Strengthening commodity prices turned the course of 2010 to build a strong machinery market. According to Jim Walker, Vice President of Case IH Agricultural Equipment for North America, the surge in sales will continue into 2011. Walker and Tom Dean, marketing director for high horsepower tractors, sat down for a one-on-one interview with Farm Journal at Ag Connect Expo.
Q: How did the machinery market shape up in 2010?
Walker: It was an unexpected but great year. With the International finance collapse, domestic North American business started off strong, and then with fall increased commodity prices, the market picked up greatly. It was a tale of two drivers for the year. In addition, the Tier 3 sell off positively impacted the second half of 2010.
Q: 2011 brings the implementation of Tier 4 Interim emission standards. How was the introduction of Case IH tractors with SCR received?
Dean: We held a Red Power Tour that reached 1500 dealer personnel and 1000 producers through the summer and fall. With any new emissions standard, there is some level of concern from the dealer and customer, but universally participants told us upon leaving our events that any concerns they had were gone -- because of our simple approach, along with the lower operating cost. They were also excited to see all the new features we built into the new tractors, beyond just meeting the emissions standard. We shipped our first new generation tractor, a Magnum 180 with Tier 4A SCR tech nology on Dec. 1 from the factory in Racine, Wisconsin. The higher horsepower Magnums and Steiger Series will transition to Tier 4 Interim production the first quarter of 2011.
Q: Is the Case IH dealer network ready to service and support these tractors in the field?
Walker: We have ongoing training with our dealers and their staff. One thing that will be discussed at next month’s Parts Fairs is the DEF (diesel exhaust fluid) supply. We’re prepared to have different sizes of containers available through our dealer network.
Q: Even though you say customers are confident with the new SCR technology, was there any pre-buy of equipment before Tier 3 transitioned out?
Dean: The different types of buyers in the marketplace, along with strong commodity prices, helped with the Tier 3 to Tier 4 transition. Producers oriented to new technologies or 'early adopters' are excited about the new tractor features, while the more conservative buyers gravitated toward the product they were already familiar with. Then with the strong commodity prices at the end of the year, we were in a strong tractor market, so a lot of the Tier 3 machines were already sold. There was a good balance with sales from Tier 3 to Tier 4 Interim, and demand for the new generation tractors is very good. We continue to see strong levels of pre-sold orders through the entire transition.
Q: What will be the biggest news-maker in the machinery market in 2011?
Walker: Technology. Precision farming will continue to gain strength. We view precision agriculture as a product, not a service, so we can devote specific resources similar to a tractor in product development and
to serving our customer. With telematics and new record keeping capabilities, we can continue to improve the efficiency of the farmer.
Dean: A good example of where our technology is going is the Vehicle to Vehicle technology, which recently received an industry technology award. A good example would be a tractor pulling a grain cart automatically synching with a combine in the field while unloading on the go. This type of technology will continue to make the equipment more productive in the future.