On The Record: CNH Presents New Contract to Dealer Network

In today's newscast we look at new dealer contracts from CNH, the high dollar’s impact on equipment sales, DigiFarm's new Apple MFi certified Bluetooth device, the growing popularity of leasing farm equipment, and a look at the used equipment market from Greg Peterson.



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I'm assistant editor Jaime Elftman, filling in for Kim Schmidt who is on the road in Canada this week, welcome to On the Record. Here’s a look at what's currently impacting the ag equipment industry.


FARM
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TITN: $13.31 +0.12

TSCO: $86.69 −3.02
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Closing Stocks as of 9/11/15 (Compared to Close on 8/20/15)

CNH Adds 'Teeth' to Dealer Agreement

In July, CNH announced a new agreement for each of its dealer networks that dealers say gives the OEM a lot more teeth in the arrangements with the dealers who represent the CNH brands.

According to legal counsel Seigfreid Bingham, who represents Western Equipment Dealers Association and NAEDA, the contract represents several significant departures. Because Case dealers have not signed new forms of agreements since the mid-1990s, the changes are more dramatic for Case ag and construction dealers than on the New Holland side.

CNH will ask dealers to sign the new agreements in connection with ownership transfers, location changes, product line additions, and have all dealers on the new contract by December 2016.

Several dealers Ag Equipment Intelligence contacted had not reviewed the new agreements. Ag Equipment Intelligence is looking into the language and its impact on farm equipment sales and service, and will be doing expanded coverage on it for subscribers to the monthly Ag Equipment Intelligence newsletter. An article on the top 5 changes in the agreement will appear in the September 15 print edition.

Dealers on the Move

Dealers on the Move this week include Jungclaus Implement, Van Wall Equipment, Nebraska Harvest Center, Canada West Harvest Center, Albany Tractor Co. and Townline Equipment.

Jungclaus Implement of Glencoe, Minn., now offers JCB’s equipment line.

John Deere dealer Van Wall Equipment has purchased 3 locations from AgriVision Equipment Group in Knoxville, Indianola and Albia, Iowa.

The newly rebuilt Claas dealership, Nebraska Harvest Center, is now open for business in Wayne, Neb., after being destroyed nearly two years ago by a tornado.

A new Claas dealership, Canada West Harvest Centre, has opened a permanent location in Emerald Park, Sask., with a second interim location opening in Saskatoon.

Eight-store John Deere dealer Albany Tractor Co. has opened a new store in Flint, Ga., and has changed its name to Flint Equipment Co.

Kubota dealer Townline Equipment of Plainfield, N.H., acquired Giddings Mfg. of Pittsford, Vt.

High Dollar's Impact on Equipment Sales

Rabobank released a report in August on the impacts and implications on agriculture of an appreciating U.S. dollar. We had the opportunity during the Farm Progress Show to speak with Stephen Nicholson, vice president, Food & Agribusiness Research and Advisory with Rabobank and the author of the report.

He discussed how the high dollar relates to commodity prices and what that ultimately means for farm equipment sales.

DigiFarm's Bluetooth Announcement

This year’s Farm Progress Show was awash in state-of-the-art agricultural technology, with an emphasis on mobile and app-based products. Among the more unique releases was Monticello, Iowa-based DigiFarm VBN’s announcement of the industry’s first Apple MFi certified Bluetooth Device called the Beacon v3.0 and a companion iOS NTRIP App. The tool streams RTK correction data to any GPS receiver without needing radios or cellular modems — using an iPad in the cab instead.

Due to the work in recent years of companies like Precision Planting, tablets, specifically the iPad, have become widely used as in-cab tools. The move by DigiFarm is another step toward manufacturers and service providers targeting tablets and other mobile devices as platforms for their products.

We caught up with DigiFarm’s president, David Dusanek, at the Farm Progress Show where he noted the benefits seen by farmers when costly extra data plans are eliminated and modems are done away with.

The Beacon v3.0 breaks ground as the first Apple MFi certified Bluetooth Device used for RTK corrections. MFi, which stands for ‘made for iPhone, iPod or iPad’, is an Apple licensing program for developers of hard- and software components that work with iDevices. If Digifarm’s new device is successful, achieving this certification may soon become a developer trend in it’s own right.

Leasing Gains Popularity

The growth in leasing of farm machinery was noted by analysts covering this year’s Farm Progress Show. Mig Dobre, analyst with Baird Equity Research, said in a note to investors that OEM’s at the show highlighted the residual risk from increased leasing activity.

Dobre says that in the past fiscal year, less than 15% of Deere’s equipment was leased and 20% of CNH’s row-crop tractors are leased.

“Management teams all expressed confidence that leasing residual values would hold up and not become outsized liabilities down the road,” Dobre said.

Greg Peterson on Used Equipment

On the Record welcomes our newest content contributor Greg Peterson, who will share used equipment values with Farm Equipment and Ag Equipment Intelligence readers as a result of Farm Equipment’s acquisition of Implement & Tractor.

We caught up with Greg last week at the Farm Progress Show.

Ag Equipment Archives

In 1946, John Deere introduced the world’s first automatic wire-tie baler, the 116W.

This new baler cut the manpower required to bale hay from two to four men down to just the tractor operator, allowing more farmhands to help collect the bales from the field. An estimated 3,500 were produced in its first year, but all were recalled to modify the wire-tying system.

We always welcome your feedback. If you have any comments or suggestions you can send them to jelftman@lesspub.com. Thanks for watching, I’ll see you next time.

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