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Growing demand bodes well for agricultural equipment

Untapped potential for agricultural growth in South America, Russia and Eastern Europe, combined with a growing middle class in developing nations, bodes well for the future of agriculture, say John Deere vice presidents John Lageman (sales, U.S. and Canada) and Mark von Pentz (agricultural marketing, U.S. and Canada).

Both were on hand to unveil the 8030 tractor series and other new equipment at a recent North American John Deere dealer conference in Fort Worth, Texas.

“We are very bullish on agriculture,” Lageman said. “In the major production areas around the world population trends are rising. In the population centers of developing nations, standards of living are improving. People are making changes in their diets and asking for more dairy and beef. That's a good thing for agriculture.”

“We see untapped potential in South America (for market growth),” Pentz said. “Fluctuations in currency this year may be a factor.” Long-term, however, he sees South America as an important market for agricultural equipment.

“Russia also has untapped potential as does other Eastern European countries. Russia has one-fifth the wheat production of the United States with similar acreage. They lose production to harvest and storage inefficiencies.”

They said John Deere innovations, including improved fuel efficiency, better operator comfort, and more horsepower, provide tools to make farmers more productive.

“We're selling the 8030 series around the world,” Pentz said. “We may offer different options, depending on the location.

“Three customer concerns drive our company,” he said. “We are customer focused and customers tell us they want reliability, productivity and comfort, in that order. Our new introductions address all three issues.”

“We start with our customer,” Lageman said. “Research and development creates products our customers need.”

Both said the new 8030 tractor series and improvements in the guidance and monitoring systems, meet consumer demands.

“We are pleased with the new tractors,” Lageman said. “The new EPA requirements put no real pressure on us but it was phenomenal that we met those requirements and made the tractors more fuel efficient and more powerful at the same time.”

He said the improved GreenStar Display (GSD) 2100 or 2600 color monitors show critical tractor functions and improve operator efficiency.

“The guidance system reduces overlap by 8 percent to 10 percent, saving chemical and fertilizer costs. Farmers see that advantage immediately.”

He said growth in guidance system acceptance would be “overwhelming. Also, our ability to retrofit this system onto older tractors (including other brands) will be important. Farmers have a lot of good tractors out there that can be upgraded.”

They said among serious producers, farmers without guidance systems are in the minority. “Most take advantage of the cost efficiency that helps them compete in a global economy,” said Lageman.

Comfort also improves productivity. “Comfortable seating and surroundings reduce fatigue,” Pentz said. “Farmers have less downtime. Ergonomic seating, guidance systems, and on-screen monitors all improve the ownership experience.”

Lageman says the new tractor line will be compatible with bio-fuels. “We are working with industry on compliance issues and bio-fuels,” he said.

A 2 percent bio-fuels use rate would go a long way toward reducing demand for foreign oil and also in boosting demand for soybeans and grains.

“At a B2 or B5 (percentage bio-fuel use) we see a tremendous demand for soybeans, and that's a realistic target for the industry.”

Outlook for 2006, they said, is promising. “We're excited about the new tractor lines,” Lageman said. “Our dealers are enthusiastic and excited about these new tractors.”

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