Farming is a cyclical business. I’m sure you’re almost tired of hearing that. I think of it more like a roller coaster business with a slow climb in prices into the heights of profitability, then a quick fall in values – just ask any corn, beef, swine or soybean farmer.
As 2016 comes to an end – yes we can almost see the ball perched above Times Square begin to slide, we’re all going to be challenged. The market hasn’t seen prices this soft in some time. Many farmers reading this weren’t around in 1985 to remember the “Big One” and of course today things are vastly different than they were back then.
However, looking ahead will mean having a tighter hold on your wallet, and that will continue to pressure the big iron industry. Field inventories of equipment are high enough that we’ve heard talk of dealers that won’t trade for new equipment sales (odd though that may seem). Those certified pre-owned programs can make a difference, but if you’re not comfortable buying you won’t buy.
So that means one big word in 2016 you may not have used lately – maintenance. Yes maintenance. You’re already getting machines ready, but for business farmers who trade frequently the bigger maintenance items may have gone by the wayside as an issue to follow. Instead, you just traded the machine. Not so for 2016.
The good news is a lot of big new shops have been built in the last five years, and you have a warm place to work. So it’s time to start thinking about getting machinery ready for 2016, checking service records and considering the possibility that you may have to do some work you may not have done in some time.
For those reading this who keep equipment longer, you’ll probably keep it even longer, and that brings up a range of second-tier service “opportunities” for heavily used equipment.
As the long nights of winter yield to spring, having equipment ready to roll will be important because downtime can be costly at a time when every penny you spend counts more than ever.