The other side of the tractor dealership situation

showcrop

Well-known Member

• Mar 1, 2013

• #1

I posted back in Jan about Deere pulling the plug on their fourth oldest dealer, RN Johnson in Walpole NH. There is a follow up in today's paper that they are shutting down completely. They couldn't get a different line because they have too much debt to be able to get the money to put up the new building that a manufacturer requires. Alan Johnson said that Deere is a symptom of the larger problem which is the terrible recession that the equipment business has been in for five years. I have the impression that mid west dealers are doing OK, but here in the North East the dairy farmers have it tough when what they get paid is set by conditions in the west and mid west. So it is hard on the dealers too. Alan Johnson mortgaged his home, spent his retirement, and cashed in his life insurance trying to stay afloat. He hopes that his auction of stock and JD museum will enable him to pay off his vendors. And now our economy is on the down hill slide again.

 

T

thesmoothedeere

Member

• Mar 1, 2013

• #1

Guess the bad economy hasnt hit Honda yet. Got us working almost every saturday through the summer.

 

C

Carlyle hoffman

Member

• Mar 1, 2013

• #1

The manufacturing process takes longer to reduce those BEER CANS to useable sheet metal than it does to make JOHN DEERES from QUALITY raw materials, meaning to reduce the BACK WASH down to re useable fluid that is in the CANS.

 

F

Formerly PaMike

Member

• Mar 1, 2013

• #1

Deere pulled the plug on one of the last independant dealerships here in PA. I really question the management of RN Johnson. If they were in business for soo long why are they riddled with debt? Also, the dairy industry might not be good up there, but the yuppie industry is. Sell compact tractors instead of farm tractors...

 

B

bob15

Member

• Mar 1, 2013

• #1

Why is he in so much debt? Did he buy a new building or new trucks or what????? If he is in the same building, where did his money go and to whom is it owed to, Deere?

So with that being said, what should Deere do? If other dealerships are surviving, what is the difference between them and RN Johnson?

 

A

Anonymous-0

Well-known Member

• Mar 1, 2013

• #1

Corporate revenue for fourth quarter 2012 for JD were up 22% from previous quarter. Midwest farmers probably made more money in last 3 yrs than ever with 7 dollar corn and 14 dollar soys. With the drought last yr being possible exception. Subsidies of 10 billion year have been generous also. Some of this revenue has found its way into equipment dealers hands.Our Midwest economy sure must be different than the Northeast.If that dealer was dependent on livestock producers then that might explain why he did not fare so well last few yrs.

 

F

Formerly PaMike

Member

• Mar 1, 2013

• #1

Heres what I dont understand. The midwest had a terrible drought and terrible yields, yet corn prices are lower than they were when they had GREAT yields.... Can anyone explain?

 

F

Formerly PaMike

Member

• Mar 1, 2013

• #1

I do feel bad for some dealers, but I am with you on this one. Why wouldn't Deere pull out if the owner of a dealership wont invest money back into the dealership.

 

Vito

Well-known Member

• Mar 1, 2013

• #1

Hate to see them go out but there had to be some mismanagement
somewhere and was recognized to late.It sounds like he tried to
save it cashing in everything but you have to wonder about that
thought.

Vito

 

A

Anonymous-0

Well-known Member

• Mar 1, 2013

• #1

my guess is in part due to speculators, cbot, or anyone/thing else that likes to gamble on commodities(food). as worthless as the wall street gang. it's uncontrolled capitalism that benefits the few.

 

D

Dalet

Member

• Mar 1, 2013

• #1

(quoted from post at 14:49:46 03/01/13) Corporate revenue for fourth quarter 2012 for JD were up 22% from previous quarter. Midwest farmers probably made more money in last 3 yrs than ever with 7 dollar corn and 14 dollar soys. With the drought last yr being possible exception. Subsidies of 10 billion year have been generous also. Some of this revenue has found its way into equipment dealers hands.Our Midwest economy sure must be different than the Northeast.If that dealer was dependent on livestock producers then that might explain why he did not fare so well last few yrs.

Click to expand...

Not sure of your point? How about an executive summary? I am particularly curious of your subsidy number. References please. :wink:

 

R

RandyB(MI)

Well-known Member

• Mar 1, 2013

• #1

You hit it , Bob! Don't know your age but many on here will remember back in '75/'76 when navy beans went to $57 100wt normally at $15-$20 and this was at harvest time. Back to normal within 2 mos. Commodity brokers. Lot of new tractors bought in our area that year.

 

M

moresmoke

Well-known Member

Location

E ND

• Mar 1, 2013

• #1

Some of this is Deere's regional dealer plans. Even
here in the mid west, they are forcing out the old
single store dealers. The last one in this state
was forced to merge with another dealer earlier this
year. There are some stores that appear to still be
independent, but are actually owned by the same
parent company. You just need to look at the
construction side of the business to see where they
are headed.

 

A

Anonymous-0

Well-known Member

• Mar 1, 2013

• #1

There would likely be a correlation between states receiving high farm subsidies having robust equipment sales and states receiving low subsidies having low equipment purchases. The I states are #2 & 3 in farm subsidies received while N H is # 48 in amount of farm subsidies it receives. A good fraction of those crop subsidies ends up as new farm equipment in I states.I don't see the Midwest ag economy as depressed when land prices are breaking sales records monthly and JD sales nationwide are up 22%. I see JD and other equipment companies continually consolidating into super stores to have larger service areas for whatever reason--probably to push out low or no profit dealers so corporate can make more money.

 

J

JerryS

Well-known Member

• Mar 1, 2013

• #1

Don't know the whole answer, but there's this: despite the severe drought in some areas, nationwide the corn crop was at a near-record high in 2012.

 

A

Anonymous-0

Well-known Member

• Mar 1, 2013

• #1

Commodity subsidies only not counting crop insurance or conservation payments totalled 172 billion for the last 16 yrs---averaging nationwide 10.7 billion per year. They are not distributed equally between the states.

 

A

Anonymous-0

Well-known Member

• Mar 1, 2013

• #1

a corporation consolidating and making more money and splitting it with less people? say it ain't so!

 

F

FarmerZeb

Member

• Mar 1, 2013

• #1

I am saddened to see these old dealers go. I have lived in many parts of this country. I grew up in Maine and lived in Vermont for a time. The ag economy of NH/VT/ME does not compare to the ag economy of Midwest or southern states. Even the "big" potato farms in Aroostook County Maine are medium sized at best compared to Midwest farms. The kind of farming that happens in NH and the rest of New England make it difficult to support a JD dealership just in ag equipment revenue. I suspect the dealership was heavily dependent on residential, commercial and construction customers. These lines have been affected by the recession. We in the mid west are living in the high cotton right no on grain prices. I can assure you that New England agriculture is not having the same experience as grain producers in the Midwest.

-paul

 

OP

OP

showcrop

Well-known Member

• Mar 2, 2013

• #1

(quoted from post at 21:36:48 03/01/13) a corporation consolidating and making more money and splitting it with less people? say it ain't so!

Click to expand...

Yes, That is terrible that they get away with that!! They didn't grow that business. If they get money they should keep a little and redistribute most of it!!!