Cautious optimism generated by recession prevalent at World Ag Expo

The mood was cautious optimism at the 2009 World Ag Expo (WAE) as farmers perused the latest in equipment and services under the cloud of a worldwide economic slowdown.

Many farmers left the checkbook at home as they window-shopped among the 1,600 exhibits sprawled across 2.6 million square feet at the world’s largest agricultural exposition held Feb. 10-12, at the International Agri-Center in Tulare, Calif.

The show typically attracts 100,000 people. The threat of rain for three days never materialized and the crowds were large.

At the California Tomato Machinery display, Humberto Guzman grinned as he carefully canvassed the Commander Tomato Harvester. Guzman is a supervisor at Coelho Quest Custom Farm, Inc., in Five Points, Calif. The operation grows processing tomatoes, almonds, and grapes.

“I’m just looking,” Guzman said. “Our company is interested in a new tomato harvester. With the reduced water situation and the poor economy, it’s not going to happen this year.”

The Coelho operation once included about 1,800 acres of tomatoes. California’s worsening drought has shrunk production to about 800 acres, Guzman says. Water once designated for tomatoes now waters almonds and grapes.

At the Jackrabbit Co. display, sales representative Dave Struve showcased the latest in nut harvest equipment, pruning towers, and chippers with passersby.

Business in general is good for Jackrabbit, Struve says, based on the number of pre-season equipment orders placed since last fall’s harvest.

“Our success is determined by commodity prices,” Struve said. “Almonds and walnuts (prices) have taken huge hits over the last few months, but are rebounding now. We’re fairly optimistic for the coming year. Between the U.S. and Australian nut markets, Jackrabbit is in pretty good shape.”

Struve anticipated WAE visitors to be more in the inquiry mode than ready to purchase. “We expect people will see what’s new and get prices for budgetary decisions,” he said.

Nicholas Ferrari, manager, Ferrari Brothers Properties LLC, shopped for walnut and cherry equipment, in addition to new technology. The company based in Linden, Calif., also includes a plant nursery.

“I’m looking for new ideas to improve the plant and harvesting operations,” Ferrari said. “With the regulations changing about burning brush, I’m interested in ways to manage brush including shredding.”

At harvest time last fall, Ferrari says walnut prices were good. Then the recession tightened available credit to overseas buyers causing walnut prices to retreat.

“Walnut prices last year were in the $1.45 to $1.50 per pound range for premium Chandler walnuts,” Ferrari said. “There’s talk of prices this year in the 70 cent per pound range. It’s not a pretty picture right now.”

“Right now we’re not buying anything,” Ferrari said. “We will run the equipment we have and keep it maintained. Over the years we’ve replaced a lot of old equipment, so the current equipment is fairly new.”

At the 2009 Top 10 New Products display in the New Products Pavilion sponsored by Penton Media/Farm Press publications, sales manager Taishi Miura talked up the NV-851 produce wrapping machine made by San-Ai Corporation USA based in Clovis, Calif.

The $27,500 machine wraps plastic around iceberg and Boston lettuce, broccoli, and cauliflower in packinghouses, warehouses, and supermarkets.

The second-generation machine wraps produce in about four seconds or up to 850 pieces per hour without bruising. Customers claim the machine can double produce shelf life compared to produce bagged in the field or left wrapped.

Miura said, “This machine is good for workers. Instead of wrapping produce in the field when it’s damp or cold, the produce machine allows workers to wrap produce indoors. It’s much easier on the backs of workers.”

San-Ai has sold 10 wrapping machines.

Grapekist Hedrick in Madera, Calif., has exhibited at the farm show for about 25 years. The company sells grape harvesting equipment. Frank Silva works for Grapekist and owns his own company, F&F Mechanical.

“Business is good,” Silva says. “Agriculture hasn’t been hit as hard by the economy as other industries. What I’m hearing about is a problem in getting loans from banks. I have clients who are OK financially but have to go through hoops just to buy a piece of equipment.”

World Ag Expo draws visitors from the U.S. and 67 other countries. After visiting numerous dairy exhibits, Canadian dairyman Bob Matzack of Chilliwack, British Columbia, enjoyed a brief respite in the Heritage Complex.

“I like learning about new technologies in the dairy industry,” Matzack said. “Robotic milking machines tweak my interest.”

Canada is just beginning to feel the international economic pinch, says Matzack who owns Weststar Holsteins. Canadian milk prices to dairymen have remained steady while milk prices to California and U.S. dairymen have tumbled in the past 60 days as consumers roll back their spending habits.

“The Canadian dairy industry hasn’t been affected too much except for higher feed prices,” Matzack said.

AGCO did not expect an economic slowdown as dramatic as it is now experiencing when it embarked on a $100 million development program for a line of high horsepower tractors, according to Robert Crain, company vice president and general manager, North America.

Crain was on hand at World Ag Expo as part of a tour of farm shows introducing four new row crop tractors with PTO horsepower ranging from .205 to 275.

He admitted the current world economic crisis is challenging. He expects tractors sales to fall 15 percent to 20 percent worldwide as a result of the world economic crisis. However, he projects a stable tractor sales environment in the U.S. at the same time.

The fundamentals of a growing world population have not changed. The need for food, fiber, and biofuels for a world of almost seven billion people has not diminished in this current world fiscal crisis. He called current commodity prices “not rational” for the obvious agricultural supply and demand fundamentals and expects a turnaround soon.

Veteran tireman Manny Cicero of Alliance, USA, said the economic recession has caused a definite slowdown in sales of passenger car and truck tires as people are driving fewer miles and trucks are hauling less.

However, demand for agricultural tires has not fallen. He says Alliance’s factories are running full speed supplying the large equipment, specialized radial tires.

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