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MIDW ES T- SOUTHE AS TERNEQUIPMENT DEALERSA S S O C I A T I O NServing farm, outdoor power, farmstead mechanization and industrial dealersTHE INSIDERJAN2020FAST FACTFARMERS’ WILLINGNESS TO INVEST ENDSON HIGH NOTE IN 2019Brazil is expected todisplace the U.S. as theworld’stopsoybeanproducerduringthe2019/2020 season. Brazil’ssoybean crop is projectedto be the largest everat 123.5 million metrictons. The U.S. harvestis expected to drop bynearly 20 percent from theprevious year to less than100 million metric tons.Source: USDAThe Ag Economy Barometer drifted about current economic conditions;sideways in December to a reading the Index of Current Conditionsof 150 compared to 153 in November. declined by 12 points to 141 fromNovember to December.The Farm Capital Investment Index,which reflects farmers’ willingness In contrast, producers’ expectationsto invest in equipment and other for the future remained strong; thecapital, ticked up to 72, which Index of Future Expectations roseconcluded 2019 at the highest slightly from 153 in November toinvestment index value for the year. 155.Although the overall readingchanged little, the survey revealeda shift in producers’ perspectiveregarding both their farms’ and theproduction ag sector’s economichealth. Producers expressed lessconfidence than a month earlierA slim majority (52 percent)of farmers on the Decemberbarometer survey indicated thattheir farm’s financial performancein 2019 matched their initial budgetprojections.MSEDA: Committedto building the bestbusiness environmentfor equipment dealers.

To better assess the level of financial stress amongU.S. farms, researchers asked producers in Novemberand December whether they expected their farm’soperating loan in 2020 to be larger than, about thesame, or smaller than in 2019. About one in fivefarmers expect to have a larger operating loan in2020. About three in 10 of those operations indicatedthe reason for the larger operating loan is that theyexpect to carry over unpaid operating debt from2019. Responses to these two questions suggest thatabout 6 percent of farms surveyed in late 2019 wereexperiencing significant financial stress.included several diesel-electric hybrids, the moststylish being Steyr’s Konzept tractor, confirming theleaner and greener theme will continue to play animportant role for the next 10 years.The Purdue University/CME Group Ag EconomyBarometer is a nationwide measure of the healthof the national agricultural economy. Results arebased on responses from a survey of 400 agriculturalproducersGLIMPSE OF THE FUTURE:WHICH DIRECTION ARETHE MAJOR TRACTORMANUFACTURERS HEADING?By Steven Vale of Farmers GuardianASimilarly, what makes John Deere’s latest 8 Seriestractors’ eAutoPowr gearbox (first continuouslyvariable transmission with an electro-mechanicalpower split) interesting, other than the claimedincreased efficiency, is it provides surplus electricitywhich can be used on implements. Famoustransmission manufacturer ZF also showed a similarelectric CVT, which we understand will be in a tractorby the next Agritechnica in 2021, so our tip is to expectto see more electric implements quite quickly.In addition, numerous autonomous vehicles, the mostpowerful of which was on the John Deere stand. Thetechnology already exists for one operator to superviseseveral unmanned vehicles, but legislation and farmeracceptance are perceived by many to be the twomain obstacles. Love it or hate it, there is no stoppingtechnology, so expect increased levels of automationon all farm machines.s one decade ends and another one is aboutto start, the farm machinery industry is at thebeginning of a technical revolution.Aside from technology, thestands of the big four – John Deere,The last 10 years has once again seen tractor makers CNH Industrial, AGCO and Kubota – at Agritechnicaforced to spend many millions on strict engine also gave us some strong clues as to which way theseemissions regulations, the latest being Stage 5. manufacturers are heading when it comes to productHowever, this has not deterred several makers from line development and brand strategy.developing alternative power and driveline solutions.The strategy at CNH Industrial, which sees theIn particular, the recent Agritechnica machinery separation of the on- and off-highway divisions, wasshow in Germany saw a flurry of developments. This recently outlined in a five-year business plan by seniorPage 2

