Backorders on farm machinery hurting agriculture industry
MANKATO, Minn. (KEYC) - The COVID-19 pandemic has caused a lot of things to jump in price or get stuck on backorder, and farm machinery is at the top of the list.
That’s making custom farm rates a more attractive option for farmers, especially in southern Minnesota.
“Folks farming the land may not own all of the machinery because of the high cost of machinery. They hire all or part of the farming practices done by someone else who owns the machinery and can provide the labor,” said Kent Thiesse, farm management analyst at MinnStar Bank. “Compared to a year ago, rates are probably up to five to seven percent for most practices.”
Thiesse says the trend is especially true for new, younger farmers who grew up in a farming family and need a little help getting on their feet.
“In some cases with the newer scale planners, they can’t afford all of the equipment that goes with the GPS equipment,” Thiesse said.
Especially with some farmers having an extra profitable couple of years, deciding to upgrade their farm machinery can have a cause and effect on agribusiness markets.
“A lot of the delays are from raw steel and raw iron and labor shortages. We get it, obviously, in semi-loads and we have to put it together,” said Brent Mueller, sales manager at Arnold’s of Mankato.
Mueller says it’s been a struggle for everyone involved.
“Our trucking costs are exorbitant right now. We haven’t raised our trucking costs. Most of the trucks that deliver stuff like this have increased their costs, but we are not going to the farmer and saying ‘I need more money for those trucking costs.’ So, it is a trickle down all the way through the supply chain and the labor force.”
Mueller adds that the backorders aren’t going to stop anytime soon.
“As far as an ongoing issue, I do not see a short-term solution to this. The manufacturers have told us that this is an 18-month minimum or 24 up to 36 months until some of this stuff gets straightened up.”
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