In today’s newscast, we discuss Kinze’s surprise move into the tillage market, an announcement from the Equipment Dealers Assn. and the Assn. of Equipment Manufacturers that starting in 2021 manufacturers will make certain diagnostic and repair information available to customers through their dealer networks, a few big announcements from CNH Industrial, including positive year end results, along a look into some of the benefits of joining a dealer peer group.
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I’m Managing Editor Kim Schmidt, welcome to On the Record! Here’s an update on what’s currently impacting the ag equipment industry.
Kinze Enters Tillage Market
Kinze announced it’s entering the high-speed tillage market through a partnership with Degleman.
The new product line is based on a Canadian design, produced by Degelman Industries, that has been licensed to Kinze to build at its manufacturing facility in Williamsburg, Iowa.
Roger Murdoch, vice president of sales and marketing for Ingersoll Tillage noted that the Degelman product has been a “really hot” product and it seems like a natural fit for Kinze.
Dealers we reached out to suggest this was a “flailing arm” move by Kinze to get them back on the radar.
Dealers suggest this was an odd move by Kinze into an already competitive market. Some commented that the move suggests Kinze is trying to “re-legitimize” themselves as a player in the equipment market. One dealer commented that Kinze could be looking to expand further into some of their other products, specifically citing Degelman’s manure spreader.
Another dealer we reached out to said, “I’m more excited about the new monitoring system that comes out next year. That can immediately improve their current planter offering. I’m luke warm about the high-speed disc. Even though the vertical tillage market is rapidly reaching maturity, I see this high-speed disc used more in the marginal farmland. The problem there is that so many of those guys have adopted no-till practices. While it is always nice to see a supplier offer a new product, I’m not jumping for joy for this one.”
Kinze President Susanne Veatch said the tillage products will be available from Kinze dealers in the United States and Canada, as well as for export to customers in Eastern Europe and Russia. Pricing information will be released this spring, with product availability beginning in fall 2018.
Now here’s Jack Zemlicka with the latest from the Technology Corner.
The Value of Precision Peer Groups
Peer groups are nothing new to the agricultural industry, but developing a network of external support is an increasingly valuable resource for precision farming professionals.
Joining or even forming a precision peer group of non-competitive dealers is an option to network with other specialists and trade tips, challenges and success stories.
Peer groups also can validate the path a precision business is on or help redirect it by forcing owners or managers to take a closer look at personal and professional development.
This week, we had the opportunity to host the winter meeting of the Independent Precision Ag Alliance. The precision peer group of about a dozen dealers of different sizes and locations, formed in 2010 and meets twice per year to discuss and share best practices, annual goals and vendor evaluations.
Among the topics discussed at the 2-day winter meeting was integration of the Internet of Things into customers’ operations, opportunities to include analytical tools into precision service packages and how recent and future company mergers will reshape the future of precision farming.
CNHI’s 4Q Ag Sales: +14.5%
CNH Industrial had a big week. After announcing overall revenues and ag equipment revenues for 2017 were both up 10%, the manufacturer made a series of big announcements. In response to AGCO’s acquisition of Precision Planting and Deere’s acquisition of Blue River, CNH is clearly not sitting still.
CNH Industrial announced a new partnership with The Climate Corp. that will extend and develop a portfolio of data sharing capabilities to help farmers with real-time agronomic visualization and decision-making solutions. Case IH and New Holland will provide customers with two-way data connectivity between their AFS and PLM Connect platforms and the Climate Corp.’s Climate FieldView platform.
The same day, CNH and Microsoft also announced a new Digital Transformation project powered by Microsoft’s Azure cloud and intelligent technologies to transfer agronomic data from Case IH and New Holland machines.
In another report, according to Bloomberg, CNH CEO Richard Tobin is toying with the idea of separating the Iveco truck business from the company’s more profitable ag division. Tobin is quoted as saying, ““You could spin out individual businesses with very efficient balance sheets.” But he added, he’s not necessarily saying they would do that.
For the full year 2017, ag equipment revenues were up 10% to $11.1 billion compared to $10.1 billion in 2016. Fourth quarter ag equipment revenues were also up, posting a 14.5% improvement over the fourth quarter of 2016.
Commenting on CNH’s 2018 outlook, analyst Michael Shlisky of Seaport Global, said, “The market outlook appeared positive for 2018, with all Ag regions expected to be flat to up 5%.”
AEM, EDA Outline ‘Right to Repair’ Solution
On Thursday, the Assn. of Equipment Manufacturers (AEM) and the Equipment Dealers Assn. (EDA) announced a joint industry commitment to provide comprehensive service information tools to end users of farm equipment for tractors and combines in model year 2021. EDA and AEM’s Ag Sector Board outline a Statement of Principles that affirms the industry’s joint commitment to providing the tools farmers and ranchers need to minimize downtime and maximize productivity of farm equipment.
Dennis Slater, president of AEM, described what will be available to customers.
“Manufacturers will make available to their dealers at fair and reasonable terms a series of tools and services to repair their equipment, most notably onboard diagnostics, electronic field diagnostic service tools and training on how to use both. These tools will empower farmers, growers and ranchers to perform basic service and maintenance on their equipment, minimize downtime and maximize productivity. It will also help end users easily determine whether they need to involve their dealer to address more complex repairs. Equipment manufacturers believe in the end users’ right to repair their equipment, but the right to repair is not the right to modify.
Manufacturers invest considerable resources developing software that is revolutionized farm equipment. These innovations have made combines and tractors more safe and productive and sustainable than ever. Allowing access to the underlying software on farm equipment will risk the machinery’s compliance with laws governing emissions and safety and would undercut the resources manufacturers invest in developing the best possible products for their customers.”
However, for safety, durability, environmental, and liability reasons, diagnostic and repair information and tools will not permit consumers to do the following:
- Reset an immobilizer system or security-related electronic modules,
- Reprogram any electronic processing units or engine control units,
- Change any equipment or engine settings negatively affecting emissions or safety compliance,
- Download or access the source code of any proprietary embedded software or code
And now from the Implement & Tractor Archives…
Implement & Tractor Archives
Everyone who was around agriculture in the 1980s know what a difficult time that was. While many believe it was farmers who got the worst of it back then, Mike Boehlje, the distinguished professor in the Dept. of Agricultural Economics and the Center for Food and Agricultural Business at Purdue University, says, “What many people don’t fully appreciate is that we actually had far more stress in the machinery and equipment part of the industry during that time period. One out of four machinery dealers went out of business or were merged out of business during the 1980s.”
In the April 1988 issue of Farm Equipment, Harold Halter, contributing editor and former executive vice president for the Farm Equipment Manufacturers Assn., wrote: “In 1985, as many as 725 dealers went out of business, the largest number of dealers to leave the business in the same period of time in history.”
He said the rate of dealer departures slowed by 1987 when only 123 dealers quit during the last half of the year.
In 84 months — or 7 years — after FEMA started its survey of dealers, 3,027 dealers went out of business. It was estimated that about 8,000 were still operating by early 1988. Today, there are about 6,700 farm equipment dealers still operating in the U.S. and Canada.