you talked to farmers last fall at the farm shows prior to harvest, many of them would have been very anxious about farm economics because grain prices had fallen considerably throughout the summer. But the mood was much better this spring after they got a chance to look at their financial picture following harvest. 81% of our readers say they made a net profit last year, and only 11% said they had a net loss.”
Easily transporting precision farming data in a universally useable format remains an industry challenge. But through collaboration and testing, stakeholders are moving closer toward a standardized method to share farm information among growers, dealers and other trusted advisors.
The Standardized Precision Ag Data Exchange, or SPADE project, is entering its third phase of an ongoing effort to solve some of the technological mysteries associated with precision data transfer. Working with nearly 30 agricultural suppliers of hardware, software, inputs and farm equipment, the non-profit project’s mission is to promote, enable and expand e-business in agriculture.
To accomplish these goals, SPADE members identified several objectives to establish an open-source data platform. The project’s first two phases are near completion and emphasized identification, testing and development of infrastructure for standardized data transfer.
The third phase will focus on implementation of reference tools and protocols to help companies begin to utilize the open source platform. We recently caught up with Andres Ferreyra, SPADE 2 project team lead, and Jim Wilson, SPADE project manager, who talked about the benefits the initiative will have for dealers and their farm customers.
“Creating value out of precision ag data has always been very difficult because of all that interoperability problems. What we’re trying to do here is going to open the door for dealers to provide value-added services to their growers and establish themselves as trusted advisors that can help the grower be a better professional.”
While SPADE 3 will be heavily focused on implementation, it will also include some new discovery on crop nutrition and possibly crop scouting tools, which are increasingly being utilized for gathering in-season field data.
Art’s Way Manufacturing, a diversified manufacturer of equipment serving agriculture, research, water treatment and steel cutting saw a 16.9% increase in revenue for the first quarter ended February 28.
Marc McConnell, vice chairman of Art’s Way’s board of directors says the company’s diverse product mix also contributed to the increase. Art’s Way offers nearly 20 different products, many of which are driven by the livestock and dairy sector which have seen a big jump in demand, he says.
McConnell says: “For our products such as grinder mixers, manure spreaders and hay and forage equipment, demand has been pretty strong and has more than offset the slow down in the other areas. The price of beef and other meats and milk are all up or have been higher than they have been the last several years. At the same time the inputs, like corn, are low. They’ve got more margin then they’ve had during the last several years.”
In 1945, Christian Umble Stoltzfus designed the first modern agricultural lime spreader. The spreader minimized dust clouds surrounding the farmer as lime is applied to the field. It distributed powdered lime and crushed nutrients such as bone meal and rock phosphates close to the ground through evenly spaced holes in metal booms, each extending 15 feet horizontally from the machine’s center. Today, Christian’s company, Stoltzfus Spreaders, supplies 24 spreader models to farmers worldwide.
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