THE INSIDER - MSEDAmseda.com/wp-content/uploads/2018/03/2018JanuaryTheInsider.pdf · The Insider...

“Committed to Building the Best Business Environment for Equipment Dealers”

The Insider - January 2018

THE INSIDER Serving farm, outdoor power, farmstead mechanization & industrial dealers

of Midwest-SouthEastern Equipment Dealers Association

Association’s Leaders Have Assumed Their Roles

Dwight Williams and John Maus to Lead Midwest-SouthEastern Association for 2018

Midwest-SouthEastern Association confirmed a new set of leaders during the Joint An-nual Meeting in Amelia Island, FL, January 14-16, to guide the organization for 2018. These volunteers help the Association continue to develop and provide resources and programs im-portant to the success of dealer members.

Dwight Williams was installed as Midwest-SouthEastern Association’s Chairman of the Board for 2018 Dwight is Vice Chairman of Williams Tractor and Equipment, a multiple store New Holland, Case-IH, Bobcat and Bush Hog deal-er with Arkansas locations in Fayetteville, Berryville, McGehee, and Rogers and Rayville, Louisiana. He and his wife Julia make their home in Fayetteville, Arkansas and are members of the Central United Methodist Church of Fayetteville. They have two children, Elizabeth and Allison. Dwight attended the University of Arkansas and is a member of the Fayetteville Chamber of Commerce and on the Board of Directors of the Mt. Comfort Cemetery Association. In 2016, Dwight completed his one year term on the Board of Directors and in 2017 served as Vice Chairman of Midwest-

SouthEastern Association. Elected to the office of Vice Chairman, John Maus, Morrilton, AR. John is a third generation dealer and is co-owner of Maus Implement Co., a multiple store John Deere dealer with locations in Morrilton, Russellville and Damascus, Arkansas. He and his wife Lynlee make their home in Morrilton and are parents of four children. A graduate of University of Central Arkansas, the Maus family are members of Sacred Heart Catholic Church where John is a past Parish Council President. In 2017, John completed his two year term on the Midwest-SouthEastern Board of Directors.

Dwight Williams Elected Chairman

John Maus Elected Vice Chairman

“Committed to Building the Best Business Environment for Equipment Dealers” 2


MEET YOUR 2018 OFFICERS & DIRECTORS

Seated (left to right): John Maus, Vice Chairman - Dwight Williams, Chairman - Robert Dinsmore, Immediate Past Chairman Standing (left to right)” Bubba Cooper, Director - Waldo Riesterer, Director - Jared Nobbe, Director - not pictured Jim McCartney

Membership

Elects

McCartney

& Nobbe

To

Board

Jim McCartney Durand, IL Jim McCartney is the Corporate Parts Manager at A.C. McCartney Farm Equipment, a multiple store AGCO dealer with locations in Durand, Wataga, Carthage, and Mt. Sterling, Illinois. His working career began in 1992, when he returned to Durand to work for the family business. Today, he is part of the 3rd generation family business. Jim & his wife Laura are the parents of two children and make their home in Durand, Illinois.

Jared Nobbe Waterloo, IL Jared Nobbe is the fourth generation member of Wm. Nobbe and Co., Inc., a 12 store John Deere dealership in southern Illinois and southeast Missouri. He currently serves as Vice President of Sales - Small Ag, Turf and Municipal. Before his current position, he served in other capacities for the dealership in sales, parts and service. Jared is a graduate of the University of Illinois with a Bachelor’s degree in Technical Systems Management. He is also a graduate of the Illinois Agricultural Leadership Program. Jared has served in leadership roles in his local Farm Bureau Foundation, Lions Club and his church. He currently serves as president of Clifftop, NFP, an organization dedicated to conservation of the bluff land in his home county of Monroe, Illinois. Jared and his wife Rebecca make their home in Waterloo, Illinois and they have two children.



