According to a recent news release from Alberta Agriculture and Irrigation, higher combine prices do not yet appear to have affected their sales in Canada. Increased market demand has driven higher sales each year since 2020. However, it noted, recent data suggests that combine sales, while strong on a year-to-date basis, tell a different story when measured year-over-year.

Good crop prices and record-high farm income may have previously buffered the effect of growing combine prices on buyer behaviour, the province said. That gravy train has since hit the brakes.

“Surprisingly, recent data from the Association of Equipment Manufacturers show combine sales in Canada up 5.7 per cent year-to-date in July, while U.S. sales are down nearly 18 per cent year-to-date,” read the release.

“Sales in Canada for the month of July 2024, however, are nearly 28 per cent lower compared to July 2023. This may indicate tougher market conditions ahead.”

The release also noted the technology-rich nature of newer combines, which may be playing into consumer demand.

“The level of technology has increased dramatically and newer machines are equipped with GPS, computer sensors and a range of automatic features,” it noted.

Inflation, unsurprisingly, is also playing a major role. Although the price of a combine has increased in real terms, general inflation has also “contributed substantially” to increasing sticker prices, said the department.

The release also referenced the effect of the exchange rate between Canada and the U.S. As of Aug. 29, the Canadian dollar is worth 74 cents of a U.S. dollar, according to Google Finance.

“Many combines sold in Canada are manufactured in the U.S., and so the exchange rate has an effect on prices as well,” the release noted. “Combine prices seem to be more suppressed when the Canadian dollar is strong vis-a-vis the U.S. dollar, such as the period from 2010 to 2012, than when the Canadian dollar is weak.”

The post Combine market holding, for now appeared first on Canadian Cattlemen.

According to Alan Vaage, ruminant nutritionist for Jaylor, the biggest problem with feed supply in beef cattle production is wastage as it can be selectively eaten. By Vaage’s estimate, a TMR mixer can save up to 20-30 per cent in forage use, or even higher for some operations. But it’s not just about the cost savings. By mixing a well-balanced ration, animal nutrition is optimized, and with that, a cow’s potential gains. Hear more about it in the video above.

So, how much extra work is it have another piece of equipment in your yard? At Ag in Motion, Brad Backs (below) with Jaylor spoke about some of the basic maintenance you’ll likely to encounter with a TMR mixer and at least one wear item to keep a close eye on.

The post VIDEO: How beef cattle operations can benefit from a TMR mixer appeared first on Canadian Cattlemen.

Shares of the world’s largest farm equipment maker rose six per cent, lifting peer Caterpillar, which also reported a profit beat last week amid moderating demand, nearly three per cent.

Higher prices, implemented two years ago following supply chain complications and a surge in demand for industrial and agricultural equipment, have helped U.S. machinery makers to shield their profits from an industry-wide slump.

“Deere’s pricing power was reflected well in Q3 as price helped to dampen impacts from contracting volumes,” CFRA Research analyst Jonathan Sakraida said.

Deere maintained its 2024 net income at about US $7 billion, even as sales of new machines have shrunk amid a decline in crop prices and high borrowing costs, which have also forced dealers to limit inventory restocking.

U.S. farm incomes are forecast to plunge in 2024 due to a sharp decline in commodity prices, heightened production costs and shrinking government support.

“By keeping inventories in check, we have been able to maintain solid price realization,” said Deere’s director of investor relations, Josh Beal.

Deere also said it expects an improved favorable price realization in its agriculture segments in 2024 compared to its previous targets.

For the third-quarter, Deere reported a net income of $6.29 per share, compared with LSEG estimate of $5.63, while net sales and revenue decreased 17 per cent to $13.15 billion.

“We’ve prudently and proactively adjusted production schedules in our large agriculture business at a faster pace than ever before, in order to reduce field inventory in our end markets,” CEO John C. May said.

Deere said in June it would cut some production jobs and reduce salaried employees to keep a tight lid on costs.

The post Deere beats profit targets as strong pricing, cost cuts counter slow demand appeared first on Canadian Cattlemen.

