End of year brings increase in farm equipment sales
Tuesday, December 14, 2010
SIKESTON, Mo. -- As the year winds down, a lot of farmers are in the market for a new set of wheels -- to be used on the farm.
The University of Missouri Extension recently reported that, with corn and soybean prices more than 60 percent higher than in June, many farmers in Missouri and around the country are now investing in much-needed upgrades and machinery.
In Southeast Missouri, dealers say sales are up slightly, but steady.
"We've seen some increase," said Gary Kight, sales representative at Sikeston Implement. "I really don't think it's solely because of the higher market prices, but it's probably going to help a little bit. People buy and trade because they need to, and everything happened to fall into place this year."
The pieces of equipment drawing the most interest at Sikeston Implement are cotton pickers, combines and tractors, said Kight.
Steve Baehr, store manager at Medlin Equipment, noted that while sales are good this year, they saw a larger increase in their 2009 sales.
"But last year, we sold a lot in the last 10 days of the year," he noted.
Mike Pobst, president of Alliance Bank in Sikeston, said he has fielded more inquires from farmers regarding purchases this year. "But it's still a little early," he said.
Right now, most of the farmers are figuring their revenues and expenditures and meeting with accountants to see where they stand financially. Equipment purchases can be filed as an expense, so there can be advantages to making those big buys come tax time, Pobst explained.
And after all, it has been a good year for most farmers, despite the dry summer and other challenges, Pobst added.
Chad Crow, branch manager at Progressive Farm Credit, agreed it is still too early to tell what farmers will decide to do in the final days of the year. "But we are seeing those inclinations," he said.
One thing Crow said is for certain, however, is that "cotton is king." Market prices have been strong for the crop, and Crow said that with new advances in cotton machinery, those have been popular purchases.
Gary DeWitt, vice president of DeWitt Auction Company, said that the auctions, which are the first Monday of every month, haven't seen any big change.
"The farm economy is good," he said.
Not only that, the auctions attract buyers from around the world, so it isn't so dependent on the local economy.
"We have buyers from Uruguay, Mexico, Belize, Alaska..." said DeWitt. "Our business is very broad and has been good all year."
However, DeWitt did note that prices are slightly higher this year. He also pointed out that while market prices are better now than they were in June, several area farmers did not benefit this harvest season, because farmers often contract prices prior to getting crops out of the field.
"So it will probably be next year before they get to reap those higher prices," said DeWitt.
Baehr also noted that while grain prices are higher, he's heard a lot of farmers comment the quality of their crops weren't as good this year as in 2009.
At Medlin Equipment, the 225 horsepower tractors are the biggest seller this year, but field equipment is also garnering a lot of interest.
As far as whether the higher prices spur those sales, Baehr said he's not sure. "Farmers don't really comment on that," he said.
Now, the equipment dealerships and credit agencies are preparing for what could be a year-end rush.
"December is always busy," said Kight. "There will be a lot of folks coming in and wanting to buy something between Christmas and New Year."