ProtectingYour Business:You Hold the KeysConfidently place the rightpeople behind the wheelof your company vehicleswith the help of our driverscreening tools.Scan to view a short video on howspeed, attention, fatigue, and emotionimpact your company drivers.Commercial Insurance Property & Casualty Life & Disability Income Workers Compensation Business Succession and Estate Planning BondingFederated Mutual Insurance Company and its subsidiaries* federatedinsurance.com Ward’s 50 Top Performer A.M. Best A (Superior) Rating20.02 Ed. 11/19 *Not licensed in all states. 2019 Federated Mutual Insurance CompanyThe Insider - January 2020

management at the New York Stock Exchange.Part of the plan to grow the company’s farmmachinery sales revenues by 5 per cent each year isto reposition and strengthen the three brands of CaseIH, New Holland and Steyr, and increase the levelsof differentiation. What this means from a productperspective is unclear, but CNH Industrial stressesCase IH will focus on large-scale ‘professional farms’;New Holland on orchards, mixed livestock and arablefarms; and Steyr will be repositioned as a premiumEuropean ‘short-liner’.The wind of change saw CNH Industrial group all itsfarm machinery brands (Case IH, Kongskilde, NewHolland and Steyr) on one large stand at Agritechnica,the central focal point being clearly on the parentcompany. When an opportunity arises, CNH Industrialis keen to make further acquisitions, such as the recentones of Australian company cultivation equipmentspecialist K-Line Ag and ATI Track Systems, whichproduces rubber track systems for high-HP tractorsand combines.Another recent acquisition was farm managementinformation system company AgDNA. Added tothe AgXtend precision farming software solutionsportfolio which launched at the end of 2018, we aretold to expect a significant expansion of the numberof products during the next few yearswheeled tractor specialist to a mainstream brand,with a wide portfolio which includes nature greenversions of the Challenger tracked tractors and selfpropelled and trailed sprayers.Fendt also has combines, self-propelled forageharvesters, grassland equipment, a planter (made inBrazil and available in the US and Canada in 2020)and, from Agritechnica, a telehandler.Fendt reckons to have sold 18,000-plus tractors lastyear [2019] and it aims to sell 20,000 tractors in 2020.It will be interesting to know what the business planis for the next few years.Looking forward, it will be interesting to see whetherAGCO plans to complete the Fendt portfolio witharable equipment? This is not unthinkable, followingCNH Industrial’s acquisition of Kongskilde Agriculturein 2017.Valtra is the first tractor maker to offer head’s up displayand we are informed a similar system is included inthe MF concept tractor.Joystick steering, commonplace on constructionmachinery, looks set to make inroads on farmmachines, judging by the systems on the Ideal 10combine and MF concepttractor.The most notable Agco acquisitionsin the past decade were GSI in 2011,and the same year the companyacquired the remaining 50 percent stake in Laverda (and Fella)Argo group.New tractors, including theeagerly-awaitedrubbertracked 8RX, and thesurprise reveal of the 9X combine were the maintalking points on the company’s Agritechnica stand.from the ItalianEqually interesting was the fascinating glimpse of thefuture and workingMajor news in 2017 was the purchase of Lely’s prototypesofgrassland equipment business, followed the same ninedifferentyear by Precision Planting. Agco remains the only one e l e c t r i f i c a t i o n ,of the big four which is a pure-play farm machinery automationandbusiness, but the positioning of the Fendt brand has artificial intelligencechanged.projects.It is not long ago that Massey Ferguson was the The most striking, the autonomous electric vehicle,company’s undisputed ‘full liner’. Not anymore, combined a rubber-tracked 500kW (680hp) electricbecause Fendt has quickly evolved from a German drive unit with an integrated disc harrow. How thePage 4

Only Fastline Media Group connects directlyto the farm of the TOP 10% of those who arebuying this quarter.Ask About The TOP 10%Through forecasting, predictive models and 40-yearsof Fastline consumer behavior, we are working toconnect you with buyers like never before.Real Focus. Real Intelligence. Real Engagement.UPDATEFor 27 years, from 1990 to 2016, OSHA citation penalty amounts remained the same. In 2016, citation amountsincreased 78%, a significant increase to make up for the inflation over that 27 years. Starting in 2017, OSHAbegan to increase the penalty amounts each year in line to keep up with inflation and 2020’s increase was justannounced.According to the announcement from OSHA, the official maximum penalty amounts for citations in 2020 will beas follows: Serious, Other-Than-Serious, and Posting Requirements: 13,494 (up from 13,260 in 2019) Failure to Abate: 13,494 (up from 13,260) per day after due date Willful or repeat: 134,937 (up from 132,598)The increases amount to a 1.78% year over year, which is lower than last year’s 2.5% increase. States who havetheir own safety and health plans are required to at least match these increases.OSHA also released a memo explaining how penalty amounts are assessed. There are many levels to decision,but in general, the higher the severity and probability of injury, the higher the penalty that will be given.The Insider - January 2020

