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Farm Equipment Sales Being Cut

August 23, 1999

DES MOINES, Iowa (AP) _ Low commodity prices are stretching beyond the fields and into the factories.

Industry projections show some farm equipment sales being cut by one-third this year. Tractor and combine manufacturers are scaling back production.

Needing their money for other things, farmers are making do with older equipment.

``In many cases, the purchase of a piece of machinery is″ postponed, said Emmett Barker, president of the Equipment Manufacturers Institute in Chicago. ``But you cannot plant corn without corn seed.″

Barker’s group projects U.S. sales of four-wheel-drive tractors declining 32.4 percent this year. Combine sales are expected to plummet 36.7 percent, it says.

The lack of orders coming in has forced equipment manufacturers to put on the brakes.

Reporting a 76 percent drop in third-quarter earnings, Deere & Co. said last week it would periodically shut down its major U.S. farm equipment plants through October.

Earlier, the Moline, Ill.-based company _ which is Iowa’s largest manufacturing employer _ had announced a 25 percent shutdown.

Milwaukee-based Case Corp., poised to merge with New Holland NV of the Netherlands, has taken similar steps.

``We’ve geared our factories down and had periodic shutdowns to reflect that demand has decreased,″ said Rick Bruck of Newton, a business manager for Case in central Iowa.

``Most of our business is eight to nine months out, and it gets pretty foggy at times,″ he said. ``When farmers have good cash flow, it’s easier for our dealers.″

Many smaller manufacturers, as well as the companies that supply parts for the industry, have scaled back.

Last week in Des Moines, Firestone reported lower sales of farm implement tires and announced production cutbacks.

Roger Lewis, an Omaha, Neb.-based district sales manager for Kinze Manufacturing Inc. of Williamsburg, oversees an area encompassing Nebraska and Kansas, northwestern Missouri and western Iowa.

Farmers concerned about low crop prices have gone into a holding pattern, he said.

``These guys could hold off three or four years and not be trading tractors,″ he said. ``There’s so many unknown factors ... A lot of these farmers are very concerned about what’s going to happen.″

At the Iowa State Fair, which ended Sunday in Des Moines, fairgoers walked through a tent behind the Varied Industries Building where shiny tractors and other implements beckoned to farmers who could not afford them.

``Things you buy cost too much and things you sell don’t bring enough,″ said Lowell Sherwood, whose son and son-in-law farm near Brooklyn and Victor, Iowa.

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