Josh Blatz, the Precision Land Management specialist with Gellings Implement, a Case IH-New Holland dealership in Eden, Wis., says aftermarket precision equipment sales will likely struggle on their own going in to 2017 because so many OEMs' new tractors come from the factory with many precision components pre-equipped.
In our recent 2017 Ag Equipment Intelligence Dealer Business Outlook & Trends report, the results of the annual survey showed that cautious optimism seemed to be growing around projected precision farming equipment sales for next year.
GPS/precision farming products, which had earned the surveyed dealers’ #1 ranking from 2006 to 2015, had fallen as low as #10 on the list of 17 product groups last year. It made a comeback for 2017, jumping to #3 on the dealers’ list for the year ahead. A little over 30% of dealers believe these products will produce increased sales in 2017.
Josh Zuck, integrated solutions specialist with Sloan Implement in Lanark, Ill. feels that the data does back up his own projections for the coming year.
“I’m talking to customers that are backing off a bit from their big equipment purchases to upgrade things like planters instead,” says Zuck. “So yes, with our current direction, I do see an increase in precision sales for 2017 over 2016.”
Despite this, he notes that because John Deere didn’t have any notable big releases in their precision farming equipment line so far this year, he’ll likely have trouble targeting his early adopters.
“Without new products out, it’s a bit difficult to sell stuff to the guys who have all the latest and greatest,” he says. “A lot of them with 3,500 acres and above seem to already have what they need.”
It’s with customers who may have flown under his radar in years past that he thinks he’s going to have the most luck with in 2017. Preaching and demonstrating the cost savings associated with precision upgrades are going to be his best bet to secure this demographic, he says.
“We’re looking to get out there to demo auto-steer for the older guys still moving markers,” Zuck says, “Old planters are a growth area too — there are still plenty of old Kinzes and John Deere 7200s out there. Planters are just bushings, bearings and chains, you can put money into them and make them like new.”
He finds that pitching precision products to holdouts in the form of payback time has been especially effective.
“Row clutches are going to pay for themselves the first year, you have to explain that,” says Zuck. “I try to get them to see most precision upgrades as a 2 or 3 year purchase. If someone buys into RTK for $9,000 and has 30 acres worth of waterways on his operation, it’ll only take him about 3 years to pay it off. We’ve got 70 guys on RTK right now and my goal is to have 90 by springtime.”
Of course, regional variations seem to apply. For instance, precision farming specialist Doug Rohlf of Torgerson’s, a Case IH dealership network based in Great Falls, Mont., plans to slow down on their RTK operation because of declining demand.
“We have about 20 RTK base stations set up, but the wind is out of my sails on towers right now,” he says. “I’m not putting any more up because of RTX. Vertical precision isn’t as important where we are and we aren’t doing water management. At our Billings location though where a lot of the customers have mostly row crops, there is still a demand.”
RTX is a satellite-delivered correction services whereas RTK offers corrections using base stations.
Also, Rohlf notes that much of the appeal of aftermarket precision equipment seems to be in decline because of what OEMs are rolling on to the shop floor.
“Sales of the Trimble and aftermarket side of precision equipment has dropped off big time and will probably continue to do so with the advent of all the factory-installed precision gear,” says Rohlf. “Most people that want GPS in our area, have it by now.”
Precision Land Management specialist, Josh Blatz with Gellings Implement in Eden, Wis., says the same of his aftermarket sales.
“New tractors are coming so complete to the point where you aren’t even able to remove some of the precision options,” he says. “It’s not like our Trimble sales are going to disappear, but the market is getting tougher for them.”
Of course, it doesn’t seem as though it’s all bad news. Rohlf sees promise in keeping the new precision-laden implements up and running and offering a fuller suite of services in the dealership.
“A lot of our farmers out here work 5,000-15,000 acres so they’re buying new tractors, combines and sprayers almost every year. We’re also getting into selling those new Case IH Precision air carts with section control,” he says. “Since they all come with guidance, I am doing a lot of software upgrades, firmware and calibrations. We’ve also got Agri-Trend coaches at our dealership so they take the agronomic, data collection and prescription side of things, which are on the rise.”
Blatz says the shift away from aftermarket precision has him refocusing on demonstrating the capabilities available to customers in the fully loaded OEM equipment.
“We don’t have a planter line so we don’t get in the door with the row shut offs, which is a precision stepping stone for a lot of people,” he says. “So for us, it’s more about focusing on a precision angle once you get a tractor out to demo and showing the abilities of the stock precision hardware.”
Blatz does note, perhaps recapturing some of the optimism suggested in our survey, that there seems to be some wind at the back of precision equipment’s popularity among his customers.
“With farmers everything is still word of mouth, but now that word is, “All the other farmers are doing this (using precision equipment),” he says. “Planting, harvesting and spraying with precision equipment is the only way to do it now. People who were used to renting their tractors out might find that renters aren’t interested in a tractor that doesn’t have GPS. If you’re renting it out, you’ll need some type of guidance on it — those sorts of things drive the market. It’s a bit of forced adaptation.”