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Options for equipment dealers to reinvent themselves

A senior agricultural analyst says ag equipment dealers will need to reinvent themselves to survive another year of declining sales and contracting farm incomes.

Ken Zuckerberg with Rabobank says based on their research it could be a long time before farmers are able to purchase new equipment.  “The median farmer in the Midwest will not have enough excess cash flow until mid to late 2018 and possibly extending to 2019,” he says.

He says that puts added pressure on equipment dealers to stay afloat and while consolidation remains a viable option to improve profitability, Zuckerberg says there are better ways to remain in the black.  “In this environment in precision ag and ag technology is actually cross-selling those data-types of services in conjunction with some of the new start-up and emerging companies that are commonly referred to as big-data providers,” he says.

He says dealers can also expand their service and parts capabilities; diversify the equipment they sell by adding small and medium sized tractors as well as high-tech equipment like robots and drones; and add fee-based agronomic services to better serve existing customers.

Zukerberg says equipment dealers have to adjust to the new reality of lower commodity prices and farm incomes to survive.

AUDIO: Ken Zuckerberg, Senior Analyst, Rabobank