electrical power is generated is still up for debate, but Stage 5 engine in the M7003 Series, there were noit shows how tractors could evolve into ‘power units’ spectacular prototypes at this year’s Agritechnica.which could be integrated with a number of differentimplements to effectively create one machine.But you can be sure that Kubota is actively developinga wide range of new technologies behind the scenesAnother stunning concept, the 9.2-metre diameter as it continues to work quietly to achieve its longVoloDrone, was developed with German firm term business plan to take a larger share of the globalVolocopter. Equipped with two, 60-litre liquid tanks, a tractor and farm machinery markets.pump and a 10m spray boom, the 18-rotor VoloDroneis ready for its first test flight.The Japanese manufacturer has never made a secretof its intentions to grow tractor power above theBusiness-wide, John Deere has completed numerous 170hp French-produced flagship. It remains to be seenstrategic acquisitions during recent years, including whether the M8000 Series (175-210hp) produced forsprayer manufacturers Hagie, Mazzotti and PLA.John Deere’s 2017 purchase of California-basedartificial intelligence firm Blue River Technologygave the company see and spray technology, andan example of this was also in the future technologyzone.However, the most visually stunning example ofanother direction field spraying could take in thefuture was a 2.7-tonne autonomous self-propelledvehicle fitted with a 560-litre spray tank, 9m sprayboom and a barrage of sensors and cameras.Kubota by Russian-owned Canadian tractor makerBuhler Industries, will make it across the NorthPowered by a 37hp petrol engine, it is envisaged that Atlantic by the next Agritechnica.two or three of the autonomous units could work in afield. The vehicle was shipped back to North America Ultimately, Kubota has ambitions to grow the poweronce the show ended for further tests. Will we ever levels still further to 250hp, most likely using its ownsee it, or any of the other prototypes again? We will European manufacturing facilities, but could Buhlerhave to wait and see.provide Kubota with articulated tractors in the futurefor certain markets?You can be quite certain the big three farm machineryplayers are closely following the proceedings.Tractors were not the only exhibits on Kubota’sAgritechnica stand, which also included Kverneland,acquired in 2012, and Great Plains, bought in 2016, as AEM, EDA SURVEY SHOWS MFRS. &a show of strength.DEALERS AGREE CURRENT INVENTORYKubota broughtan autonomousprototype tractorand showed abolt-onelectricptogeneratorat the last showin 2017. From a new product perspective, but for aPage 6'ABOUT RIGHT’Comparing the dealer results of the AEM/EDA studyto Ag Equipment Intelligence’s monthly DealerSentiments & Business Conditions Update surveyshows the results of the two studies track fairlyclosely, at least when it comes of dealer inventoriesbeing “just about right.” The AEM/EDA results indicatethat of the dealers surveyed showed almost 58% of

dealers say their new equipment inventories are“about right.” The AEM press release didn’t offer anyadditional details of the dealers’ response beyond the“just about right” response.In the most recent Ag Equipment Intelligence surveyof dealers (December 2019), 66% of dealers reportthat new equipment inventory levels improvedin November with a net 19% of dealers reportinginventories too high (27% too high, 66% in line, 8%too low) vs. 24% of dealers reporting inventories toohigh (32% too high, 60% about right, 8% too low) inthe previous month.A building series of circumstances, from weatherto trade policy, are putting downward pressure onthe agriculture sector of the economy, however, agequipment dealers and manufacturers believe dealerinventory levels are “about right,” and are primarilyexpecting flat results in the coming year.According to the latest survey conducted by theAssociation of Equipment Manufacturers (AEM)and the Equipment Dealers Association (EDA),manufacturers and dealers are more in agreement onnew-equipment inventory levels than they have everbeen in the past. Half of manufacturers say dealerinventories of new equipment are “about right,” whilealmost 58% of dealers say the same. That reduces theamount of separation from last year’s already-recordlevel of agreement by nearly half.Meanwhile, roughly 43% of both groups are planningfor a flat performance next year. From there, 36%of dealers are planning on normal growth or better,while about 9% of manufacturers say the same.The reasoning for those disparities in thought maycome from market exposure.“The data shows manufacturers are noticeablymore concerned about trade issues and economicperformance globally, where economic data is showingheadwinds especially in Europe and China,” said AEMsenior VP of ag services Curt Blades. “Fortunately, thetrade issue is one that can be controlled, and we’reoptimistic U.S. and world leaders will resolve thesedisputes in the near future.”“Ag equipment dealers are echoing the concerns oftheir clientele, the farmers,” said EDA VP of industryrelations Joe Dykes. “Their biggest concern is thechallenging weather conditions that have madeplanting and harvesting difficult and even impossiblein some regions. Tariffs on end-user markets is theirnext largest concern, and you can see that especiallyin the dairy sector.”Both manufacturers and dealers are looking to reducecosts to adjust to conditions, with dealers focusingon smaller equipment orders, and manufacturersfocused on containing headcount.RURAL MAINSTREET INDEX SHOWSGROWTHThe Creighton University Rural Mainstreet Index(RMI) for December remained above growth neutralfor the fourth consecutive month. It was the tenth timethe monthly index suggested economic expansion inrural communities in 2020.The overall index dipped from 54.2 in November to50.2 in December but remained above 50, whichindicates growth.Bank CEOs who responded to the survey expectabout 12.5 percent of grain farmers to experiencefinancial losses for 2020, which is an improvementover projections for 2019, when bankers expectedmore than 15 percent of grain farmers to experiencenegative cash flows for 2019.The November farm equipment-sales index sank to27.9 from November’s 37.5.Survey findings also revealed that bankers expectfarm loan defaults to increase in 2020. Almost twothirds of survey respondents indicated their bankhad increased collateral requirements, and just over34 percent said their bank had rejected a higherpercentage of farm loan applications.IOWA, ILLINOIS SURPASS BILLIONDOLLAR MARK IN TRADE AIDThe USDA is expected to make a decision soon aboutwhether to issue a third round of Market FacilitationProgram payments. If authorized, checks would startgoing out in Janiary. USDA’s Farm Service Agency haspaid out nearly 11 billion in 2019, with Iowa, Illinois,The Insider - January 2020

