The shortage of the supply chain drives up prices. Farmers fear it will get worse.


Joel Everett said he was stunned when a lightly used 2009 John Deere tractor sold at its last auction in Strawberry Point, Iowa, for tens of thousands of dollars more than it cost fresh off the production line over a decade ago.

Bought new for $ 109,000, the tractor sold for $ 143,000 at auction, he said. This is not an isolated incident, said Everett, who has run Joel’s Tractor and Auction since 1992. A lot of farm equipment, especially used tractors, is selling 30 to 50 percent more than two years ago. in his auction house.

“It was unreal,” Everett said. “Our last sale was the biggest dollar sale we’ve ever had, and we plan to have another one in three to four weeks that will blow this one up.”

It is increasingly difficult to find quality agricultural equipment in the middle supply chain scarcity, said many farmers and experts, and its scarcity drives up prices and raises questions about whether farmers’ crops and next year’s planting season could be affected.

Some farmers fear the shortage will worsen after 10,000 John Deere workers went on strike last week. The company had posted record profits this year, and members of the United Auto Workers union quit work at 14 manufacturing plants when it refused to raise wages above 6%.

“We are concerned about that for sure,” said Eric Hopkins, senior vice president of Hundley Farms, which owns 20,000 acres of vegetables primarily in central Florida. “They’re already running out of stocks and parts right now. A strike will only make things worse, make them worse. If it lasts awhile, not only will they not have new tractors, but when you have a breakdown and there are no parts, your tractor will just sit there, unable to harvest or plant a crop. “

Image: John Deere workers strike for a contract (Scott Olson / Getty Images)

The feelings of farmers about the John Deere strike are mixed. Many said they supported the workers’ desire for a better deal but worried about the effects of a strike that lasts for weeks or months.

A long strike could hamper the country’s food supply chain, which has suffered from shortages since the onset of the coronavirus pandemic, further delaying John Deere’s ability to deliver products and parts in a timely manner. Farmers also fear that a delay will affect their increasingly thin margins.

It is not known how long the strike could last and to what extent John Deere will be further slowed down. He said he has put in place a continuity plan, calling on non-union salaried workers to maintain a certain level of production.

Crops can be damaged if planted or harvested late, and the insurance provided by the Ministry of Agriculture requires that the seeds be planted and the produce pulled up by a particular date to be fully insured.

This is a problem highlighted by David Misener, who travels the country from May to November as a customary farmer. He brings agricultural equipment and harvests the crops of others for them. His deadlines are tight, but he has had to wait long periods for repairs and parts several times this season – an unusual occurrence.

More recently, while working in a field for a farm in South Dakota this month, a bearing fell on a combine, destroying one of its trees. The only place the local dealership could find a replacement part was in Canada, and Misener had to sit on his hands for a week until he arrived.

“It is extremely crucial that we harvest on time because that can decide whether you have something to harvest or nothing,” said Misener.

Image: David Misener works on a combine harvester with his sons.  (Courtesy of David Misener)

Image: David Misener works on a combine harvester with his sons. (Courtesy of David Misener)

The threat to the bottom line is also frightening as the prices of equipment rise, along with those of fertilizers, seeds, grains and other common agricultural production resources.

Matt Ackley, Marketing Director of Richie Bros. Auction, one of the world’s largest auction sites dedicated to the sale of heavy equipment, said interest and prices for farm equipment are increasing dramatically.

The Used Tractor Price Index at Richie Bros. increased 19% from last year, Ackley said. The company’s website, where it hosts online auctions, attracted more than 161 million visitors and 1.3 million bidders in 2021, an increase of 15% and 19% respectively from the same period one year ago.

Ackley shared an auction for a tractor that was struck by lightning this year. It was auctioned off by an insurance company as a salvage. The tractor received another 393 bids on Monday as potential buyers battled for the opportunity to smash it for spare parts.

“As you get any kind of disturbance, especially from a [original equipment manufacturer] point of view – like this strike – at an already stretched supply chain, you get a pretty big backlog, ”said Ackley, whose team has been tracking supply chain gaps since the start of the pandemic. “People are fighting vigorously for what is left. “

Items that farmers can repair on their own are also increasingly sought after and hard to find.

It is an ongoing challenge. Farmers say that as farm equipment becomes more technical digitally, companies like John Deere have limited ability for farmers to repair their own tractors, combines and other field equipment.

Wheat rises as corn gains may boost demand on livestock farms (Daniel Acker / Bloomberg via Getty Images file)

Wheat rises as corn gains may boost demand on livestock farms (Daniel Acker / Bloomberg via Getty Images file)

Tim Riley, an organic farmer from western Kansas, said he and other farmers around him had to get creative due to the shortage of parts and the challenges of repairing their own equipment.

“Some electronic parts have been very difficult to obtain lately for the guidance systems on some of these tractors,” said Riley. “It’s really hard to do anything with the way they’re highly computer driven, so that’s a problem. “

When the guidance system failed on Riley’s tractor, he had to call his neighbors to ask if he could disassemble the GPS systems from their rigs for use on his own. The local dealership did the same and called customers for help when the GPS on a tractor Riley had rented broke this year.

Riley is also worried because John Deere is already so late in production that he is unable to purchase a new tractor for the planting season next year.

“As we approach our spring season, we really need a new tractor, but they told us we won’t be able to get it for another year to a year and a half,” he said. , adding that he had to buy a used tractor for his farm over the next few years.

Everett, who operates the auction house in Iowa, said he knew several farmers who bought new John Deere combines more than eight months ago and still haven’t bought them and have bought different combines just to get through the season.

Sometimes he was able to encourage farmers to buy two of the same tractor and cannibalize one for parts.

“I told the guys who want to buy the new things at our auctions if you want a newer or really cool one, that’s all you get,” he said. “You could do this before, but now our supply chain is in shambles.”


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