During last week’s Marketing & Distribution Convention in Houston, I was pleased to report to our Board of Directors the positive results of the Association’s fiscal year, which ended August 31. I’d like to share that information with you, too.
Financial Results: While we were not immune to the downturn that has affected most of our members, operating revenues for the fiscal year were the second highest in the past decade, all with no increase in our membership dues schedule. Expenses for the year were well below budget, which allowed the Association to strengthen our reserves for the seventh consecutive year.
As we build our reserves, we become even better prepared to meet challenges that could require immediate expenses, such as responding to proposed legislation or regulation that threatens members.
Membership Results: Even in a slower ag economy, 48 new companies became members during the year, keeping our total membership near 700. While this number is down slightly from last year, it shows significant growth from 2011, when total membership stood at 615.
Mergers, acquisitions, and the economic downturn slowed our growth, but recent efforts to expand our reach to manufacturers of product lines where we have not been strong in the past are showing positive results and soon will expand our base of shortline manufacturers.
Meeting Attendance: Participation in both our Supply Summit & Showcase and our Marketing & Distribution Convention remain strong. We are committed to bringing new programming to our meetings and expect to see continued growth this year in both content and attendance at the Supply Summit in Omaha.
Major New Member Services: Over the past few years, our Association’s leadership has sought to respond to member requests for statistical and benchmarking industry data. Last week, our board approved a contract with Industry Insights to conduct a confidential Business Profile & Financial Performance Survey in early 2018. The confidential survey will address company demographics, operations, human resources and basic financial results. The survey is designed to limit the time required to complete it while still providing the data members want.
Please note the Association office, staff and leadership will not be involved in collecting data or reporting results. The CPA firm leading the survey will manage the complete process. You will see a letter of introduction from us, then the compiled, anonymous data.
Improved Farm Show Data/Evaluations: Our Education Committee, with the assistance of several members of the Farm Show Council, met in Houston to plan improvements to our farm show database. The expanded database will include information about show size, scope and basic cost and services. We will add to this data evaluations and comments from members who have displayed at the shows. Expect to see improvements in spring 2018, with evaluation data to follow later in the year.
None of the above happens without the contributions of members. We have been blessed over the years with great volunteer leadership, and today, we call on additional members to become involved.
Be it by participating in the surveys mentioned above, becoming active on a committees or product council, or taking a leadership position, your involvement has never been more needed.
Stay tuned to this publication for opportunities to get involved.
The Farm Equipment Manufacturers Association elected two new members to its 16-person Board of Directors last week.
Serving as Association president for 2018 will be Stan McFarlane, who is vice president for McFarlane Manufacturing Co., Inc., in Sauk City, Wis.
He oversees the company’s tillage equipment manufacturing and structural steel fabrication.
Serving with McFarlane for one-year terms on the executive committee will be:
First Vice President -
president of Thurston Manufacturing Co. in Thurston, Neb.
Second Vice President -
vice president and
co-owner of Danuser Machine Co. in Fulton, Mo.
Matt Westendorf, general manager of Westendorf Manufacturing Co. in Onawa, Iowa.
Andrew Cummings, president of T.G. Schmeiser Co. in Selma, Calif.
|Paul Jeffrey, general manager at MacDon in Kansas City, completed his term as president and will transition to an ex officio role on the executive committee.|
Member companies elected two men to their first terms on the board:
Mark Lamboley is director of business development for HCC, Inc.,
in Mendota, Ill. HCC designs and manufactures reels and sieves for
combines. It has operations in North America and South America,
specifically Curitiba, Brazil.
HCC also owns Triple-C in Kansas, which manufactures attachments
for skid steer and three-point applications.
Randy R. Reinke is president and CEO of Custom Products of Litchfield,
a sheet metal fabricator specializing in the design and manufacture of
cabs and roll bars for the off-highway vehicle market. Reinke also owns
and manages Reinke Properties.
The men were elected to three-year terms during the 2017 Marketing & Distribution Convention.
“This Association continues to thrive because so many individuals have been willing to give us their time, energy, and creativity,” said Executive Vice President Vernon Schmidt. “I look forward to great things from this dedicated group.”
