The latest edition of Fortune magazine arrived in the mail over the weekend (just as I was getting ready to head to Boone for the Farm Progress Show) and the "First" page at the front of the magazine has a great picture of 9 John Deere combines from a Minnesota custom harvesting crew at work.
What gets me is how the stuff we kind of take for granted is "important" to the writer of a national business magazine. For example, we in agriculture know that crop stocks have been declining for 20 years as demand has risen. But the Fortune piece notes that there are only 306 million bushels of wheat in stock across the country and that's the lowest amount in nearly 60 years. THAT's why crops are at record highs - and since no wheat is used for ethanol production, you can't blame biofuels for the rising prices of bread (even if some wheat acres shifted to corn).
Perhaps the other number in the short item that might surprise business readers, but is no surprise to anyone in our business (ag journalism or farm production) is that the base price for a 9770 Deere combine is $277,000 and you can't get one for at least a year. Very tight equipment supplies are pushing up prices, pushing up used equipment prices and wreaking havoc on a lot of farms' equipment replacement plans. While Deere did announce it would boost combine production capacity at its Moline facility by 30% (after a $35 million investment announced in May) - it may take too long to catch up.
One note, since February corn prices are down 36% from their astronomical highs - if the stock market had fallen that far in so short a time, brokers would be jumping out of windows. Agriculture is better able to weather price shocks than a lot of people give us credit for, that's for sure.
If you're buying new equipment this year, let me know about the experience. Are you working with dealers you've worked with in the past? Are you finding new suppliers just to get new equipment into your operation? How is the equipment buying shaping up for your 2009 season?
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