simple,fast andawesome.You’ll love the application and quotingtools at AgDirect .We asked ag equipment dealers across the nation howwe could better serve their online business needs.And we listened. Today, we believe the dealer tools atagdirect.com are the most intuitive, flexible andconvenient in the business.Along with its multiple browser compatibility and mobilefriendly design, our application and quoting tools areeasy to use, responsive and offer quick navigation.See for yourself. Check out the simple, fast – andawesome – online tools at agdirect.com.Jill BeckArkansas(479) 508-7110Kenny SmithIllinois(815) 640-1389Carla MickeyIllinois(217) 720-9595Brian SchrockMissouri(660) 200-5687Kyle ThomasTennessee(931) 619-3577AgDirect is an equipment financing program offered by participating Farm Credit System Institutions.Page 8Calvin SipesWisconsin(608) 425-0039

and Minnesota receiving the most. A breakdown ofstate totals:Arkansas: 330 millionIllinois: nearly 1.1 billionIndiana: 542 millionIowa: 1.18 billionKentucky: 172 millionMichigan: 194 millionMinnesota: 801 millionMissouri: 472 millionNebraska: 716 millionOhio: 389 millionS. Dakota: 400 millionTennessee: 176 millionWisconsin: 254 millionSource: Brownfield AgMANUFACTURERNEWSTORO ACQUIRES VENTUREPRODUCTSVenture is owned and run by the Steiner family, whichhad developed and made agricultural equipment andtractors before starting the Ventrac brand in 1996. Thecompany has 325 employees and about 100 millionin annual revenue.“We are excited to become a part of the Toro Companyand its family of leading brands,” said Dallas Steiner,chief executive of Venture Products Inc. “The ToroCompany is committed to a culture that aligns withour employee values, has a rich history of success inthe marketplace and a proven track record of growingtheir brands.”The Ventrac products complement many Toro products.The articulated design of some Ventrac tractors andimplements offer additional maneuverability andthe ability to handle steep hillsides fits one of thefew applications that existing Toro turf and groundsequipment don’t manage as well.Toro, which outsources some of the attachments thatfit its products, also picks up a manufacturer thatproduces its own attachments.Bloomington-based Toro is spending 167.5 million tobroaden its portfolio of turf equipment and snow- andice-management products.This is the largest acquisition by Toro since thecompany announced it was buying another privateToro is acquiring Venture Products Inc., which makes a family-run company, the Charles Machine Works Inc.,variety of tractors and attachments under the Ventrac for 700 million in February 2019.brand. Privately held Venture is based in Orrville, Ohio,which also is home to jam maker J.M. Smucker Co.Ventrac products are used in the turf- and groundsmanagement industry and known for handling toughterrain like steep hillsides and soft ground. Its versatilesmall-tractor platform also accepts 30 attachmentsthat tackle a variety of jobs including snow and icemanagement, grass and brush mowers and a varietyof specialty soil and site-pr

Serving farm, outdoor power, farmstead mechanization and industrial dealers JAN 2020 FAST FACT MSEDA: Committed to building the best business environment for equipment dealers. . term business plan to take a larger share of the global tractor and farm machinery markets. 2020.

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