“This is certainly completely disruptive to our equipment dealers that are using the CDK platform,” said John Schmeiser, president of the North American Equipment Dealers Association, Canada.

Tech firm CDK’s software was taken offline last week after a cyberattack by the BlackSuit ransomware group. CDK is being asked to pay tens of millions of dollars by the hackers. Reuters reports that the company expects dealers to be offline until at least June 30.

CDK provides business management software to dealers of all makes of farm equipment, so major dealers of John Deere, CNH and are working without digital systems across the country. CDK is also the leading provider of management software to automobile dealers and thousands of those dealerships are offline.

CDK says it has 15,000 North American dealers on its system.

Wawanesa, Man. farmer Jeff Elder said he was able to get the parts he needed at a Rocky Mountain Equipment dealership in Brandon, however staff were relying on memory to find parts or looking them up on their phones.

“They had resorted to writing down orders on paper,” said Elder via text. “He couldn’t invoice me and said I would receive an invoice by email whenever they could get that done.”

Rocky Mountain Equipment declined to comment.

“Everything is being done manually,” said Schmeiser. “You can just imagine the amount of time that our dealerships are spending on manual processes.”

Parts are tracked and managed through digital inventory systems.

“We have to actually know where the part is, in, in a bin, to go out and find it and fulfill that customer’s order without using our computer system to tell us where it is or how many that we have on order.”

Invoicing also has to be manual, said Schmeiser.

Equipment can be sold, but the process is manual and inventory isn’t available on a computer system. Tracking orders is also challenging.

Farmers are spraying and preparing combines for harvest so dealers continue to work as best they can.

“We can’t shut down the business, we have to take care of the customer,” Schmeiser said. “Dealers are really managing through this as best as they possibly can.”

Schmeiser said the situation will be a wake up call for the industry and will place even more emphasis on cyber security.

“I think as an industry as a whole, this whole situation is going to be looked at, at every sector, from the manufacturer point of view and the equipment dealer,” he said.

“We’re asking our customers or farm customers to be a little bit patient with our dealers, as we work through this problem. This is this is an issue that is not only frustrating for our equipment dealers, but can be frustrating for our customers as well.”

—Headline updated June 26.

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The cuts will reduce “overlap and redundancy in roles and responsibilities”, Deere disclosed in a filing, following media reports from the past week about layoffs.

The news comes weeks after the company trimmed its annual profit forecast for the second time and projected steeper declines in sales of large agriculture equipment.

Lower crop prices are leaving agriculture equipment sellers with an excess of unsold tractors and combines, leading some to offer discounts and suspend new orders.

The U.S. Department of Agriculture has forecast farm income would slide 25.5 per cent to $116.1 billion (C$159.1 billion) this year from 2023.

In Canada, net cash income is forecast to decline 14 per cent to C$21.3 billion as cash receipts are forecast to fall slightly, with expenses modestly increasing, Agriculture Agri-Food Canada said earlier this year.

—Reporting for Reuters by Abhijith Ganapavaram and Nathan Gomes in Bengaluru, with files from Glacier FarmMedia

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The completion of the transaction was subject to certain regulatory approvals which have all been met, Linamar said in a news release.

Linamar, best known as an auto parts manufacturer, announced it would acquire the Saskatchewan-based firm in late December.

“Linamar’s long term vision is to focus on six markets where we see significant market and technology evolution over the coming decades as a result of key global trends that are under way,” said Linda Hasenfratz, Linamar’s executive chair and CEO, during an online press conference in December. “Food and agriculture is a key market in this long-term vision, and we are rapidly enhancing our footprint in that market.

“We’re calling this our third down project,” added Jim Jarrell, Linamar president and COO. “This is the third short-line acquisition we’ve done to build our powerhouse company, to hit the strategy of feeding the world. If you go back to the day when we bought MacDon, this (Bourgault) was a clear target and discussion point we thought was complimentary. Also as part of the transaction we’re acquiring the business of Freeform plastics and the Highline manufacturing line”

Both Freeform Plastics, which builds plastic tanks for ag applications, and Highline, an implement brand, are divisions of Bourgault.