A member of Canada’s NAFTA Advisory Council says it is time to be worried about the negotiations, which begin again this week.
“I’m hearing that people are extremely worried about where this is going, and people use language behind the scenes like ‘it looks like the Americans are driving towards a cliff on this, and Canada will have to follow,’ and we don’t want to see that,” council member Rona Ambrose said in an interview on CTV, a Canadian television network.
Ambrose said it all came to bear in the last round of NAFTA talks that concluded in Washington, D.C., in mid-October.
Farm groups asking
There, the American trade negotiators put demands on the table, including on auto and dairy, that Foreign Affairs Minister Chrystia Freeland called “unconventional” and “troubling” in the closing news conference.
“The American’s demands are completely unreasonable. They may not seem unreasonable for the Americans but they are definitely unreasonable for the Mexicans and Canadians, and they put NAFTA at risk,” said Ambrose, who prior to joining the NAFTA team was interim leader of the federal Conservatives.
“I actually think it’s time for us to be worried, I think we are worried behind the scenes, and I think we have to start activating everyone who understands why it matters that this agreement cannot fall apart, and that means on both sides of the border,” Ambrose said.
Gary Doer, former Canadian ambassador to the U.S., said it is imperative Canada figures out a win for all sides, and one that’s not detrimental to Canadian business.
Doer said Canada should leverage the argument that a NAFTA pullout will have consequences south of the border.
“It won’t be without consequences in the United States as well,” he said. “It’s not necessarily a win to get a one-day headline and have unemployment in your own country,” he said of the possibility of the U.S. leaving the deal.
Source: CTV News
More than 450 executives who represent the farm equipment supply chain gathered in Houston last week. They were distributors in search of new product lines and manufacturers seeking new marketing opportunities.
Among events was a farmer panel (right), where participants asked farmers questions about how they shop for farm equipment, and a welcome reception (below) to reconnect with industry colleagues.
The meeting also allowed time and space for participants to set up their own meetings
We will gather in Minneapolis for the 2018 Marketing & Distribution Convention.
But first, mark your calendars for the Supply Summit & Showcase. It is April 18 to 20 at the Hilton in Omaha, Neb. Stay tuned for details in the winter issue of Ag Innovator magazine.
A recent decision from a federal appeals court is a warning to employers to make sure their policies follow the Fair Labor Standards Act (FLSA), according to legal experts. The act entitles workers to be paid for breaks of 20 minutes or less.
The ruling relates to a Pennsylvania case in which a firm that publishes, distributes and sells business publications introduced a policy that paid salespeople only for the time in which they were logged onto their workstation computers. Salespeople earned an hourly wage and bonuses based on sales per hour.
The ruling from the 3rd U.S. Circuit Court of Appeals said that the FLSA does not require employers to provide employees with breaks, but “if an employer chooses to provide short breaks of five to 20 minutes, the employer is required to compensate employees for such breaks as hours worked.”
The U.S. Labor Secretary filed the suit against the company alleging in part that its owner failed to pay the federal minimum wage. An attorney familiar with the case said the break time issue became relevant because, if the salespeople were not paid for breaks, their hourly rate fell below the line.
The attorney said the issue was “whether these guys were making the minimum wage because these folks were working a couple hours a week, and if they’re not being paid for that 20-minute time, then their hourly rate may fall below the minimum wage, and that is a Fair Labor Standards Act violation.”
The opinion issued by the court said that the DOL “has explicitly and repeatedly stated that employees must be paid for breaks of twenty minutes or less.”
The attorney said “the big overarching takeaway is that when it comes to breaks short and long, have policies, make sure the policies follow the law, and make sure your employees and your managers understand those policies.” Source: Business Insurance
Alamo Group reported record net income and net sales for the quarter that ended September 30 as well as for the first nine months of the year.
Net income increased by 25.4 percent for the quarter and 26.6 percent for the first nine months compared to the same periods last year. Net sales were up by 10.9 percent for the quarter and 4.7 percent for the nine months.
