Equipment Buyers, Dealers "Cautiously Optimistic"

August 24, 2016 09:38 AM

The year 2016 is proving to be a roller coaster. Despite the highs and lows, farmers and equipment dealers in Iowa are vigilant.

“We're looking at this as basically the new normal,” says Jon Carlo, director of sales for AgriVision Equipment in Winterset, Iowa. “$3.50 corn is probably here to stay for a while.”

“I’m cautiously optimistic,” says Madison County farmer James Baur. “Crop looks great, so optimistic we're going to have a good harvest and good yields.”

“That's how I would describe it across the U.S. and Canada,” says Greg Peterson, host of Machinery Pete TV. “When we talk to farmers and when we go to auctions, cautiously optimistic: That’s how dealers feel for the most part.”

In Madison County, a good mix between livestock and row crops helps farmers thrive.

“This is a very diverse area here,” says Matt Raasch, used equipment manager for AgriVision Equipment. “We’ve got a lot of hay, cattle, hog operations, as well as your normal corn and bean operations that you would see.”

For the row crop farmers, the crops got off to a dry start in June.   

“We had a really dry June, had about seventh-tenths of an inch for the whole month,” says Steve Martins, a Madison County, Iowa, farmer.

Martins says that helped the crops' roots dig deep and establish a strong start. As for hay producers, it made cutting much easier.

“The last two of three years, it's been a real struggle each year, because of the weather, to get the hay put up and get it up in good condition,” says Baur. “And we got it up early, and it's in good quality, good condition, it didn't get rained on, so it's probably the best one in the last three or four years for this area.”

Baur used a new baler this year, but he also upgraded his planter and combine. Martens also upgraded his equipment, moving from strip till and 30-inch rows, to 20-inch corn. It’s a move he says translates to more yield.

“I’m hoping, usually anywhere from a 5- to 20-bushel-per-acre increase,” says Martens.

Another piece of technology that's been a game changer for Martens is row shutoffs.

“With that, it'll save me about $7,000 in seed costs a year,” he says. “With a lot of waterways, terraces and point rows, that's a must-have.”

“Row shutoffs at the time were revolutionary for what we were seeing as far as cost savings, and now that's just a given that it has to be on a planter,” says Raasch. “Now, we've went from that to variable rate planting where our guys are planting anywhere from 25,000 seeds an acre up to mid-30s in the same field, just based on data we've gathered.”

Farming in this area of Iowa is not only diverse, but competitive. And Baur says it's adding technology that's helped give him an edge.

“Over the last two of three years, we've implemented all GPS technology in all of our activities, so when we start, we variable rate all of our seeding, we variable rate all of our anhydrous ammonia, we variable rate all of our chemicals, we variable rate all of our fertilizer, and then we're capturing all that data,” explains Baur. “Being able to have that data, we’re at the point now where we can start making good business decisions based on that.”

“Ease of access and speed of access are key right now,” says Carlo.

That’s something AgriVision says is becoming a need on many area farms.

Technology is a big driver today,” says Carlo. “And that’s probably what we're seeing more and more each day, is people are looking for more return on their investment. “

“It helps us get a really good handle on our costs, so we know what our costs are per unit down to a 60 foot by 60 foot grid of the field,” explains Baur.

He says while he sees more consistent yields today, the boost to his bottom line didn't happen overnight.

“I think some people go into it with a misconception that you'll see this huge savings immediately, the savings you get is taking your technology and making your operation better from that.”

That need for more technology is driving equipment trends across the country right now.

“The 1- to 5-year-old combines, the pricing was solid, holding, and the search traffic was even up on that stuff,” says Peterson of Machinery Pete TV. “So, a very good sign.”

He says potential buyers were worried prices would continue to fall the past couple years, but values continue to find footing and hold strong.

“One thing we haven't seen so far in 2016 is the huge volume of late model stuff that we saw in 2015,” says Peterson. “There were a lot dealers that pushed a lot of stuff the last 6 months of 2015 onto the market, and we haven't seen as much of that in 2016.”

AgriVision says buying momentum has been surprising this year, but it's a balancing act helping them weather the storm in 2016.

“We feel we've found the bottom, now we're still cautiously optimistic, but we do feel like we've found the bottom in this used equipment market,” says Carlo.


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