December 20, 2010

 

US corn, soy prices bolster farm equipment sales

 

 

Higher corn and soy prices prompt US farmers to spend for a better set of equipment and farm machinery upgrades.

 

The University of Missouri Extension recently reported that, with corn and soy prices more than 60% higher than in June, many farmers in Missouri and around the country is now investing in much-needed upgrades and machinery.

 

In Southeast Missouri, dealers say sales are up slightly.

 

"We've seen some increase. I really don't think it's solely because of the higher market prices, but it's probably going to help a little bit. People buy and trade because they need to, and everything happened to fall into place this year," said Gary Kight, sales representative at Sikeston Implement.

 

The pieces of equipment drawing the most interest at Sikeston Implement are cotton pickers, combines and tractors, Kight said.

 

Steve Baehr, store manager at Medlin Equipment, noted that while sales are good this year, the store saw a larger increase in its 2009 sales. "But last year, we sold a lot in the last 10 days of the year," he said.

 

Mike Pobst, president of Alliance Bank in Sikeston, said he has fielded more inquires from farmers regarding purchases this year. "But it's still a little early," he said.

 

Right now, most of the farmers are figuring their revenues and expenditures and meeting with accountants to see where they stand financially. Equipment purchases can be filed as an expense, so there can be advantages to making those big buys come tax time, Pobst said.

 

After all, it has been a good year for most farmers, despite the dry summer and other challenges, Pobst added.

 

Gary DeWitt, vice president of DeWitt Auction Co., said the auctions, which are the first Monday of every month, haven't seen any big change.

 

However, DeWitt did note prices are slightly higher this year. He also pointed out that while market prices are better now than they were in June, several area farmers did not benefit this harvest season because farmers often contract prices before getting crops out of the field.

 

"So it will probably be next year before they get to reap those higher prices," DeWitt said.

 

At Medlin Equipment, the 225-horsepower tractors are the biggest seller this year, but field equipment is also garnering a lot of interest.

 

As far as whether the higher prices spur those sales, Baehr said he's not sure. "Farmers don't really comment on that," he said.

 

Now, the equipment dealerships and credit agencies are preparing for what could be a year-end rush.

 

"December is always busy. There will be a lot of folks coming in and wanting to buy something between Christmas and New Year," Kight said.