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Getting past the supply crisis

Andy Sacks/Getty Images Silhouetted combine against sunset
COMMUNICATION MATTERS: The rocky status of today’s equipment market could strain relationships if you and your dealer aren’t talking before harvest arrives.
With late deliveries of new equipment, rising prices for used items and a lack of parts, 2022 has been a perfect storm of trouble.

I’ve been a little slow to write about the supply crisis. How do you write about the upending of an entire industry? Truth is, everyone is working hard to get through this, but the strains along the way could cause longer-term challenges.

I’ve often written here about the equipment plan, or fleet plan. What you buy, and when, matters to your equity position and your bottom line. But unless you have a good read with tarot cards, no one knew the late 2021-22 parts-and-equipment crisis would unfold as it has.

I’ve spent time with manufacturers who admit they’ve missed deliveries. Companies are figuring out new ways to deliver whole goods, while not overpromising what they can provide. This probably isn’t great news for the guy who wanted that new 24-row planter for 2022 and it didn’t arrive until June.

I know that if I talked with 20 farmers, I’d get 20 different stories about missed parts, late equipment deliveries and renegotiations of trades. If you miss delivery on a planter for 2022, how does that affect the value of the trade-in you kept to plant your crop? And no iron-based industry has been left unscathed.

Outside of agriculture, I heard recently that BMW even swapped in new chip sets that will keep buyers from having Apple Car Play or Android Auto when they take delivery. That’ll come later. Sure, you can laugh about BMW. But folks, have you priced a new tractor lately? Farmers spend more on those workhorses than the one-percenters do on a new ride. And yes, a wait for Car Play is really a First World problem but does show how this supply situation is hitting every market in unique ways.

The chip shortage will be with us longer, although manufacturers tell me they’re working through it. But I know the truth is far uglier. When something breaks, parts are still scarce.

Beyond the lament

I don’t want to belabor the obvious. These are new times, and I don’t think we’ll work through them before the end of 2023. That requires you to consider those future purchases and how you’ll handle repairs, too.

Having covered this industry for a while, I know one thing is certain. Farmer-dealer relationships still matter. And if your dealer doesn’t value your business, in a way where you both profit, it’s time to look for a new dealer, frankly.

I often get asked, “What’s your favorite tractor?” I’ve spent cab time in a lot of machines over the years, and they’re darn comfortable and productive. But my response to that question is, “Who’s your best local dealer?”

Who is that business that stands by the farmer? Who works with the customer to solve problems and can talk frankly about complaints? Because all equipment eventually needs maintenance, and a well-trained, forward-thinking dealer is valuable.

Some potential proactive tactics to use going forward:

Sit and chat. Consider a sit-down with your dealer before the harvest rush approaches to discuss your situation, explain your parts setup and find out the dealer’s plans.

Order early. If you’re planning on buying something new, get your order in even if you won’t receive it until 2023 (or later). Dealers are being asked to place orders earlier, so make the call if you’re ready to spend.

Keep your cool. If something fails, take a beat before calling — and that goes for dealers, too. We’re all under new stresses and pressures these days. Civility will matter for long-term support.

Maintain team spirit. Realize that your dealer is a local business just like your farm, and you win when it wins. A failed dealership is a blight on a local community and a service headache for all.

Small steps can make a big difference going forward. Open conversation can keep you informed of challenges and future equipment support issues. Remember, we’re all in this together.

TAGS: Equipment
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