Sponsors Make Annual Meeting the Best It Can Be

From the “Tailgating & Big

Screens” Reception, held on

Sunday, January 14th, it was

clear our Joint Annual Meeting

would continue its tradition of

excellence thanks to the

generosity of our 2018 sponsors:

Thank you Sponsors

Immediate Past Chairman Tom Ballweg presents plaque to outgoing

2017 Chairman Robert Dinsmore

Chairman Robert Dinsmore calls to order MSEDA Business Session

Immediate Past Chairman Tom Ballweg presents Nominating Committee Report

Traeder Enterprises

Federated Insurance SMA TISCO

AGCO Case-IH

John Deere Kubota

Mahindra

DLL Finance Kcoe-Iscoe

Ag-Direct Basic Software

Farm Credit EXPRESS TractorHouse



Officers

Dwight Williams, Chairman Williams Tractor & Equipment Fayetteville, AR

John Maus, Vice Chairman Maus Implement Co. Morrilton, AR

Robert Dinsmore Immediate Past Chairman Ceresville New Holland Frederick, MD

Gary Manke, CAE President-CEO Madison, WI

Directors Bubba Cooper Delta Group Greenville, MS Jim McCartney A.C. McCartney Farm Equipment Durand, IL Jared Nobbe Wm. Nobbe & Co., Inc. Waterloo, IL Waldo Riesterer Riesterer & Schnell, Inc. Chilton, WI

Madison Office 5330 Wall Street, Ste.100 Madison, WI 53718-7929 Phone: 608-236-6332 800-236-6332 Fax: 608-240-2069 www.mseda.com

Memphis Office P.O. Box 17777 Memphis, TN 38187-0777 Phone: 901-756-1336 800-727-1530 Fax: 901-756-1337 www.mseda.com

MSEDA Preferred Partner Team SI Advances to NAMA Awards for Work

Done with John Deere Dealers

Association News...

Team SI was recognized by the Mid-South Chapter of the National Agri-Marketing Association (NAMA) at its 2018 Best of NAMA Awards ceremony Monday, Jan. 22. The firm received two awards from the chapter and will be advancing to Nationals in Kansas City this April. This is the first time team SI has submitted anything for recognition to the association. “We are able to help our agriculture and equipment dealers by utilizing data at the right time with the right frequency. We are so privileged that our clients give us the opportunity to position their brands and dealerships for success,” said CEO Tim Whitley. The Best of NAMA awards program honors the best work in agricultural communications. Team SI received these awards on behalf of their clients in the agriculture industry, including Everglades Equipment and RDO Equipment Co., both John Deere dealers. The awards included: Social Media Campaign: Regional Merit - Everglades

Equipment “Who We Are” Campaign Website: Regional 1st place - RDO Equipment Co.

The Mid-South Chapter Best of NAMA Awards included 15 companies and nine agencies competing in Region V, which includes entries from North Carolina, South Carolina, Virginia, Kentucky, Florida, Georgia, Alabama, Mississippi, Tennessee and Louisiana.

About Team SI Established in 2010, Team SI is a data-driven marketing firm where designers, strategists and data specialists create unique customer experiences for clients using digital and social media platforms. Team SI developed its own proprietary system called Doppio ® that pairs the most sophisticated, aggregated and automated data-analytics platforms available with the insights and instincts of its certified professional staff to optimize campaign effectiveness. They’re best known for coining the term “TraDigital” - the art form of blending traditional and digital marketing ® .



