Steel prices, microchips factors in agriculture equipment shortages

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BROCKVILLE, ONT. -- Many industries have seen supply and demand issues since the COVID-19 pandemic began but now the agriculture sector is seeing it, as demand for small tractors and equipment soars.

At Weagant Farm Supplies north of Brockville, Ont., president Laird Weagant can't keep some tractors in stock.

"Sixty horsepower and under tractors are just not available," Weagant said. "I would have 30 new tractors likely available for sale at any time and normally somebody would just pick out what they wanted. Today, we are working more on pre-selling product that's going to be arriving in September and even as far out as October."

The used tractor market is also red hot, according to Weagant.

"Normally I would have 12 to 14 used tractors. They're all picked over and pretty much gone. I would have one or two waiting to be hit the display yard, but just sold out," Weagant said.

One of the factors he's seen in the high demand for equipment is from people taking advantage of the hot real estate market and moving to the country.

"They're looking for equipment to look after that land once they arrive and, as a result of that, it's been an unprecedented demand," Weagant said. "We've been in business since 1952 and never have we seen like the kind of changes and the impact on the industry that's happening right now today."

Steel prices are another huge factor in why some agriculture equipment is taking so long to be delivered.

"If you get into a very simple product, like wagons, racks, this type of thing, it's all steel. And as a result of that, it's following the pricing of steel," Weagant said.

"Companies (that) would normally be able to ship within three to four weeks, right now, we're running up to 26 weeks, 28 weeks lead time and they are simply out of stock,

"(There are) definite shortages in product that we should have seen arriving in March. That's creating another demand on us, which is trying to get the product assembled and into the field," he added. "We should be selling hay tools; right now we're getting them in one and two at a time instead of truckloads."

Companies going virtual to show off machines

With the lack of machinery sitting on dealership lots, some retailers are now offering a different way to show would-be customers new equipment.

JLD-Laguë /Green Tech sells John Deere products and has 16 dealerships in Quebec and Ontario. They began to show equipment virtually through their website at the beginning of June.

"We're developing a new way for our customers to facilitate their shopping," said agriculture sales director Bruno Bouchard.

"Customers can make an appointment with one of our virtual sales reps and with the webcam, he will go over all the features," Bouchard said. "He will go all around the tractor or the lawn tractor and see it and show everything, answer questions live.

"We have flexible hours, even after hours, you know, meeting around six, seven, eight o'clock, because we know, when you're working, it's hard to make an appointment," Bouchard added.

Sales of residential equipment, like lawn mowers and small tractors, have been so high, they have none to show at their dealership in-person.

Shortage in microchips affecting high-tech gear

There is also a shortage in microchips for guidance equipment that use GPS, with Bouchard saying some of those orders might not be filled until 2022.

"The demand is so strong that even with factories increasing their capacity, they're not able to fulfill the worldwide demand," Bouchard said.

"Presently, we're selling planters for next year. This is our early order program for planter, seeder, tillage equipment. We need to sell right now to have it for next spring," Bouchard said. "U.S. demand is so strong on planters, even with an increased capacity there, the company production has been almost totally exhausted in less than three days."

Bouchard says if you're looking to buy new equipment, do your research.

"Plan, be ready to know what you're looking for because you're going to shop for what you need, not what is available," he said. "That's the best decision you can make, and if you want something for this year, it's a bit late."

Both Bouchard and Weagant say getting replacement parts at dealerships is still easy, but customers have come to understand they might not be able to purchase bigger equipment on the spot.

"They're realizing whether it's at my yard, at somebody else's yard, it's just not there," said Weagant, "and they're accepting the fact that they're going to have to wait for it."

"Best advice is talk to a salesman," he added. "He'll try to fill you in and try to match up the product that you actually need, and we'll try to see if there's something that can be brought back, borrowed or stolen from another dealer."

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