Hasenfratz said the focus at Linamar is on acquiring shortline equipment manufacturers that produce specialized products which the major manufacturers don’t hold a dominant market share in.

The deal saw Linamar buy 100 per cent equity in Bourgault for CAD $640 million. Current president Gerry Bourgault will step away from the company, although the remainder of the management team will remain in place.

Linamar said it doubled MacDon’s business if five years and hopes to do the same with Bourgault.

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“Linamar’s long term vision is to focus on six markets where we see significant market and technology evolution over the coming decades as a result of key global trends that are under way,” said Linda Hasenfratz, Linamar’s executive chair and CEO, during an online press conference. “Food and agriculture is a key market in this long-term vision, and we are rapidly enhancing our footprint in that market.

“I feel like our team has really hit it out of the park this year, finalizing three acquisitions. All three business bringing excellent technology to the table and strategic value.”

“We’re calling this our third down project,” added Jim Jarrell, Linamar president and COO. “This is the third short-line acquisition we’ve done to build our powerhouse company, to hit the strategy of feeding the world. If you go back to the day when we bought MacDon, this (Bourgault) was a clear target and discussion point we thought was complimentary. Also as part of the transaction we’re acquiring the business of Freeform plastics and the Highline manufacturing line”

Both Freeform Plastics, which builds plastic tanks for ag applications, and Highline, an implement brand, are divisions of Bourgault.

Hasenfratz said the focus at Linamar is on acquiring shortline equipment manufacturers that produce specialized products which the major manufacturers don’t hold a dominant market share in.

In the press release announcing the takeover, current Bourgault president Gerry Bourgault commented, “We are excited to have our team of over nine hundred people in Saskatchewan, and over one thousand worldwide, join the Linamar family. Linamar has a proven track record for not only successfully integrating acquired companies, but also for their manufacturing expertise and business execution overall.”

The deal will see Linamar take 100 per cent equity in Bourgault for CAD $640 million as current president Gerry Bourgault steps away from the company, although the remainder of the management team will remain in place.

“Bourgault is a company we’ve long had our eye on,” said Hasenfratz. “We like the technology. We like how the business is run and how it complimented our existing lineup of products. So we’ve been talking to them on and off. The timing was right. The family was ready to make an exit. It comes at a time when all of our business can complement and create growth.”

When it acquired MacDon, that company had sales of roughly $500 million, about the same as Bourgault does now. Linamar has managed to push MacDon’s current sales into the range of $1 billion. Hasenfratz expects to be able to achieve the same level of growth with Bourgault. She thinks the company can do that by increasing Bourgault’s global reach and cutting manufacturing costs by including it in Linemar’s current procurement processes.

“We have the ability to link and leverage our purchasing efforts,” confirmed Jarrell.

“We see excellent growth potential with the business,” Hasenfratz added. “It’s not dissimilar in size to what MacDon was when we acquired it five years ago. We are selling now in more than 30 countries with nearly 2,500 dealers and distributors around the world. We’ve really created quite a broad strategy around our agricultural products.”

The deal is expected to be finalized in the first quarter of 2024.

Said Hasenfratz: “We doubled MacDon’s business in five years. We hope to do the same with Bourgault.”

The post Bourgault becomes third shortliner acquired by Linamar since 2017 appeared first on Canadian Cattlemen.

“Farm revenue is a main driver in equipment sales,” said said J.P. Gervais, FCC’s chief economist, in a Nov. 16 news release. “This year, the drought in western Canada has impacted overall production, reducing cash flow for some producers.”

According to FCC’s 2024 outlook for the Canadian farm equipment market, new sales are projected to be softer in 2024 based on three factors: higher interest rates, elevated equipment prices and a decline in commodity prices, wrote Leigh Anderson, senior economist with Farm Credit Canada (FCC), in a Nov. 15 article on FCC’s website.