Compact Tractor Sales Soared in 2017 - Again

Dealers specializing in selling compact tractors (under 40 hp) had another banner year in 2017 as U.S. and Canadian sales of the small equipment reached all time highs. According to the latest figures from the Assn. of Equipment Manufacturers, 2017 unit sales of compact tractors were 158,237, up 9% from 2016, when U.S. and Canadian dealers sold 145,061 units, which was the previous high water mark for small tractors. Up until that time, the all time high came in 2004 when dealers retailed just under 140,000 units. Sales of under 40 hp tractors had sunk to as low as 90,000 units in 2009 and didn’t surpass the 100,000 mark again until 2012. Since then, annual sales have risen steadily and many industry experts believe they could surpass the 160,000 unit mark in the next year or two. Compared to 2009’s low water mark, 2017 sales were up by 77%. Over the past 50 years, compact tractor sales have grown by 500% from about 31,000 units sold in 1969

Farmers Feel Good Today, Worry About Future

Producer’s optimism about current economic condi-tions has remained strong, while optimism about the future has faded to a 14-month low. The Purdue/CME Group Ag Economy Barometer declined for the second consecutive month in December, drifting to a ready of 126. The Ag Economy Barometer is based on monthly survey responses provided by 400 agricultural producers from across the U.S. December’s barometer value was the lowest reading since March and the second-lowest reading in 2017. The decline in the Ag Economy Barometer over the last two months was driven entirely by producers adopting a more pessimistic perspective regarding the future. The Ag Economy Barometer has two

(continued on page 8)

Industry News...

to the 157,000 in 2017. In 1969, compact tractor sales made up about 18% of total tractor sales in North America to more than 60% of the total.

AEI



These principles will be used as a road map - they are our way of letting Congress know what we’ve heard from the hard-working men and women of American agriculture. While we under-stand it’s the legislature’s job to write the farm bill, USDA will be right there providing whatever coun-sel Congress may request or require. USDA wants to promote more “innovative crop insurance products and changes” for farmers and help them manage risk. The document does not mention reducing crop insurance.

Source: USDA

A new U.S. farm bill reflecting budget goals of the Trump administration should provide crop insurance products that allow farmers to withstand economic slumps while it cuts spending in nutrition assistance programs, the U.S. Agriculture Department said. The four-page document outlining principles guiding the bill includes: Maintain an innovative crop insurance program

that allows farmers to manage risk Retire “more environmentally sensitive acres”

through voluntary land stewardship programs Reduce regulatory burdens while ensuring new

farm and food technologies are safe Lead the world in agriculture research Provide reliable and affordable high-speed inter-

net services to rural America.

Driverless Tractor System Among First on Market

An Iowa-based company is marketing one of agri-culture’s first driverless systems for tractors. The ag technology firm has successfully tested the system that allows existing farm equipment to become autonomous. The company will sell a limited number of the systems in 2018. The technology was demonstrated at a field day on a farm in northeast Iowa. The farmer who hosted the demonstration used the technology during harvest. As the farmer navigated his combine through cornfields, he pushed a button to summons a tractor pulling a grain cart. The driver-less tractor rumbled across the field and pulled alongside the combine to catch the grain from the auger. With another push of a button, the also driverless grain cart traveled back across the field to unload. A 2017 tech industry report predicts unmanned autonomous tractors will become an industry norm. The report estimates 300,000 tractors fitted with autosteer tractor guidance tech were sold in 2016, with that number expected to reach 660,000 by 2027.

Source: Delta Farm Press

sub-indices, the Index of Future Expectations and the Index of Current Conditions, which provide insight into the drivers behind changes in barometer readings. December’s results revealed that producer opti-mism about the future declined sharply for the second month in a row. As recently as October, the Future Expectations index was at 137. The index fell to 127 in November and in December, dropped again to 120 - the lowest reading for the Index of Future Expecta-tions since October 2016. In contrast to the increased pessimism about the future, producers have become more optimistic about current economic conditions in U.S. agriculture. The Index of Current Conditions, the barometer’s measure of producers’ short-run expectations, increased in December to 139 - the highest reading since July, and the second-highest reading since data collection began in October 2015. In short, a paradox has developed. Producers’ optimism about current economic conditions has remained strong, and arguably even strengthened, while optimism about the future has faded to a 14-month low. Two specific survey questions capture the recent erosion in producers’ forward looking sentiment. The share of producers expecting “better” financial condi-tions for their farms fell to 20% in December, while the share expecting “worse” financial conditions climbed to 30%. Both of these sentiment measures are at the most extreme levels recorded in over a year. Compared to a year earlier, the percentage of producers expecting their farms to be worse off one year ahead rose to 30% from 23%, and the percent-age of producers expecting their farms to be better off one year ahead declined from 32% to 20%.

