WHADDAYA MEAN, “LONG TERM?”

After roaming the halls of Louisville’s Kentucky Exposition Center last week, we received a number of questions about the new Ag Connect Expo (Jan. 13-15, 2010). On top of the list, “Is this just another way to minimize specialty equipment manufacturers?” Maybe second, “Will we lose our regional farm shows?”

A simple answer to both of these questions — No! And No!

Ag Connect Expo is being developed because there is no single farm equipment show in the U.S. or Canada similar to the large European or Asian farm shows, to which foreign dealers and farmers/ranchers can see product meant for the top 20% of the world’s producers. (Go to www.FarmEquip.org click on Ag Connect Expo.)

As this is written, a concentrated marketing program is going on to the world’s media, dealers and large producers. A special preview day for both the world’s ag media and top invited dealers will be an exclusive part of the show. Complete with a fully equipped press room and meeting rooms where attending educators and company personnel have the opportunity to teach farmers and ranchers the latest agricultural technologies being developed.

Yes — Ag Connect Expo will not be an inexpensive venue in which to exhibit. Most shortliners realize, however, that to choose a site that, by itself, has an all-year-long international reputation for being one of “the places to visit,” big city costs are going to be involved.

Specialized farm equipment manufacturers willing to forego looking at only tomorrow’s sales figures and spend a little time focusing on long term sales in North America and to the rest of the world, will see this as a true opportunity. And it is these companies willing to look at worldwide sales that will be here in another 10-20 years.

There’s no question that worldwide economic conditions in the vast majority of industries today are troubled. In talking last week with farm equipment manufacturers in Louisville, however, it was obvious that last year was very good for most of them. Most exhibitors were pleased with the quality of purchasers who visited their displays in Louisville. Conversely, many of them are “scared” about 2009.

There are three reasons for this fear of the unknown. First, the pullback of financing from many of the large wholesale financing firms. (And we duly note that GE Capital still finances shortliners who meet their sales credit criteria and are credit-worthy borrowers.) Secondly is the fall of commodity prices and, thirdly, the decline in the hobby or “sun-
downer” farm market.

FEMA, together with NAEDA, several regional dealer associations, FEWA-AIMRA and AEM, are collaborating to see if some answers to the financing problem might be found. Obviously, this is going to be a difficult problem to address.

As to the second problem, growers and all involved in agriculture MUST have realized that $8.00 corn was unsustainable. Prices for commodities are now more rational and are still very good.

The third problem — fewer sundown farmers — is likely to remain with agriculture for some time to come. With non-farm income opportunities dwindling, those firms relying solely on the hobby farm will have a difficult time. Their best hope will be a market expansion.

And where will that expansion come from? According to the just-released, The Small Business Economy by the U.S. Small Business Administration’s Office of Advocacy, “The export market was a highlight of the 2007 economy, driven by a drop in the dollar’s value against (continued pg 2)

other currencies.” Yes, this focused on 2007, but the same economic conditions then still remain in place today.

While some members may simply say that the top 20% of worldwide farm producers, which the Ag Connect Expo focuses on, are not their market, can any manufacturer simply ignore that segment of agriculture which, during the next twenty years will become more important than ever? It is these large commercial producers that we witness continuing to expand and are buying much of today’s equipment. Isn’t it time that specialized manufacturers of farm equipment begin looking at them as a way to expand their market?