Robust sales of new farm equipment in 2023 was due in part to a correction of supply roadblocks experienced during the pandemic, wrote FCC senior economist Leigh Anderson.

“Strong sales in 2023 reflect the resolution of supply chain issues and record-high crop receipts in 2022 and the first half of 2023,” he said. A “more cautious environment” driven in part by drought in western Canada and a slowing Canadian economy will likely see a decline in unit sales of 100+ horsepower and lower tractors in 2024.

Implement sales look more positive, wrote Anderson.

“Canadian implement manufacturing dollar sales are expected to finish higher in 2023 due to price inflation on raw materials used in manufacturing,” he said.

“Both 4WD tractors and implement manufacturers (e.g., air drills) faced delivery issues and low inventory levels throughout 2023, which are driving part of the increase in our 2024 projections.”

Used equipment — a go-to for many producers during the pandemic — has already seen a downhill slide in sales. But there are some bright spots.

“Sales of used equipment this year for combines and 4WD tractors have already eased by approximately 20 per cent,” wrote Anderson.

“However, the number of used air drills sold continues to be strong, up 26 per cent this year due to reduced deliveries of new manufactured units and subsequent trades over the previous few years.”

Anderson outlines a few trends to monitor in 2024. These include ongoing inflation and high interest rates plus the age of Canadian farm equipment.

“The strong sales during the 2008 to 2014 period are early indications that the 4WD tractor, 100+ HP tractor and combine fleet is starting to age when looking at the rolling average of five-year sales relative to 10-years on new equipment to estimate the replacement cycle age,” he wrote.

“While replacement cycles can be altered and older equipment can be serviced and overhauled, a slowdown in new equipment sales could be short-lived. Sales could improve in the second half of 2024 and beyond if interest rates decline and producers move to upgrade their aging fleet.”

Although commodities have come down from their 2022 highs, record-high crop receipts that year and the first half of 2023 should place many farmers in a “strong financial position” to absorb rising interest rates and equipment prices.

“While the drought in western Canada means overall reduced production, there are regions where the crop was better than expected and will support the cash flow of producers.”

— Jeff Melchior reports for Alberta Farmer Express from Edmonton.

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The central leadership had said in 2020 that the country’s seed industry was a weak link in the food chain and needed to make better use of science and technology to achieve a turnaround.

“It is necessary to keep an eye on the frontiers of the world’s agricultural science and technology,” the official Xinhua news agency quoted Xi as saying at the central rural work conference held in Beijing over Friday and Saturday.

The president urged China’s agricultural sector to “vigourously improve” its science and technology, with more efficient innovation.

Xi urged the sector to address issues with innovation, such as the rate of conversion into commercial applications and a lack of co-operation between research teams.

China has invested large sums of money in basic research for agriculture but has few large commercial companies that invest in long-term research and development to bring innovative solutions to market.

— Reporting for Reuters by Dominique Patton, Roxanne Liu and Bernard Orr.

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U.S.-based NX9 is a small software house specializing in so-called ‘ISOBUS’ technology for agricultural equipment, an industry-standard communication protocol which allows machines and implements to talk to each other, CNH said in a statement.

No financial details of the deal were disclosed.

The investment builds upon the company’s strategic effort “to more efficiently innovate and develop products in the precision agriculture space,” CNH Industrial said.

The Italian-American group, which is controlled by Exor, the holding company of Italy’s Agnelli family, will complete on Jan. 3 a plan to spin off its truck and bus units and its FPT engine division and list them under the Iveco Group name.

After the spin-off, CNH — the world’s second largest agricultural equipment maker after Deere and Co., operating under the New Holland, Case IH and Steyr brands — will focus on its agriculture machine and construction equipment businesses.

Earlier this year the group struck a US$2.1 billion deal to buy Raven Industries to boost its precision agriculture and autonomy operations. CNH on Tuesday announced the closing of that deal.

Last month it entered into a multi-year licensing agreement for electrification technologies with Monarch Tractor, a U.S. company focused on fully electric autonomous tractors.

— Reporting for Reuters by Giulio Piovaccari in Milan.

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