Source: Purdue/CME Group

USDA Releases Farm Bill Priorities

Your Computers and Data: Simple Steps to Protecting

Critical Assets

Tornadoes and hurricanes, floods and fires. Disasters happen. And every dealership should be prepared, have a plan and systems that allow it to continue operating in the wake of a disaster. Your DMS, the data stored there and the functionality it provides are among a dealership's most critical assets, the information and systems that allow you to conduct business. In most deal-erships, the system is the responsibility of an office or parts manager. That person does not



you, but if it does, won't you be glad that you took some simple, inexpensive steps to protect your business?

Source: Rex Collins, HBK CPAs & Consultants

have to be a computer expert to take certain steps and precautions that will protect your vital information and systems. The most basic precaution is to back up your data by connecting your DMS network to a UPS -not the package-delivery service, but an uninterruptible power supply. The UPS battery backup assures ongoing, that is, "uninterrupted” power if you lose electricity in a storm or other incident that knocks out power to your building. The UPS you purchase should be able to provide enough power to support your entire network through most outages and automatically save files and shut down a computer gracefully during extended blackouts. Beyond maintaining power are issues related to phones and internet access. A dealer in Florida with several locations was fortunate to regain power shortly after Hurricane Irma recently, but had no internet or phone connections for quite some time at some of the locations. A dealer using voice over internet protocol (VOIP) or another wireless system might consider having its local landline phone company run a hardwire line or two into the dealership to serve as a back-up. The dealerships should also be using surge protectors. Unlike the UPS system, which provides power during an outage, the surge protectors will protect your systems against spikes in electrical current that can literally destroy computers, printers, modems and other equipment like televisions. Surge protectors vary in price and capability so ensure you purchase a model that can be relied on to protect your entire network. Alternatively, consider dedicated circuits for critical. equipment, even if you’re connecting through a UPS. The dedicated circuit will ensure a computer isn't sharing power with another, energy-hogging device. Any data protection plan should include backing up your DMS on a portable device and storing the device off site. Back up at least daily and take the device with you at the end of the day. A dealer storing its backup in a safe onsite learned after a fire that the safe acted like an oven, frying the backup medium. Test your backup device periodi-cally. Some dealers have been surprised when they went to restore information from their backup system and discovered it had not been capturing data as they had assumed. A lot can happen to damage your systems and data - a fire, bad weather, a computer virus. And with worsening weather patterns and heightened cybercriminal activities, it is more likely than ever that your business will have to deal with some kind of damaging event. We hope it never happens to

Fowler Returns to Lead Krone

FMCSA’s Electronic Logging Devices (ELD) Update

Rusty Fowler, who led Krone North America from 1986 to 2014, has returned to the company to replace Tommy Jones as president and CEO. "'Speaking on behalf of the entire Krone organi-zation, we want to thank Tommy for his Contributions to the continued development of our company in North America,” Fowler, said. "However, these are times when all parties involved realize that the leadership at the top must be adjusted to ensure consensus and alignment on business direction and goals."

Dec. 18, 2017, was the implementation date for the Congressionally-mandated Electronic Logging Device (ELD) final rule. Now, all vehicles and drivers that were previously required to fill paper log books are required to have either a grandfa-thered AOBRD (Automated On-Board Recording Device) or an ELD. No hours of service rules were changed because of the ELD rule. FMCSA has issued the following limited exemptions/waivers from the ELD requirements. Several other waivers and exemptions are currently under consideration. A limited exemption to United Parcel Service

from some of the technical requirements for which their portable ELD has an alternate means of compliance, allowing their business operations to remain efficient.