Sales in agriculture showed the greatest growth with a 15 percent increase for the quarter. Alamo reported a 9.2 percent increase in sales in its industrial division and 10.3 percent in its Europe division; both numbers reflect change for the quarter.
“The third quarter of 2017 was certainly a very good quarter for Alamo Group,” President and CEO Ron Robinson said. “While sales growth for the last two years has been constrained due to a variety of headwinds, as we indicated last quarter, we started to see some growth in our markets, and this was evident in our third quarter results.”
Member since 1952 - alamo-group.com
Kubota has confirmed it plans to build a North American Distribution Center in Kansas. It intends to buy 203 acres near the company’s current leased facility in Edgerton, Kansas. It will design and build a pair of 1-million-square-foot facilities. The center will expand Kubota’s distribution capacity and streamline logistics processes, the company said.
“After more than two years of operating in Kansas with such positive results, we are now confident about building more infrastructure here,” said Masato Yoshikawa, president and CEO of Kubota Tractor Corp. In addition to the logistics facilities, Kubota also announced it will establish a fifth operational division and sales office in Edgerton. The new Midwest Division office will be in the same space as the parts and whole-good operations.
Mike Jacobson, a 17-year Kubota veteran, will serve as director and division manager of this new division effective January 1.
The new Midwest Division expands the company’s divisional operation structure, which today includes offices in Suwanee, Ga.; Fort Worth, Texas; Columbus, Ohio; and, Lodi, Calif., and will continue to provide regional support to Kubota dealers.
Existing labor shortages may be exacerbated by the impact of hurricanes Harvey, Irma and Maria.
“Prior to the hurricanes making landfall in the U.S., if you look at the macroeconomics of areas like Texas and Florida, there has been a shortage of skilled labor, particularly in construction,” said an executive from an insurance and broking firm.
Since the storms, demand is greater.
Moody Investors Service said recently that the hurricanes, plus the California wildfires, could drive up construction prices nationwide.
The disasters also have brought attention to the challenges of material management. Industry experts are encouraging contractors to understand their subcontractors’ supply chain and assure materials are verified and inspected.
Source: Business Insurance
The Cuba Standard reported recently that Deere executives signed an agreement at the Havana Fair earlier this month to supply farm tractors to Cuba. This is the first direct sale of U.S. machines to Cuba in more than 50 years.
“Deere believes that improvements in the Cuban agricultural sector would improve the availability and affordability of food for the general population,” said Deere spokesman Ken Golden. “The dairy, row-crop and fruit and vegetable are sectors of specific emphasis.”
The announcement came a day after a Caterpillar dealer announced it will open a distribution center at the Mariel Special Development Zone, becoming the first U.S. company to have a physical presence in the high-profile development project.
Both companies seem to be racing to establish a foothold in Cuba before the Trump administration places restrictions on such a possibility. In July, President Trump announced he would prohibit sales to armed forces-controlled entities.
A first shipment of Deere tractors is scheduled to arrive in Cuba this month.
Source: Cuba Standard
Farm Equipment Manufacturers Association's Endorsed Insurance Products and Service
Association's Service Corporation, Inc.
After dipping for the past three quarters, farm lending picked up in the third quarter of 2017, says data from the Federal Reserve.
The recent stabilization in lending activity suggests that borrowers and lenders have adjusted to reduced profit margins and spending.
The report from the Federal Reserve Ag Finance Databook also said:
The volume of non-real estate farm loans originated in the third quarter increased by about 2 percent from the previous year.
The volume of loans used to pay for current operating expenses increased 15 percent from the previous year, whereas the volume of loans used to finance livestock and equipment purchases declined.
Operating loans have accounted for nearly 60 percent of the total volume of non-real estate farm loans over the past four quarters, the highest in the 40-year survey history. Conversely, the share of other loans has fallen to levels last seen in the early 1990s.
The average maturity on loans used for operating expenses over the past four quarters has declined 4 percent from the previous year, but the duration has remained one of the highest in survey history at 12 months. Similarly, maturities for livestock and farm machinery loans have declined in recent quarters; despite the decline, maturities were both higher than the previous year and historically high.
