DlO—Umcastar Farming, Saturday, April 21,1984
Machinery upturn
(Continued from Page D 8)
relieve commodity surpluses have
probably contributed to delayed
purchase decisions, as has un
certainty about future income,
exports, interest rates, and farm
programs. By most indications,
farmers are not convinced that
recent improvements in crop
prices and cash income assure a
sustained, general recovery in the
farm sector.
Beyond the economics of
agriculture are longer term trends
in farm numbers, farm size, and
specihzation. The machinery in
dustry is serving a limited and
shrinking U.S. agricultural
market. Fewer, larger, and more
specialized farms have fed the
trend toward fewer but larger and
more specialized pieces of
machinery.
Bigger machinery
The average horsepower of new
tractors increased from 63 m 1965
to roughly 96 hp. in 1983. Mean
while, the number of gram com
bines and tractors on U.S. farms
fell by 364,000 units and 122,000
units, respectively.
The industry has responded
gradually to the changing farm
economics and farm structure.
The movement toward larger,
more efficient farm machinery has
been going on for some time, but
the industry also saw an op
portunity to push ahead with a
buildup in production capacity.
Strong export growth throughout
the 1970’s and relatively high in
come levels, particularly in the
mid-1970’5, led to expectations of
strong farm profits in the years
ahead. Many manufacturers opted
for a marketing strategy based on
a full product line of diverse
machinery items to capture a
greater market share of what was
perceived as a still-expanding
market. Record sales in 1979
TRACTOR mL
SUNDAY, APRIL 29, 1984
To be held at Carroll County Agriculture
Center, Westminster, Maryland
CLASSES STARTING TIME-]
Local Stock 11A.M.
Modified Stock 1 P.M.
Super Stock 1 P.M.
4 WD Trucks 1 P.M.
Food and Refreshments Available
Admission *5.00
Children 7-12 & Senior Citizens *3.00
For Information Call
301/374-4067
2 Miles South of Rt 23 Along 772
Thru Monterey RD 1 Ronks PA
WES STAUFFER SALES & SERVICE GOOD’S STORE
RO 3 Ephrata
PA Phone (717) 738-4215
Ephrata Exit New Rt 222 ‘/j Mile West on Rt 322
Turn left onto Pleasant Valley Rd
THE WORLD’S LARGEST SELLING CHAIN SAW
seemed to support these decision.
Instead, the U.S. embargo on gram
sales to the Soviet Union, the
strength of the dollar, high interest
rates, the length and depth of the
global recession, and the low
commodity prices of the early
1980’s resulted in drastic sales
declines.
The deepening slump in
machinery sales after 1979 left the
industry with excess capacity and
growing inventories. As of
December 1983, total tractor and
combine inventories both added to
an approximate 300-day supply.
Factory rebates, discounts, and
other sales incentives haven’t been
enough to bring inventories down
to normal levels, although the
industry did make some progress
m reducing inventories last year.
New programs
To boost sales, J.I. Case, a large
tractor manufacturer, recently
announced a radically new reabate
program. IN conjunction with the
United Auto Workers, the company
offered a $3,000 rebate over a 2-
month period to individuals who
bought selected machinery. This
joint venture was possible because
of wage concessions made by the
union.
Reduced sales and large in
ventories have translated into
temporary and permanent plant
shutdowns. All major manufac
turers halted production Imes for
at least 30 days last year. Last fall,
the industry was turning out 264
tractors a day, just 34 percent of
production capacity.
The apparent industry strategy
is to limit output, and thereby
control production costs, reduce
inventories, and extend dealer
liquidity. The Farm Equipment
Manufacturers Association
reported that 188 dealerships
closed down in the first half of 1963.
Since 1979, more than 1,000, or
At the Country Mart
RD2 East Earl
Route 23 Just East of Blue Ball
717 354 4026
////
around a tenth of all dealers, have
gone out of business.
Given the unstable financial
conditions and structural ad
justments in the farm sector,
many experts say it is unlikely that
the machinery industry will ex
perience another sales boom
matching the one that occurred in
the late 1970’5.
As farms continue to become
large in size and fewer in number,
the overall demand base for
machinery will decline. Demand
for certain types of large
machinery will be boosted by these
changes, but not enough to ensure
adequate profit margins for
manufacturers that adhere to a
strategy of product diversity.
In addition, the U.S. farm
machinery industry is becoming
less cost competitive relative to
producers in some other countries,
such as Japan and Germany. As a
result, there is growing foreign
competition for the American
market, particularly in smaller
tractors.
Given these prospects, the U.S.
farm machinery industry can be
expected to specialize. Some
manufacturers have begun to shift
the emphasis of their organization
in the direction of specializing in
the production of innovative and
cost effective machinery. They
will buy other pieces of equipment
for their product line from more
specialized suppliers.
As manufacturers streamline
operations and trim product of
ferings, brand loyalty is becoming
unprofitable for many dealers who
feel they need to offer a diverse
product line to their customers. To
■ jMachine Worlc rw A,
■ Welding ft (Q^ai^
■Hr Fara Supplies
Hanlware F
CUSTOM BUILT WOOD
COAL FIRED BOILERS^
• Welders & cutting torches
• Custom made farm gates, etc.
• Custom built high pressure washers
• Stainless steel, aluminum and spot
welding.
• UPS Service
PLATE SHEARING AND
PRESS BRAKE WORK
USED HEATING FIN PIPES
SPECIAL $1.25/pt.
(New Pipe Price Approx. $lO/ft.)
D.S. MACHINE SHOP
DAVID E. STOLTIFUS
3816 E. Newport Road |
Gordonville PA 17529 B
1 Mile East of Intel course on Rt. 772
Chore-Time promotes 2
MILFORD, Ind. - Brad
Donahoe, # General Manager of
Chore-Time Equipment, Inc,
Milford, Ind., announced the
promotion of Marion “Bud” Lantz
to Manager, Chore-Tune Cage and
Watering Systems.
In his new position, Lantz is
responsible for the marketing and
engineering of the Chore-Time
Cage Systems and Swish Watering
product lines. Lantz had
previously served as Cage Systems
Coordinator.
At the same time, it was an
nounced Don Frush has been
named Manager of Engineering
for Chore-Time Cage and Swish
Watering Systems. In this new
position, Frush is responsible for
all engineering functions involving
the cage and watering systems
products. Frush had been Plant
Manager for CTB Plastics
Division.
Chore-Time manufactures and
markets automated equipment for
the care and feeding of poultry and
remain in business, many dealers
are examining and, in some cases,
severing traditional relationships
with individual manufacturers.
However, for manufacturers, this
transitional stage from product
diversity to product specialization
is likely to be a long-term process.
livestock. Swish Watering Systems
manufactures and markets a
complete line of poultry waterers.
SANDBLASTING
REPOINTING
WATERPROOFMG
From repairing drafty, leaking walls to
complete stucco removal and repointing,
exterior restoration or farmhouses is our
1 specialty 1
REASONABLE RATES
JAMES H. HOSIER
507 South Spruce Street
Lititz, Pennsylvania 17543
For information or a free estimate, return
coupon below.
Name
Address _
City
Phone; Area
State
Directions to your home:
Marion Lantz
■■AD
LANCASTER
FARMING
FOR COMPLETE
AND
UP-TO-DATE
MARKET
REPORTS
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