Ag Equipment Industry Short on Labor

Combines, Labor Shortages Highlight Ag Equipment at 2024 Commodity Classic

Dan Miller
By  Dan Miller , Progressive Farmer Senior Editor
It's the year of the combines at the Commodity Classic in Houston. The Gleaner S98 Super Series combine is one of eight combines on display for the more than 10,000 farmers attending the Classic through Saturday. (DTN photo by Dan Miller)

HOUSTON (DTN) -- The biggest challenge facing the equipment industry right now is a shortage of labor, according to one of the leaders of the Association of Equipment Manufacturers (AEM).

Curt Blades, senior vice president of agriculture services and forestry for the Association of Equipment Manufacturers (AEM), talked about that and other industry challenges and trends in an interview with DTN/Progressive Farmer at the 2024 Commodity Classic this week.

Blades discussed what the machinery attendees are seeing at the event -- the trade show floor was thick with combines -- but also talked about labor shortages. Name any manufacturer, he said, and they have a help wanted sign out. And, perhaps for one last time, he addressed the impact of the COVID-19 pandemic and what the industry learned from it.

The following is a portion of DTN/Progressive Farmer's discussion with Blades.

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DTN/Progressive Farmer: Curt, let's start out with COVID. Maybe it's the last time we'll ever have to talk about this. What is its lasting impact on ag machinery manufacturers?

Blades: The industry has learned to manage a lot of things, whether it's COVID or supply chain issues. We learned during COVID how fragile the food supply chain was -- how efficient, but also how fragile. All our manufacturers and members have been taking these lessons very seriously, making sure when they source their parts, they also have a resiliency they might not have had before. There has been some real diversification of the supply chain, where a manufacturer might have had a single source, one particular country for a part, maybe now they have two. Think of where some of the biggest hurdles were during the pandemic -- it came when a whole country was shut down. Italy, for example. A whole lot of stuff comes out of Italy -- smaller components. That (nationwide shutdown) disrupted everything because it takes 100% of the parts to sell a tractor. Seat cushions out of Texas or wiring harnesses out of Ukraine, we have to find more sources (for parts).

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DTN/PF: To the extent that the ag industry relied on just-in-time delivery of parts and components, how did the pandemic impact that long-held manufacturing practice?

Blades: Just in time is brilliant -- it makes a lot of sense until it doesn't. I think we learned that we need a hybrid of just in time and just in case. We see some inventories (building) for just in case, building that resiliency into the supply chain.

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DTN/PF: What's the biggest "need" in the industry right now?

Blades: (AEM) has a thousand members. If you ask any of them about their biggest challenges, it is technicians. Labor. Workforce. Every single one of them is hiring. That is the No. 1 challenge, without question: finding people at all levels. Whether at the dealer level, technicians or welders in manufacturing. Quickly behind that is managing compliance. New regulations and policy demands are coming fast and furious. We all want to make the world a better place, but so much is happening, so quickly, that (the industry) struggles to keep up with all the new regulations.

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DTN/PF: What is catching your eye here at the Commodity Classic?

Blades: Sitting here today, we've got the largest Commodity Classic ever (10,856 farmers and exhibitor staff), 20%-30% larger than past years, and the show is on two floors (of the George R. Brown Convention Center). From AEM's perspective, we are counting (eight) combines on the floor. If you want to see where technology is, there's a pretty significant investment in that line of equipment. That's where the new technology is, and that technology is remarkable and transformative.

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DTN/PF: We've heard that this is the year of combines, might have been Case IH that coined the term with the introduction of its new AF11 combine. What explains it?

Blades: It is the year of combines. If you look at sales of combines over the last year, sales have been surprisingly solid (7,369 sold in 2023, up 1.4% over 2022). A lot of that can be explained by the new technologies. Farmers want to take advantage of that new technology. But look at this year -- we've had launches in the last 24 hours (three Deeres) and other machines just recently (Case IH, New Holland, Gleaner, CLAAS), but are here for the first time. And we have the Fendt IDEAL combine, also. Farmers know the combine is the moneymaker on the farm, and it's the most expensive piece of equipment. They want to make the right purchase.

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DTN/PF: Might it not also be the year of large tractors? Large four-wheel-drive tractors sales were up 31.7% in 2023 over 2022 -- that's 4,564 four-wheel-drive tractors sold over the months of 2023.

Blades: There is something going on here. But when you can say that combine sales have been solid and articulated, four-wheel-drive tractor sales have been solid, those are both considered purchases. You don't wake up early in the morning one day and decide to buy a combine or wake up tomorrow and decide to buy an articulated four-wheel drive. You're not buying for next year; you're buying it for the next five to 10 years. To see these numbers as strong as they have been for the last 12 months, that points to optimism, that points to interest in technology.\

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DTN/PF: Talk about row-crop tractors, two-wheel drives more than 100 horsepower. Sales were up 5.2% in 2023, compared to 2022 --nearly 28,000 units sold.

Blades: Sales have been solid. Numbers reflect on that as being a replacement market. Farmers always want to make these tractors last one more year. The reality is we are still dealing with the oldest fleet we've ever had. But you have things lining up against that replacement market, such as higher interest rates and lower commodity prices. But we also have volatile weather. You want to till when you need to till, and you want to plant when you need to plant. Sometimes that means you want the newest machines out there to take advantage of those windows.

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

Follow him on X, formerly known as Twitter, @DMillerPF

Dan Miller