- Bankers have raised the risk ratings slightly on new non-real estate farm loans.
Source: Federal Reserve Bank of Kansas City
Results of Creighton University’s monthly survey of rural mainstreet provided reasons for optimism. The overall index improved from September, as did the farm equipment sales index. Both indices remain below growth neutral.
The Rural Mainstreet Index for October was 45.3, compared to 39.6 in September. The farm equipment sales index increased from 27.4 in September to 29.3 in October. The survey, which ranges between zero and 100, is considered growth neutral at 50.
The confidence index, which reflects expectations for the economy six months out, increased to 37 from 36.1 in September.
“Concerns about trade, especially current NAFTA negotiations, and low agriculture commodity prices, impaired bankers’ economic outlook for the month,” said Ernie Goss, who is the chair in regional economics at the Heider College of Business at Creighton University.
Goss said weak farm income and low commodity prices continue to drag on the agriculture economy.
The survey asked bankers to compare current spot prices for a bushel of corn to break even, and only 2.4 percent of bankers indicated that prices between $3.50 and $3.75 were above break even. Approximately 45.2 percent reported current spot prices were below break even.
The university’s monthly survey asks bank presidents and CEOs in agriculturally and energy-dependent portions of a 10-state region their thoughts on current economic conditions in their communities. The survey includes Colorado, Illinois, Iowa, Kansas, Minnesota, Missouri, Nebraska, North Dakota, South Dakota and Wyoming.
Rocky Mountain Dealerships Inc. reported a strong third quarter. The company said the three months that ended September 30 were the best it had posted since 2012. It said all divisions contributed to a 7.3 percent year-over-year increase in sales.
“Our focus on sales and inventory management continues to allow us to reduce debt, contain costs, increase inventory turnover and, by extension, increase our return on assets,” said Garrett Ganden, president and CEO.
“At a high level,” he said, “the forward economic indicators for our sector are strong. There is mounting evidence that the Western Canadian market for agricultural equipment has turned around and is returning to normal levels after being depressed for a number of years.”
As of September 30, the dealership’s equipment inventory declined by 8.5 percent compared to the same date last year. Inventory turnover increased 16 percent compared to the same quarter.
Association's Service Corporation
Acquisitions and a Partnership
AgriVision - Equipment Group - ICON Ag & Turf
Riechmann Bros. - Green/Line Equipment
Koenig Equipment - Smith Implements
Van Wall Equipment - Phelps Implement >>>
AgriVision Equipment Group, a Deere dealer, intends to acquire ICON Ag & Turf stores in January. The acquisition will add locations in Doon, Ireton, Lawton, Le Mars and Paullina, Iowa, to AgriVision’s 10 current locations in Southwest Iowa, Southeast Nebraska, and Northwest Missouri.
Riechmann Bros. in Okawville, Ill., has acquired Green/Line Equipment in Farina, Ill. The Farina location is Reichmanns fourth. The company also has shops in Breese and Centralia, Ill.
Koenig Equipment. has completed its acquisition of Smith Implements. The sale was final October 31. Koenig Equipment now owns and operates 13 Deere dealerships across Ohio and Indiana.
Van Wall Equipment and Phelps Implement, Deere dealers with a similar history of family ownership, have agreed to become one company. The combined dealership organization will include the current Phelps Implement locations of Green, Grundy Center, Hampton, and Hubbard, Iowa. Those locations officially began operating as Van Wall Equipment on Monday (Nov. 13). The Van Wall Equipment operation now includes 25 Midwest locations.
Unverferth Mfg. Co., Inc. has promoted Andy Unverferth to marketing manager, the company announced.
Unverferth joined the company in 2009. As marketing manager, he will be responsible for overall brand development and for organizing, coordinating and executing marketing initiatives for the company’s brands.
Andy Unverferth also serves as president of the Ohio chapter of the National Agri-Marketing Association, the nation’s largest association for agribusiness professionals.
