Things continue to change as they always have. I bought a new Kubota in 1983 when most people had not heard of or knew much about Kubota. One of best tractors I ever owned. Today as I drive around our area, the majority of the smaller tractors I see landscapers and others use are Kubotas. They are the tractor of choice and I see many of these same owners are buying the Kubota skid-steers. I know a couple of Kubota dealers and their complaint is the service department--once they sell a Kubota it rarely breaks down. Have you talked to a Massey dealer recently about their service situation?
In terms of production agriculture, costs will continue to rise. Interest rates are heading higher and will continue to do so. The BTO operators in many cases operate on credit. Lease rates will rise with interest rates. Have any of you priced any product recently made of steel? Have you priced the New John Deere Quad-Trac tractor, and compared it with the CaseIH?
I don't know how much profit there is in selling a new high horsepower tractor in a competitive market but I would guess it is less than you think. I would rather be selling a large number of smaller Kubota tractors and skidsteers in what looks like a growing market. What do you do with a 2-3 years old large tractor or combine coming back on lease or in trade? My guess is that both Deere and CaseIH have a lot of lease returns coming back they wish they didn't own.
If I were looking to own a tractor builder for the next 5 years, I would put my money in Kubota stock. Agco has a good contract with Cat and this gives them a good base to build on. What happens to Massey is a question. I see very few of the larger ones sold in our area and the smaller ones compete with Kubota.
If we get in a trade war and the Chinese reduce their purchases of pork and ethenol and expand it to other commodities I see farm prices going only one way and it is not up. At the same time production in much of the rest of the world is rising and China and others do not have to buy US grain.
I guess my conclusion is that Deere and CaseIH will continue to dominate the market for large machinery and tractors. What happens to the likes of Agco in the long run is a question. How profitable will this business be is a question, but with rising interest rates and potentially falling prices what does this mean for the future of farming. I think those who are highly leveraged will have a problem. US agriculture has faced problems in the past and has survived and prospered, but what does it mean when such a high percentage of our production is concentrated in the hands of fewer producers?
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Today's Featured Article - A Lifetime of Farm Machinery - by Joe Michaels. I am a mechanical engineer by profession, specializing in powerplant work. I worked as a machinist and engine erector, with time spent overseas. I have always had a love for machinery, and an appreciation for farming and farm machinery. I was born and raised in Brooklyn, New York. Not a place one would associate with farms or farm machinery. I credit my parents for instilling a lot of good values, a respect for learning, a knowledge of various skills and a little knowledge of farming in me, amo
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