Tariffs, weather affect machinery demand



Frank Holland | WILX 10 News

The Trade War and wet weather delaying harvesting has Michigan and other Midwest farmers feeling increasingly uncertain about the future and making big investments in things like new machinery is a risk some are not willing to take.

Farming is cyclical, a time to plant, a time to harvest and a time to buy new equipment.

“I’m being very conservative about large equipment purchases,” Phil Fuhr, owner Fuhr Family Farms, said.

Fuhr is a sixth-generation farmer.

He’s among many farmers in the quad cities-area of Illinois and Iowa who say they’ve been directly impacted this season by floods and rain in the Midwest as well as the ongoing Trade War reducing demand for soybeans.

“The U.S. is obviously in a worse position than they were a few years back to be buying, combine some tractors. I’m just trying to take a wait and see attitude, maintain the old equipment, and then if times improve, we’ll roll into some newer tractors or combines,” Fuhr said.

“We backed off on any capital purchases of anything, very high dollar at all, we’re going to postpone anything in the future for probably a full year, possibly two years out and just maintain the line that we now have it the income just isn’t there to justify a new high dollar purchase,” Bill Onken, owner of Onken Farms, said.

Major manufacturers are seeing the uncertainty of farmers hit their bottom line. Farming equipment shipments are down 18% year to date from 2014.

John Deere will lay off 160 workers later this month, and in November, after reporting a 6% decline in sales for its agriculture division last quarter.

AGCO reports sales of tractors are down 2%, combines down 3% in the first half of the year.

John Deere is the region’s largest employer and people who live here say they have a mixed outlook on downturns and layoffs.

“I believe the farming industry runs in cycles, I think that we have layoffs and shutdowns for awhile, but they always call people back,” one person said.

“It hurts everybody. It’s just like a downfall, machinery costs go up, and people lose their jobs, and it’s really bad,” one person said.

With trade talks scheduled to resume on Thursday, farmers say they are hopeful for a new deal, that will give them the confidence to buy new equipment.

Major manufacturers, Caterpillar and John Deere, say their sales are down and John Deere recently announced the company is laying off more workers.


To see the article click here