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Agrimarketing : May 2009
66 View From the Top:70 View From the Top 5/13/09 12:46 PM Page 66 : Assoc of EquipmentManufacturers AGEQUIPMENTINDUSTRYUPDATE Name: CharlieO’Brien Title: Vice President of Agriculture Services, Association of EquipmentManufacturers (AEM) since 2007,Milwaukee,WI Career: Before joining AEM, he had been with JohnDeereCredit his entire career. Education: B.S.University ofWisconsinMadison;MBADrakeUniversity AM:Howis the farmmachinery business? CO:Anyoutlookis complicatedby today’s economicdifficulties,but the past twoyearshavebeengoodformanufacturersof 2-wheeldrive Tractors 100-HP-and-over, 4-wheeldriveTractors andCombines.These product categorieshave all seendouble digitgrowth,helpedbyincreased energydemands, increasedcommodity prices andincreasednet farmincome. AEMis not in the forecasting business, but survey results fromour interim2009Outlook, completed in mid-February 2009, shows that expectations forU.S. sales of 4-wheeldrive Tractors and 100-HP-andover 2-wheel drive Tractors run from flat growth to a 10%drop in 2009, depending on product types. Combines havemaintained their growth rate over the first twomonths of 2009, but predictions are for decreases through the year compared to the past two years. Smaller tractorswith less than 40 HPare down 18%in the first two months of 2009 and could continue that trend. Opinions are split oncredit avail- ability, butdealers are facing inventory financing challenges andthe credit crunchdoesn’thelpproductmovement throughdistributionchannels. Aswe cansee, comparedto other market sectors inthis current economic crisis, agriculture is theplace to be.The recorddebt-to-asset ratio is extremely positive. Price increases onall fronts createvolatility, yet the last two years showoverall industry strength. The USDA’smost recentnet farmincome projectionof $71.2Bis still above the previous 10-year average. These factors suggest that the agricultural sector is still fundamentally in good condition. 66 AgriMarketing s May 2009 tor units by horsepower range and combines that are shipped to their dealers in theU.S. andCanada. Each manufacturer’s individual data, of course, is kept in the strictest of confidence.AEMthen aggregates the data and issues theAg Flash report. It is a key data point for theman- ufacturers aswell as others in the ag industry because it indicates the level of purchasing activity in themarketplace. The information is available to the public and be accessed at the AEMWeb site:www.aem.org. AM:What areAEM’s newinitiatives? AM:What services doesAEMprovide? CO: TheAEMBoard ofDirectors mandated improving and expanding AEM’sAg Services, andwe’removing aheadwithmatters thatwill interestAgriMarketing readers. AEMAg Services has a long his- tory of providing industry input to standards and advocating safety advancements in theAg industry. For example,AEMhasworkedwith its allies to spread the implementation ofRollOver Protection Structures and safety lighting andmarking on tractors, and its offers a downloadable pictorial database for safety symbols. AEMis currently gathering data towards assessing the true cost ofTier 4 complianceunder regulations imposedby theCaliforniaAir ResourcesBoard.TheAEM Washington,D.C., office advocates for industry onissues includingTier 4, the FarmBill, ag equipmentdepreciation, andrenewable/sustainable energy investment aswell as international concerns suchas free trade andthe currentRussiansafeguardonthe importationof combines. AEMis also heavily engaged in workingwith other industry groups to develop ISOBUS standards for agricultural vehicles and implements across the globe. AM:What is theAGFlashReport? CO: Eachmonth,AEMequipment members report the number of trac- CO:AEMis expanding its ag initiatives to better serve the industry.We believe in doing our part to provide ourmembers and our allies the biggest benefit for dollars spent, which brings us to our newAEM trade show,AGCONNECT Expo. The inauguralAGCONNECT Expo is slated for January 13-15, 2010 (previewed on January 12 by special admission) at theOrangeCounty ConventionCenter inOrlando, FL. Seewww.agconnectexpo.org. The showwillprovide a global PlatformforNorthAmericanagribusiness,withmeetings andevent co-locations at the showprovidingmaximumvalue for allparticipants. DLG(GermanAgricultural Society), organizer ofAgritechnica, theworld’s largest agriculture machinery show, recently entered into a long termalliancewithAG CONNECT Expo. Acomprehensive registration processwill capture the demographics of our attendees, enabling us to bettermeet the needs of our attendees in future years, and providingmanufacturers and producerswith an easy swipe-cardmethod ofmaintaining contact. The showis set at an indoor, professional venue— with internet cafes and fully outfitted press room— providing a true gathering place for the industry. The education program and the interconnection atAGCONNECT Expowillmake the comparisons to other global agriculture trade shows unavoidable. AM
May 2009 Supplement