Combines is this a problem elsewhereIJIJIJ

[venturis40]

my biggest issue with this whole buyout and my biggest concern over all is this butler already has full line agco at their fingertips with the challenger line and their white planter dealership people that have gone to the meetings employees_etc have stated that the butler group has already made statements about "their commitment to the lexion line" and i was also told of their new commitment to Kinze any move in that direction would shoot 75% of greens business in the foot i see VERY few challenger wheeled tractors, implements of any kind other than white planters, and absolutely no challenger combines on butler lots. at least zeigler seems to be making an effort in that respect. there is a little of everything on those lots... cat is flat out hands down the cream of the crop in the construction industry and their track tractors are among the best but the green ones are rising fast (still cant turn away from a rock pile, but hey...) the jury is definitely still out on the lexion combine thing i know a lot of hardcore green farmers that have yellow track machines that gave up on the lexion because they were gonna have to add on to their house and garage for the cat service truck so back to green harvesters they went i'm sure there are a lot of trouble free machines out there also, just my experience also alot of bigger outfits with a 9860 or 8010 and a lexion so they can keep going and the cat dealer network may prove to be a real big pain if this sale to butler dont work out in a positive way cant just run over to ziegler and buy a new challenger you know my opinion on the whole agco thing is not the color or the brand, its the 27 (or however many the current number of brands is) dealer contracts to be full line agco i dont care if its red, orange, or yellow paint but i really would like to be able to walk into any agco store and buy oliver or massey or white or allis or gleaner or fendt or valtra parts i agree that the cat dealers would be a natural fit, but it will take a lot of work and vision on the part of its owners and management also, in order to not alienate the established customer base and cause them to jump colors remember those other two strong hungry dealer networks you mentioned i for one dont have anything negative to say about titan or rdo i'm not a big rdo customer, but i spend my fair share of time at titan and i still wonder how far i will have to run for versatile parts

 

[venturis40]

if it is the answer the cat dealers will have to develope a little more vision and a desire to aquire new business buy earning it, not buying it and scrap the antiquated sales district policy that they have been operating under. if a farmer in rosholt wants to buy a tractor from zeigler or another cat dealer other than butler he should be able to. my .02

 

[Brian]

Orange, Why neglible market penetrationIJ I do not pretend to know that answer. I suspect it is due to several factors. One possibly having to do with Cats customer base and Challenger productsIJ Since Cat is a relative new comer to the ag market it does not have a 50+ year type following like green ,red, orange, etc... Said another way, it had no loyal ag customers when they first started (1987IJ). Thus, when they began selling ag tractors and for some time yet, most to all of their sales need to come from buyers who currently have other color tractors to start with. Since green, red, and blue combine for a very lARGE percentage of the tractors sold it means that in order to sell a challenger wheel tractor your dealing with a customer who already has a pretty darn good tractor. My thought is that in order to sell a tractor to this customer base you need to be either better or cheaper. For the most part I do not think that is the case with the Challenger wheeled tractor. They may have had a tractor that was as good as anything on the market, but for the most part at the same cost...and that doesn't get you a new customer. I think now that Challenger has gotten the CVT tansmission into their tractors they have a strong selling point against their competition. It appears to be a revolutionary change to a tractors performance. For the first time in a long time they have the chance to gain and retain some market share based off of their tractor. Now when it comes to the AGCO (orange)tractors yes they sell more for now. There are some strong dealerships with very loyal customers who prefer orange. I have a soft spot for orange myself. But what about in 20 or 50 yearsIJ If the trend of larger farms continues just how many customers will there beIJ When I look around my area I see only a handful of us farmers under 40 and only a couple of guys under 30 who are interested in production ag. This handful and then only a couple appear to have to farm the acres that dozens are farming now. For now AGCO will best be served by having both types of dealers but tomorrow I'm sorry to say, will probably only have a few dealers. AGCO is thinking about tomorrow with this move. Also, I think Cat type dealerships offer a better chance for AGCO to sell multiple units to large farms. It takes lots of financial resources to make 25-50+ unit trades. Sorry for so much rambling. Could have simply said I think the Challenger tractor needed_needs to be improved to make more competitive against other brands. If these tractors were hands down better than the competition like the MT series is vs. the other track tractors they would sell. Also. that Cat type dealerships provide selling opportunity to larger sized farms.

 

[R_O_M]

I am not going to enter the debate on the north American dealership structure but I question the conventional wisdom that the young guys are leaving farming and not coming back! A few years ago I ran through the ages of the farmers around our area. There was a pattern in the age groupings from which I could identify when we had good yields and good prices and farming was very profitable. As young guys, mostly in their late teens, these age groups of present day farmers had made the decision to continue with a farming career when farming was on the up swing. Conversely, there are gaps in the group of ages of the farmers where farming was at a low ebb when the young guys had to make a decision to enter or to leave farming for another profession. They left! Over the last few years I have studied the world food supply situation both for the near future and for the much longer term into the 2030s and on to the world's suggested population peak of about 9 to 9 1_2 billion population by 2050. That is the estimated peak world population or about 40 % more than the current population. Beyond the 2050 period it is believed by the demographers that the world population will go into a long decline. I simply cannot see the world's farmers increasing production by another 40% in 40 years just to be able to feed this huge population to the present standards let alone at the much higher standards that the western nations take for granted and which other less developed nations aspire to. The young farmers will be back and very soon as farming enters a new golden era similar to that at the end of the WW2 and the era of the Great Grain Robbery of Oct 1972 only this time the golden years have a very good chance of lasting decades instead of just a few years. In fact within another few years we may be fighting to keep the number of applicants for farming related pursuits down to a level we can effectively utilise. There is very little arable land left to exploit around the world. Irrigation water supplies, both surface and underground aquifers, are declining. Something like 1_3 of the world's irrigation water comes from underground aquifers and according to the hydrologists most of the world's major underground aquifers will be exhausted within about 20 years, as the major grain growing north China plain aquifer for instance, already is. Around 20 to 30% of the world's food is either partly or totally reliant on irrigation. Irrigation water is only one factor. There are indications that we may be getting close to the achievable field limits of crop yields. Crop yields in the plots and laboratory conditions and in the prime situations still have along way to go up but as every farmer knows, nature has a way of placing some pretty hard edged limitations on what she will allow us to do on the large scale and the maximum yields we can achieve under all field conditions and all environments. The higher we go yield wise, the more height we can fall from and more easily at that. The only cloud on the horizon is that the big corporations will try to and already are getting into the farming game and will try to squeeze everybody else right out. However, after nature delivers a couple of hefty losses in quick succession most farm corporate bean counters will, as they have in the past with farming schemes, say to their boards, get out of this game as it doesn't deliver consistent and high returns. There are better prospects out there. Maybe I am too optimistic about the future of farming but don't ever underestimate the developing long term critical situation that is developing in the world's food supply situation! Here ends the epistile! Cheers and a happy new year to all!

 

[Brian]

We have the same patterns when it comes to age groups of farmers. This current grain price situation will no doubt encourage a new set of excited producers. However, technological advances continue increase the productivity_person. This will certainly reduced the number of farmers_customers in the future. Some advances like Round-up Ready crops, may even acclerate this loss at a faster pace than we are accustomed to. I believe I read that in the US there were just over 13,000 grain harvesting units sold in the US. For 2007 it is probably somewhere near 5,000. So when the number of combines sold is cut in half again just how many dealers can make a living off of thatIJ Or just how much money should a manufacturer invest in RandD when some of these compainies only sell a few hundred units and will sell even less in the futureIJ All questions that will be interesting to watch and see how they are answered.