Farm Equipment Makers Can’t Keep Up
Farm equipment makers have whiplash trying to scale production back up from pandemic cuts and supply chain disruptions to meet seasonably high sales spikes.
Rewind: This time last year, the havoc COVID-19 would wreak on the global economy and supply chains everywhere was just beginning.
Were you thinking about purchasing farm equipment amidst all that chaos? Many equipment makers didn’t think so, leading to production slowdowns.
However, epic commodity prices and better financial outlooks have farmers wanting to soup up their aging fleets with improved technology.
By the numbers:
- Tractor sales shot up 81% in March compared to the same time last year
- More than 62,000 tractors from all categories have sold in 2021, a 52% increase
- Combine sales increased 17% in the first three months of 2021
So what exactly is the holdup?
Farm equipment companies are at full throttle to keep up with demand but are cinched by the tightest supply in North America in 18 years.
AGCO, one of the largest farm machinery makers, has their procurement team pulling a Dave Ramsey to get their 30-week emergency supply of semiconductor chips, steel and plastics stocked. All to keep tractors and other heavy equipment rolling off the lot.
Their version of beans and rice. Equipment makers are moving production away from some U.S. locations due to headcount restrictions and shipping supplies to plants that are normally sourced locally (ex: sending tires to Brazil because of their rubber shortage).