MachineryLink

Tractor and combine retail sales declined in March, according to the latest report from the Association of Equipment Manufacturers (AEM). Total farm tractor sales were down 15.6% last month, compared to March 2019. Retail sales of self-propelled combines declined 11.9%.

Given those numbers, AEM's March report still does not reflect the impact of COVID-19 on agricultural equipment sales, said Curt Blades, senior vice president for agriculture and forestry, AEM. "It is way too early for this to be a reflection of COVID-19," he told DTN. "I tend to look at year-to-date numbers."

Year-to-date "all tractor" sales, which include two-wheel- and four-wheel-drive tractors in all horsepower ranges, total 41,237 through March, compared to 44,620 tractors during the same period in 2019. That's a 7.6% decline. Four-wheel-drive tractor sales were 548 during the first quarter of 2020, compared to 590 in the same period last year. That's down less than 50 units or 7.1%. Combine sales declined 18.1%. The industry sold 800 units through the first three months of 2020, compared to 977 during the same period last year.

Manufacturers are finding a way through the landmines of COVID-19.

AGCO Corp. is cautiously optimistic given the market landscape. "Through March, we were pleased with our new equipment sales and interest from customers," said Robert Crain, senior vice president and general manager, AGCO North America. "Today, customers are adopting a more cautious attitude toward new equipment purchases, and they're waiting for a clearer picture of what may lie ahead due to the uncertainty being created by COVID-19, especially related to its impact on crop, dairy and livestock commodity prices."

John Deere declined to comment before its scheduled earnings call on May 22. Deere & Company reported net income of $517 million for the first quarter of 2020, ending Feb. 2, compared with net income of $498 million for the quarter ended Jan. 27, 2019.

CNH Industrial NV cancelled its dividend proposal due to the impact of the coronavirus pandemic. CNH brands Case-IH and New Holland suspended work earlier this month at their plant in Grand Island, Nebraska. The action was taken to protect the plant's workforce. Reopening the plant is a week-to-week decision.

Kubota Manufacturing of America Corporation and Kubota Industrial Equipment Corporation had suspended operations at the beginning of April at their Gainesville and Jefferson, Georgia, facilities. The 2,700 employees affected, however, continued to receive pay and benefits. Kubota Manufacturing of America has reopened with enhanced CDC-recommended screening in place for all employees and visitors.

Blades said AEM member-manufacturers have made it a high priority to keep parts flowing from the factory to dealerships and equipment owners. "They are working hard to supply the service and the tools [farmers] need to get their crops into the ground," he said.

Manufacturers are working to stay in the parts game by strict sanitary standards -- including taking worker temperatures -- and by reorganizing their very factory floors. One California manufacturer caught wind of the growing pandemic through its operations in China. The manufacturer used that experience to alter its U.S. factory floor plans by dividing the floor into zones. If a viral infection closed one zone, the other zones can continue to operate.

That's becoming a common practices across the industry, Blades said. "A month ago, plants were shutting down. But there have been countless conversations [about how to keep keeping running]. We are innovative," he said.

Dealerships are of special concern. The dealership is traditionally a "high-touch" businesses, meaning farmers and sales, parts and service technicians interact closely. But not these days. Dealerships may be closed to many routine services and willing to work with customers only through appointments and remote parts drops.

Stephen Lohr, Broadway, Virginia, isn't in the market for machinery these days. He had updated much of his line over the past couple of years. But that doesn't mean he's not looking for deals. He is looking for a new or slightly used diesel pickup and believes the coronavirus-affected market is ripe to negotiate. He is concerned about parts and service for his mostly Deere line of tractors, balers and other implements. James River Equipment, his John Deere dealership, is open while taking precautions to protect employees and customers.

"It's not a terrible idea to call ahead," Lohr says. "But they are still available for one-on-one service."

James River has instituted a series of COVID-era practices. For example:

-- Customers can look up and order parts online or by phone. Parts will be direct shipped or available by curbside pickup.

-- In-store shoppers will find handwashing stations and social distancing.

-- All controls are sanitized by employees after on-farm repairs. Employees change gloves and wash their hands between stops.

-- Customers can request machinery demonstrations. All equipment used in demos are sanitized. The dealership is offering free home delivery of new John Deere mowers, Gators and compact utility purchases.

There are other ways to connect dealers and experts with their customers. From one high-tech provider, there is an app for that. With AgriSync's free app, farmers connect with key advisers by way of live video feed. Advisers pay a fee to use the Waukee, Iowa-based service.

Dan Miller can be reached at dan.miller@dtn.com

(AG)

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