A waiver was issued allowing drivers of rental trucks to operate without an ELD for up to 30 days for the next 3 months. After that, an

exemption has been issued to driver to operate without an ELD for 8 days or less. A limited 90-Day waiver from the ELD require-

ment for those transporting Agricultural Com-modities, as defined in the Federal Motor

Carrier Safety Regulations, which includes livestock. To ease the transition to ELDs, FMCSA's partners at the Commercial Vehicle Safety Alliance have previously announced a delay in placing non- ELD compliant vehicles out-of-service until April 1, 2018, which will allow continued time for carriers and law enforcement to adjust to the new technology.

(continued on page 10)



DECEMBER U.S. UNIT RETAIL SALES

__________________________________________________________________________________________________________________________________________________________

Beginning Equipment December December Percent YTD YTD Percent Inventory 2017 2016 Change 2017 2016 Change Dec. 2017 ____________________________________________________________________________________________________________________

Farm Wheel Tractors – 2WD _______________________________________________________________________________________________________________________________________________________________________________________________________________________________________

Under 40 HP 9,819 9,383 4.6 144,038 133,209 8.1 77,480 _______________________________________________________________________________________________________________________________________________________________________________________________________________________________________

40-100 HP 5,606 5,621 -2.0 57,055 57,087 -0.1 31,382

_______________________________________________________________________________________________________________________________________________________________________________________________________________________________________

100 HP Plus 1,624 1,754 -7.3 17,026 18,524 -8.1 8,053

Total - 2WD 17,049 16,858 1.1 218,119 208,820 4.5 116,915

Total - 4WD 283 239 18.4 2,427 2,313 4.9 701 _________________________________

Total Tractors 17,332 17,097 1.4 220,546 211,133 4.5 117,616

SP Combines 475 490 -3.1 4,112 3,971 3.6 626

4WD Tractor Sales Up 27% in December

FMCSA has also announced that violations cited during the time period of Dec. 18, 2017 through April 1, 2018, will not count against a carrier’s Safety Measurement System scores.

Sales of large 4WD tractors finished 2017 on a high note, but other big ag equipment— row-crop tractors and combines — ended the sales year in "flat" fashion, according to the latest figures released by the Assn. of Equipment Manufacturers. Summarizing year-over-year farm machinery sales in December, Mircea (Mig) Dobre, analyst with RW Baird noted, "Large ag equipment retail sales were essentially flat in December with a 4% decline in U.S. sales offset by high-teens growth in Canada. U.S. inventories declined year-over-year in absolute and days-sales terms, especially large ag with more than 10% inventory decreases in all categories. Gradual growth off recent North American large ag bottom, driven by replacement demand remains intact, tax reform impact could further drive demand" 4WD tractor sales increased 27.1% year-

over-year in December following the 8.8% decrease in November. Last 3 months (L3M) sales increased 14.8% year-over-year after 14.5% growth in the November L3M.

December typically an above-average month for 4WD tractor sales, accounting for 10.6% of annual sales the last 5 years. Row-crop tractor sales declined 4.4% year-

over-year after growing 5.4% in November; L3M sales increased 17.4% (November L3M +13.6%). December is typically an above

average month for row-crop tractor sales, accounting for 10.5% of annual sales the last 5 years. Combine sales increased 1.6% following

14% growth in November. L3M sales in-creased 20.7% on a year-over-year basis after a 22.4% L3M increase last month. De-cember is typically an above-average month for combine sales, accounting for 10.4% of annual sales the last 5 years.

Mid-range tractor sales declined 0.4% after growing 12.5% last month. Compact tractor sales increased 5.6% year-over-year after a 9.9% increase last month. Under 40 horse-power tractor sales reach an all-time high, surpassing 157,000 units.

Source: Ag Equipment Intelligence

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