Ag equipment sales reflect changes in farm sizes

The Northern Colorado farm equipment market is getting smaller – smaller tractors, smaller utility vehicles. What is fueling this miniaturization in equipment? Smaller parcels of land and part-time farmers.

The trend of increased sales of smaller equipment has been seen for at least five years, according to local agriculture equipment dealers. These same dealers say it is a sign of the changing agribusiness climate locally – fewer farms of larger acreage needing less equipment. The other side of the equipment equation includes “hobby farmers,” who own acreage and need some equipment and supplies, but not to the extent of their full-sized counterparts.

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“The flavor of our sales is now 75 percent consumer utility and 25 percent agriculture sales,´ said Jay Knutson, owner of Longs Peak Equipment near Longmont.

Knutson said his dealership’s sales began to change as explosive suburban growth began in nearby Frederick, Firestone and Dacono.

“What we started to see 10 years ago is now encroaching into other areas, including Greeley,” he said.

As a voice of experience, Knutson suggests accepting the changes urban growth brings and carrying product lines with appeal for smaller farmers.

He also predicts consolidation in the market because of the lack of market size.

As Front Range farmers sell their land for development, equipment dealers are competing with dealers in other parts of the state for customers.

Longs Peak Equipment specializes in John Deere equipment and Knutson said the company is looking for its dealers to consolidate to remain strong in the marketplace.

“They are looking at having a few dealerships from joined ownership groups,” he said. “What we will see then are bigger dealers instead of seeing one on every block.”

The experiences of Northern Colorado dealers are not limited to the local area; instead, consolidation is affecting dealerships throughout the western states.

“We are still continuing to see consolidation of dealerships,´ said Steven Kost, executive vice president of the FarWest Equipment Dealers Association. “We are seeing more hobby farmers with 10 to 20 acres and the suburban horse market has grown substantially over the past few years. As the nationwide trend of bigger farms continues we are seeing dealers carry specialty equipment chosen particularly for an area.”

Moisture helps overall market

“For four of the past five years the market has been gone,´ said Buddy Truesdell, owner of B&G Equipment in Greeley. As drought conditions lessen in the area, farmers are willing to spend more money on equipment and on maintaining their current equipment.

“We have seen more sales of used equipment and with this year seeing better moisture the bigger buyers are getting their equipment updated or tuned up,” he said.

Truesdell said growth in Weld County has affected his sales of larger equipment, but smaller compact utilities are helping make up the difference.

“The change has been drastic – we used to sell 30 to 40 of our 100-plus horsepower tractors in a year,” Truesdell said. “Now we are selling eight to 10 a year.”

The decreasing size of farms is also having a negative impact on the market because less equipment is needed.

“Farmers are not good about sharing, so when three farmers owned the land it would require three tractors,” he said. “Now, one guy may own the land and he only needs his one tractor to run the land.”

Across town, Duane Wallin, general manager of Bi-State Machinery in Greeley and Fort Collins, is also seeing an increase in sales this year.

“We have found that with early water this year people have released their equipment to service; in the past they would only have it worked on if it had to,” Wallin said. “Our parts sales are up 15 percent from last year, service is up 8 percent and complete goods (including equipment) are up 5 percent.”

Wallin noted used equipment is selling quicker than new equipment because the John Deere factory had to catch up on orders.

“This turned out to be a positive thing because it firmed up values of used equipment by 15 percent,” he said.

Wallin also said he is seeing an increase in skid steer sales, mainly because of the increase of construction in the area. Contractors use skid steers for various projects around construction sites.

Raymond Taggert, owner of Longmont Farm Supply, has seen many changes in the industry in the 51 years he has owned his dealership. He said the biggest change by far has been the growth in the area, led by the residential market.

“Who ever would have thought I could watch an American Furniture Warehouse being built across (Interstate 25)?” he said, referring to the 550,000-square-foot big box store planned just east of I-25 in Firestone.

Taggert he sells primarily smaller equipment with less than 40 horsepower engines, but he still sells the occasional large tractor to farmers in eastern Colorado.

“It is hard to say how large my sales area is because I sell in the mountains and up into Alaska,” he said. “The biggest thing is, I don’t see ag growing without knocking houses down,” he said.