Ag equipment makers face challenges, opportunities at home and abroad

July 31, 2013

 

tractor

PHOTO BY WAYNE DENNING/CVBJ
Lance Newhall and Chris Chapman make adjustments to a machine at Garton Tractor in Stockton

Growing demand for Central Valley agricultural products is good, not just for farmers, but for farm equipment manufacturers as well.

“Ag rolls on and thank God for that,” said Jack Wilkey, CEO of Wilkey Industries, headquartered in Turlock. “Almonds and walnuts are the crops now, with almonds the heaviest, and that’s good for us.”

Wilkey Industries manufactures agriculture processing machinery. They build conveyance equipment, bins and chutes, product separation via aspiration, dryers, almond and walnut hullers, along with installation and repair work. The company is truly a family operation. In addition to Jack, Don Wilkey is the chief operating officer and Pat Wilkey is responsible for office administration.

The company meets the needs of processors from Bakersfield to Chico with “equipment of our own design and improved current equipment” to process a variety of crops, said Jack Wilkey.

In fact, manufacturers of agricultural machinery are optimistic about near-term business expectations in the Central Valley and “in most parts of the world,” according to the “Agritech Business Barometer from the Agrievolution Alliance,” a global coalition of ag equipment manufacturing associations.

The survey, issued twice a year, gleans information from the United States, Japan, Europe, South Korea, India, Brazil and Turkey and the most recent edition noted that “half the companies surveyed in the United States expect to see sales growth in the next six months but there will be fluctuations in the marketplace, according to Charlie O’Brien, Association of Equipment Manufacturers senior vice president and ag sector leader. “While business remains positive, we’ve seen fluctuations in commodity supply and demand, especially corn.”

But the manufacturing industry isn’t out of the woods yet, O’Brien said. The yet to be finalized federal Farm Bill that “adds some uncertainty for the strength of future business.” However, the Central Valley’s positive attitude about the industry remains reasonably strong as indicated by Steven Kost, executive vice president of the Far West Equipment Dealers Association located in Dixon. The association represents agricultural, industrial, materials handling, and other dealers in California and six other western states.

“California’s ag arena for the most part fared well,” Kost said. “The commodity diversity of the state and the Central Valley in particular commanded high prices and there has been tremendous growth in most farming product categories” with the only wrinkle coming from the dairy industry.

Prices for almonds, walnuts, cherries and other commodities may be excellent but growers and equipment manufacturers still feel the powerful effect of ever-increasing input costs and, in meeting the challenges presented by the global economy.

“California’s rules and regulations continue to create problems for growth in the ag sector and this affects manufacturing, finances, marketing and future planning for all concerned,” Kost said.

Garton Tractor’s Stockton location has experienced “great business” with equipment sales “better than ever” due to the growing sales of nut crops and winegrapes in the Central Valley, said manager Grant Garton.

“Our top three equipment sales are for winegrape tractors and grape harvesters, big tractors and swathers for hay, corn and rice, and row crop tractors,” Garton said. “And sales to the dairy industry have picked up over last year.”

Manufacturers and distributors of ag equipment can participate in federal government contracts that allow Garton, for example, to sell to federal government entities in and outside of California. “The program, which was instituted two or three years ago, is still evolving,” Garton said.

Export trade agreements are likewise evolving and the Association of Equipment Manufacturers and the Agrievolution Alliance are united in supporting the United States and the European Union negotiations on their new free trade agreement, the Transatlantic Trade and Investment Partnership, which would set equipment standards, develop a common certification process, and coordinate new regulations and legislation, all of which would reduce red tape and create a more competitive marketplace for growers, manufacturers and dealers to meet the needs of the marketplace.

The association is also urging that off-road equipment be included in an international treaty that “facilitates export financing which would help small and mid-size U.S. ag equipment manufacturers grow their export business,” said Dennis Slater, president of the Association of Equipment Manufacturers.

In the midst of all the issues associated with manufacturing for the Central Valley’s booming agriculture sector, Garton said any company that wants to remain successful must “do whatever’s needed for customers because customer service must be maintained every day” adding that product diversification is another positive element of the ag equipment realm “because we’re getting more into discs and the sales of other implements now.”

California and the Central Valley are generating a prolific ag manufacturing industry because of the vast variety of crops needing equipment, said Kost. “And short-line manufacturers here can fill out items large manufacturers don’t produce.”

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