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AEM: Farmers buying bigger rigs
By STEVE BINDER
Illinois Correspondent

DECATUR, Ill. — Horsepower took center stage two weeks ago during the 58th annual Farm Progress Show, as John Deere and Case IH each unveiled what they called their largest combines.

Big rigs always attract a crowd, but they also are making news in the sales column in the United States, as purchases of the largest pieces of equipment are climbing back up after lackluster totals the past three years. “Many of the bigger farmers, with higher (commodity) prices, are wanting to reinvest in their largest expenditure items,” said Terry Snack, a Case IH combine product specialist. “Land is the biggest expenditure and the second-biggest is equipment.”

While farm equipment exports remain strong, with a 15 percent increase during the first half of 2011 compared to the same period last year, the Assoc. of Equipment Manufacturers (AEM) reports that sales of big rigs in the U.S. are up recently, as well.

For the month of July, according to AEM’s Flash Report, sales of equipment with 100 hp or more were up 10.3 percent, with 1,828 pieces sold. That was followed by a strong August showing, with large pieces sold up by 9.4 percent.

Sales of smaller pieces continue to be slow, down 11.4 percent and 0.4 percent for the same periods. “The trend as farms consolidate is (farmers) want larger equipment that covers more acres in less time,” said Barry Nelson, John Deere’s manager of media relations for worldwide ag and turf equipment.
Nelson’s company and Case IH each showed off their newest big rigs. For Deere, it was the S690 combine with 617 hp, a 30 percent larger cab, extensions that increase its grain capacity to 400 bushels and a 16-row head for 30-inch rows and an 18-row head for 20-inch rows.

Case’s new combine is its 9230, with a maximum horsepower of 560. The company also announced it will expand its Magnum Series to include a new 370 CVT model, which will be the highest horsepower mechanical front drive tractor on the market, at 419 hp.
Snack said the downturn in smaller equipment sales in the U.S. likely is tied to the sluggish economy, which has cut into tractor demand by smaller-scale farmers. “They are having a tough time right now” because of the economy, Snack said. “The market for smaller tractors with less than 100 horsepower, as a result, is down.”

Overall, equipment manufacturers are posting impressive numbers. John Deere recently reported revenue is up 22 percent and income is up 15 percent during the third quarter, a fifth consecutive quarter-over-quarter record.

Caterpillar reported revenue at 14.2 billion in the second quarter, its highest quarter in the company’s history.
9/15/2011