Unverferth Mfg. Co. is a family-owned manufacturer and marketer of tillage, seed, and hay- and grain-handling equipment, along with pull-type sprayers, fertilizer applicators and agricultural dual, triple and specialty wheel products.
Member since 1975 - unverferth.com
CNH Industrial has reported a 15.3 percent increase in consolidated revenues for the third quarter of 2017.
The company also reported increases in net sales for agricultural equipment —12.4 percent—and industrial activities—15.9 percent. Net sales increased in two of CNH’s three regions. Sales were flat in NAFTA but enjoyed increases in Europe/Middle East/Africa, Latin America, and the Asia Pacific region, primarily India.
AGCO reported a 12.8 percent increase in net sales for the third quarter of 2017. Net sales for the first nine months of the year increased by 8.7 percent.
The company’s quarterly results showed a 6.7 percent increase in sales in North America, a 15.2 percent increase in Europe/Middle East, a 4.5 percent increase in South America, and a 29.4 percent increase in Asia/Pacific/Africa.
The nine-month comparison showed a 1.1 percent dip in North American sales.
The Association sends a big thanks to members celebrating milestone anniversaries in November and a special welcome to the companies just joining us.
Recent Membership Applicants
November Member Anniversaries:
Maruichi Leavitt Pipe & Tube
Supreme International Limited
Hillco Technologies, Inc.
Blueline Mfg., Inc.
Mann & Machine
Canada-based Brandt is talking with a taxing body in Central Illinois about the possibility of a tax abatement to move onto a site currently occupied by Kongskilde. Both companies are members of the Association.
A radio report said Brandt plans to bring between 300 to 500 jobs to Central Illinois. Kongskilde plans to move from this property between Hudson and Normal to another location in Bloomington, the report said.
CNH Industrial acquired Kongskilde’s grass and soil business—including the Hudson operation—earlier this year.
Brandt - Member since 1991 brandt.ca
Kongskilde - Member since 1964 - kongskilde-industries.com
Firestone Ag recently announced winners in its What Drives You? social media contest. The contest was designed to celebrate hardworking farmers in conjunction with the tire makers’ Farm Hard campaign launched earlier this year. The campaign applauds farmers who push through challenges to get a job done.
“We are proud of the farmers we have the privilege of partnering with. This contest was a fun way to show their commitment to and grit for farming,” said Cindy Ridge, brand manager, Firestone Ag. “It’s a great opportunity to highlight their day-to-day experiences and achievements.”
The winners chosen for their “farm hard” stories will receive a $2,500 voucher for Firestone Ag products and be featured in the company’s 2018 marketing materials.
Member since 2000 - firestoneag.com
The Purdue University/CME Group Ag Economy Barometer landed at 135 in October, up three points from September. It represented the third-highest reading since data collection began in fall 2015.
Producers also rated prices for used farm machinery at the highest level since the inception of the project.
In October, 58 percent of farmers who responded to the survey rated used farm machinery prices as high.
As you’d expect, the share of producers rating prices as low fell to an all-time survey low of 11 percent.
Purdue/CME Group says the shift in perception suggests used farm machine values are strengthening. Survey organizers add that some Corn Belt farm equipment dealers report improved sales volumes this year.
In the overall index, the improvement was driven by the Index of Future Expectations, which increased from 130 in September to 137 in October. The Index of Future Expectations is one of the barometer’s two sub-indices. The other, the Index of Current Conditions, weakened slightly.
Each quarter, producers are asked their expectations for crop prices in the coming year. Compared to July, fewer producers expect higher corn, soybean and wheat prices in the next 12 months. However, fewer producers also expect crop prices to decline over the next year.
Lessiter Media, publishers of Farm Equipment, Precision Farming Dealer and No-Till Farmer, has published the debut print edition of Strip-Till Farmer.
This quarterly print publication is free to qualified farm operators in North America and delivers a mix of strip-till content on farm experience, management topics and trending practices in strip-till. It is fully supported by five exclusive sponsors.
