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Equipment Sales Down, But Cautious Optimism For 1989

September 22, 1988

LAFAYETTE, Ohio (AP) _ Financial uncertainty caused by the drought are forcing farmers to hold off buying new machinery for their fields, dashing hopes for a banner year in the farm equipment industry, according to some salesmen.

″This year will certainly slow down next year, maybe not as much, but there wil be a cloud hanging over us. It takes a lot of years for a farmer to recover a loss,″ said Doug Hennessey, a territory manager for White New Idea Farm Equipment Co., based in Coldwater.

″Normally, they’ll trade it in on a 3-5 year basis, and this would’ve been the greatest fall in eight years. But then the drought hit and delayed their opportunity to buy,″ said B.E. Miller, southern Ohio marketing manager for Case IH.

Hennessey and Miller were among approximately 500 commercial exhibitors at the three-day Farm Science Review, which ends Thursday. The agricultural exposition included about $40 million worth of farm equipment.

The number of hours a farmer uses a tractor varies, but Case’s C.L. Lephart said an average for a cash grain farmer would be about 250 hours a year. Normally, a farmer may trade that in after five years, but now they are allowing their equipment to depreciate and trading it in with as many as 7,000 hours on it.

Miller said this year’s drought was a particular letdown because analysts finally were anticipating a good year after years of a depressed farm economy.

″They’d finally got their debt load paid off, which would’ve permitted them to come back and buy, but now...″ said Miller, his voice trailing off.

Lephart, Case marketing manager for northwest Ohio, said the drought led to a new marketing plan. ″Discounts, financing, leases. We’re seeing a lot more of all of these,″ Lephart said.

John Deere Co. parts marketing manager Bob Hothem said the company hopes to cash in on a U.S. Department of Agriculture projection that there will be as many as 25 million new acres to till next year.

While equipment sales have been slow, a different type of machinery has moved out of the storerooms and onto the farms.

Tillage equipment, such as field cultivators, have sold better than usual ″because no-tillage didn’t work out,″ Hennessey said, referring to a farming method aimed at soil conservation

″Conventional and mechanical tillage is coming back into play,″ Lepart said.

Lepart and Miller think 1989 will be a better year for sales, but say they won’t be able to put profits into perspective until all crops are harvested.

″There’s certainly a lot of room for optimism,″ Miller said.

The Farm Science Review, on the 992-acre Molly Caren Agriculture Center, about 25 miles west of Columbus, included field demonstrations and exhibits by farm equipment manufacturers and dealers. The annual agribusiness exposition is sponsored by Ohio State University.

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