Finding a New Normal in Machinery Prices and Repairs

By Leeann Minogue

Prairie farmers calling their machinery dealerships to talk about new equipment have been getting some shocking surprises. Prices are high. But even worse, sometimes you can’t get the equipment you want at any price, not without a long wait and maybe an uncertain delivery date. We asked Jim Wood, Rocky Mountain Equipment’s chief sales and operations officer, the impossible question: “When will things be normal again?”

“This is just a blip,” Wood says. “They’ll ramp the factories back up. It won’t happen this year, but probably by the end of 2024.” The lack of machinery sitting on local lots can be frustrating. This is a result of lowered manufacturing capacity due to supply chain issues and labour shortages throughout the supply chain. In the case of CNH, Wood says, “There was a strike as well.”

But, Wood says, “You’ll get back to the time when the manufacturers will increase production. The supply chain will come back, and we’ll be back to where we were before 2020.” Some types of machinery have been especially difficult to source this winter, such as FWD tractors and sprayers. “Combine production seemed to be more manageable,” Wood says.

Wood points out that even though prices for new machinery have increased, “in our world, most people have a trade-in.” Although, he says, “The [trade-in] difference is more than it used to be just because of economics.”

Buying used equipment

Used equipment has also increased in price, but many farmers are finding quality used machines to add to their lineups. “We sell as much used equipment as we do new equipment in a year,” Wood says. However, for some machines, even used equipment is in short supply. As sales of new equipment tighten up, “you have less used coming in,” Wood says. “Our shelves aren’t bare, we’ve definitely got some used [machinery] to sell.”

Is a shortage of used equipment a problem for Rocky Mountain Equipment? “Some of our salesmen are concerned that there’s not as much to sell as there used to be. I would argue that we had more than we needed in the past,” Wood says.

Keeping it in good condition

“If you’re going to keep it longer, make sure you maintain it,” Wood says. Some farmers might be keeping used equipment longer than they typically might under today’s conditions. “They may keep it a little longer, but if they maintain it, these machines are built to last a long time,” Wood says.

Keeping older machinery well-maintained pays off in the long run, with less downtime in the season. Farmers seem to be doing that this year. “Our shops are packed full of equipment that customers are getting inspected preseason.”

Since 2020, supply chain issues have caused problems in all types of industries, including your local parts department. Sometimes parts are hard to find or can take weeks to order in. The main issues, Wood says, are rubber and electronic components. This impacts things like wire harnesses, computer chips and all kinds of components necessary to keep today’s equipment running smoothly. Difficulty ordering parts hasn’t just been a problem for CNH, it’s causing difficulties across all lines of agriculture equipment.

At Rocky Mountain Equipment, the parts department is doing what it can to ease farmers’ pain. “Every dealer is stocking way more parts than they normally would.” Wood estimates that stocking extra parts costs Rocky Mountain Equipment an extra $6 or $7 million per year, across the chain of dealerships.

Courtney Brumback is part of the CNH Industrial service marketing team in New Holland, Pennsylvania. “Since COVID, we’ve seen that spike across the supply chain,” she says. To counter the problem, “We’re forever evolving.” While there will probably always be some sticky issues with the supply chain, Brumback says that the more a dealership can pre-plan for upcoming issues, the better prepared they can be.

Taking a proactive approach

“As technology and equipment get more sophisticated,” Brumback says, “it becomes really critical that maintenance items are done.” CNH Industrial is encouraging farmers to schedule off-season inspections to keep machinery in optimal condition. “Proactive maintenance is a way to stay on top of the maintenance need,” Brumback says.

Rob Slonski is the director of service operations for Pattison Agriculture. Pattison is taking full advantage of the capability of John Deere equipment to link machines with dealers electronically. Staff at Pattison dealerships monitor customers’ machines for alert codes. “If trouble codes come up in certain sequences or times, it’s predicting failures,” Slonski says. “We have to be on them right away.” Dealership staff will contact customers to let them know about the problem, or check to see if there may be another reason for the codes, like a cold start.

“The road that we’re taking is a proactive approach,” Slonksi says. “Our goal in service is to proactively prevent breakdowns.” Early intervention can often prevent big, major failures.

Promoting annual inspection services is another proactive approach to equipment repairs. An annual inspection, Slonski says, “keeps the cost of running equipment down.” Pattison offers new machinery buyers a chance to finance future inspections along with their purchase, including the option to lock in inspection prices for three years. (CNH Industrial is also working on a program that will allow farmers to finance inspections, and plans to phase it in later in 2023.)

When you’re paying the bill for an annual inspection, ask yourself, as Slonski points out, “What really is the cost of a machine being down?” These days, Slonkski says, more and more farmers are using annual inspection programs. Compared to the cost of having your combine out of commission in peak season, “What you paid for an inspection is really cost-effective.”

Like all machinery dealerships, Pattison has seen supply chain problems and had difficulties getting parts. However, Slonski says, “The parts situation is getting a lot better.” One thing Pattison did to address the parts supply issue was to double its parts inventories over the past three years.

Looking forward 10 or 20 years ahead is a major part of Slonski’s role with Pattison. “This industry is changing so fast, it’s unbelievable,” he says. In the future, Slonski sees the relationship between farmers and dealerships becoming even more of a partnership. Dealerships need to know what farmers need; farmers need to know what challenges dealerships are facing. “The key,” he says, “is for everyone to work together and be patient at times when patience is needed.”

Keeping dealerships staffed

Labour shortages are hurting the entire machinery supply chain, says Jim Wood, Rocky Mountain Equipment’s chief sales and operations officer. Warehouses are short of staff that can pick parts, and keeping dealerships fully staffed is a major challenge.

“It’s tough to get trained techs and attract talent to the industry. I think it’s an industry thing and it’s a rural thing.” Not everyone wants to live in a small town.

Rocky Mountain Equipment is looking for ways to change this. “We spend a lot of time recruiting and trying to attract people to the industry. And trying to keep them in the industry.” One method that has worked for Rocky Mountain Equipment is hiring temporary foreign workers. “We’ve had a lot of techs move from other countries,” Wood says. “They’ve been great employees and great members of the community.

Rob Slonski, Pattison Agriculture’s director of service operations, says Pattison also brings in a lot of staff from other countries and is investing a lot in retention and recruiting. “It’s a lot of work. It’s not waiting for people to grace your doorstep with a resumé.” Pattison also has to work with the fact that not everyone wants to live in a small town. But, Slonski points out, some potential recruits are attracted by possibilities of rural amenities like hunting and fishing. “They don’t want to live in big cities.”

Pattison reminds new service recruits that they’re getting into a very technical role. Machinery repair has changed to the point where it’s more about electronics than pulling apart heavy machinery. Overall, Slonski says, Pattison has more service technicians now than in past years.