“This new print vehicle exists to share practices, methods and information on strip-till productivity, efficiency and profitability,” says Jack Zemlicka, managing editor of Strip-Till Farmer. “As interest in strip-till and conservation tillage practices continue to increase, there is a growing demand for actionable information to help these farmers evolve and improve.”
Member since 1970 - farm-equipment.com
Groups representing farmers across the heartland have begun to move aggressively to save a the North American Free Trade Agreement—a pact they consider crucial to their industry.
The once-powerful agricultural lobby was somewhat muted in its warnings about losing a significant portion of the $17.9 billion worth of agricultural products exported last year to Mexico—the nation’s third-largest trading partner—believing that the administration would agree on other aspects of NAFTA without damaging agricultural trade.
Now, with the president considering a formal intent to withdraw from the deal, farm groups say it’s clear that their pleas to save the pact have not been heard.
“I’ve come to believe this administration is determined to end NAFTA,” said Gordon Stoner, a fourth-generation Montana wheat farmer who leads the National Association of Wheat Growers.
Many farm groups are mobilizing to stave off what most believe would be a disaster for American farmers.
A reversal on NAFTA would suggest the industry has little influence over the current administration. There’s also a growing recognition that the agriculture industry, while united on the importance of NAFTA, may have failed to coordinate an effective strategy to counter the threat posed to the trade pact.
“The importance of trade to economic growth in the food and ag sector is so fundamental that there tends to be an assumption that everyone understands that,” one association leader told POLITICO. “We can get lazy about meeting our educational challenge in explaining that part of our industry to others.”
But the growing frustration of the agriculture industry has hit what some consider a turning point. It recently released a letter directly challenging Commerce Secretary Wilbur Ross after he publicly disputed the idea that a NAFTA withdrawal would cause a serious drop in exports.
The letter also responded to the possibility that Trump would send notice that the U.S. would withdraw from the pact in order to pressure Canada and Mexico to agree to U.S. demands. Agriculture groups say such a move would be cataclysmic and render meaningless the administration’s continuing promise to “do no harm” to agriculture during this renegotiation. Mexico has said it would walk away from the talks if Trump resorted to that tactic.
“Contracts would be canceled, sales would be lost, able competitors would rush to seize our export markets, and litigation would abound even before withdrawal would take effect,” more than 80 associations wrote in their letter to Ross.
The six-page missive made it clear there was little expectation that the administration would help in trying to preserve NAFTA’s benefits for U.S. agricultural producers, sources said.
“It was a huge departure,” said one strategist. “I see this as a major sea change of people saying the administration is not going to be helpful on this.”
The letter was in fact a culmination of what many agriculture groups have sensed for months: The Trump administration views agriculture’s benefits from the deal more as a bargaining chip rather than something to be defended.
Secretary Ross “told aggies straight up that they’ve just got to get used to the fact that they’re a minor part of the economy and that trade policy isn’t going to be constructed around their interests,” said one industry consultant.
In meetings between Ross and industry groups, he said he believed the U.S. held the leverage based on the volume of food and agriculture products it sold to Mexico. He argued that if the U.S. wanted to press Mexico into making concessions on issues such as auto-part imports, Mexico would agree rather than risk losing inexpensive access to U.S. farm products.
“All the ag groups looked at him (with) their mouths dropped open and said, ‘Don’t you get it? The leverage is in their hands. We are completely dependent on them as this major export market,’” said one person who received the briefing.
Agriculture Secretary Sonny Perdue recently acknowledged Trump’s “bombastic” statements on trade during a meeting with farmers in California, but he predicts a positive outcome from the NAFTA talks.
“The president is determined to get a better deal for American agricultural producers,” Perdue said in a statement to POLITICO. “At the end of the day I think he will achieve that.”
Still, the USDA is developing contingency plans in case of a NAFTA withdrawal.
“We’re talking with the administration and Congress about some mitigation efforts if that were to occur; about how we could protect our producers with that (farm) safety net based on prices that may respond negatively to any kind of NAFTA withdrawal,” Perdue told reporters.
Perdue acknowledged that pulling out of NAFTA could have “some tragic consequences” for U.S. producers but added that he believed that farmers could adapt to changes in the market.