Farmers can all sympathize with the desire and need for better wages. But with COVID, new regulations, and delays from the recent John Deere strike; they face a continuation of massive shortages. It is safe to say, Farmers, though sympathetic, do have some mixed feelings.
Not counting everything else that is already affecting our food supply chain, the strike has not helped matters.
During both COVID shutdowns and the strike, Farmers have had to rely more heavily than ever on both used machinery and used or after- market products for their operations. This has been creating a massive influx in pricing, especially for used machinery, which has not been seen before – with many items selling for tens of thousands of dollars more than they would have gotten otherwise just a few years ago.
One machine, according to a piece written by Phil McClausland of NBC News, cites a new purchase price for a tractor originally purchases for $109,000 was later sold this year for $143,000 at auction. And according to other industry experts, this is not an isolated incident. According to an auctioneer, farm equipment, particularly used tractors, has been selling up- wards of 30% – 50% percent more than what they would have expected just two years ago.
Matt Ackley, chief marketing officer of Ritchie Bros, states that the price index for used tractors at Richie Bros. is up by 19 percent since last year alone. This also mirrors the attendant growth of their auctions overall. IF you have used equipment for sale – expect to have more people interested, and at higher prices for quite a while longer.
Askley even stated that one machine that was struck by lightning, and fairly damaged got more than 393 bids on it, as people were desperate to get a hold of anything they thought they could work with or at least break down for spare parts. Ackely was quoted saying, “People are fighting vigorously for what’s left.”
These situations have been exacerbated by both COVID and the recent John Deere strike. And the irony being, the rush on used equipment further damages the supply chains ability to provide.
And with the strike, not only has new quality equipment been near impossible to get, the used inventory selections of many dealers has now been exhausted. And as is the rule of supply and demand within economics, that additional scarcity is driving prices even further.
Keep in mind, that more than 10,000 workers went on strike, across 14 manufacturing facilities, and the infrastructure had to be held in place as best able from management teams and engineers – dealing with the day to day customer and manufacturing issues – which simply is not sustainable long term.
“It’s got us worried for sure,” said Eric Hopkins, the senior vice president of Hundley Farms, which boasts 20,000 acres of mostly vegetables in central Florida. “They’re already low on inventory and parts right now. A strike is only going to exacerbate things, make it worse. If it lasts for a while, not only will they not have new tractors, but when you have a breakdown and there’s no parts, your tractor is just going to sit there not being able to harvest or plant a crop.”
Even in the aftermath, it will be unknown for a time how the already thinning margins of our Farmers will be affected.
With delays like this, some farmers have already seen real damage. As we all know, planting and harvest are on strict deadlines – and wait for no man. In some cases, problems like these will not be insured against either.
David Misener is reported to seen these troubles first hand. He travels the country from May to November as a custom farmer and brings equipment to help harvests other people’s crops. With tight timelines, long waits on repairs, and even longer waits for parts – he says this is a horribly unusual occurrence to deal with.
“It is extremely crucial that we harvest on a timely schedule, because it can decide whether you have something to harvest or nothing,” Misener said.
Another company cited having to wait nearly 4 weeks just to get standard hydraulic oil cooler for a new John Deere loader. The item was due in production for the longest time, but kept getting pushed back time and again. This was first due to COVID closures, and then due to the strike. The item nearly being available, but no one around to finish the work. So the machine sits for months.
Keep in mind, Farmers are not only seeing rising prices for equipment, but also: fertilizer, seed, grain and other common farm production resources.
And for newer machines, it is even more critical that supply chain and manufacturing not be hindered from the level of an Original Equipment Manufacturer because is increasingly complex for farmers to find parts and repair equipment outside those companies.
Certain manufacturers have limited farmers’ ability to repair their own tractors, combines and other field equipment. And there have been many attempts (some successful) to instate certain “Right to Repair” legislation in the last few years.
Farmers recently, through these closures, have had to rely on each other more and more for help where available outside the manufacturer. And their dealers even have had to get involved to help them communicate with one another for help, as the dealer was unable to assist.
Tim Riley, a farmer in western Kansas, stated he had to endure something similar.
“Some of the electronic parts have been really hard lately to get for the guidance systems on some of these tractors,” Riley said. “It’s really hard to do anything with how highly computer-driven they are anymore, so that’s a problem.”
He had an issue where the guidance system broke down on his machine, yet his dealer was unable to help fix the machine duo to lack of parts. So he called his neighbors, asking to dismantle and use the system off of one of their machines. And his dealer tried to help, by contacting other customers of theirs to see if any of them could lend a hand.
And his worries continue already into thoughts of next year.
“Coming into our spring season, we really need a new tractor, but they told us that we won’t be able to get it for a year to a year and a half,” he said, adding that he has had to buy a used tractor for his farm for the next few years.
Some have said that new machines they bought and paid for more than 8 months ago are still delayed. They wait and wait, having not gotten anything yet.
