Machinery Chatter
Jim Patrico Progressive Farmer Senior Editor

Tuesday 08/26/14

Launch Season After the Gold Rush

For the past few years, summer farm show season has been a gold rush for product launches. Whole new lines of combines, tractors and sprayers with every conceivable option (and some at one time inconceivable) suddenly were available to farmers. For good reason: row-crop farmers had money to spend. Manufacturers and their engineers were happy to accommodate them with new products. For instance, Jim Walker, vice president of North American agricultural business for Case IH, said of 2013, "Last year was monumental." He called it the largest new product launch in company history.

In a year when manufacturers cut back on new product line introductions, John Deere teased spectators at its annual dealer meeting with this four-track prototype due for launch "sometime in the future," according to John Lagemann, senior vice president. (DTN/The Progressive Farmer photo by Jim Patrico)

The 2014 launch season is a bit more subdued. This week at the company's new product launch in Nevada, Iowa, Walker said: "This year is not going to be, quantity-wise, that large." Instead, he characterized it as, "the most impactful introduction year we have had at Case IH."

All four majors have now had their new product introductions, and they all seem a step or two back from the blow-and-go days we saw when row-crop prices were through the roof. As Walker said, the ag industry "is going through a correction mode." Farmer incomes are reduced. Used equipment inventories are increasing while prices are decreasing, which makes used more attractive. To put a cap on it, Walker said, "Think of the [young] age of the fleet that is sitting out there right now." Last year alone, U.S. farmers bought 13,700 combines. Fewer farmers are in the market for either new or used.

All these factors mean big iron manufacturers expect reduced new sales and aren't offering as many new products as they have recently.

Tier 4 emissions standards also influenced both the recently spectacular launches and the more reserved new product season this year. For the past few years, the majors have spent mints of money on R&D to meet Tier 4 diesel emissions standards. As they achieved each level, they introduced whole new lines of products that met EPA standards and -- not incidentally -- carried higher price tags. To give customers more for those extra dollars (besides a cleaner engine), companies created an array of new features to lure business to their dealers -- everything from comfort items like heated and cooled seats to bold new technologies like telematics systems. Fortunately for manufacturers, commodity prices soared at the same time and, despite higher equipment prices, record sales and profits ensued.

Most of the initial Final Tier 4 lines of equipment have now reached the market. In their wake, they left R&D departments with new product projects that have been shelved for years and will take a while to get market-ready.

This is not to say this summer has been void of new product launches. Far from it. From both majors and shortliners, there have been plenty of new products launched that could mean more profitability and efficiency for farmers.

The largest new product segment might be for the hay and forage markets. With low commodity prices and high meat prices, livestock producers suddenly have money in their business accounts. So it's not surprising that the majors have ramped up innovations in equipment that cuts, conditions and bales crops meant to feed cows. New Holland, for instance, launched 25 new products a few weeks ago, many were for hay and forage production. Last week at its annual dealer meeting in Milwaukee, John Deere launched a new forage harvester with a 620-hp engine, a new self-propelled windrower and a new line of large square balers. It also announced major improvements to its existing 6 Family of tractors, which are aimed in part at hay and livestock producers.

In what he called a "comprehensive launch" that had "every market covered," John Lagemann, John Deere senior vice president, referenced the predominance of new hay and forage products. "I think the timing of what we launched is really pretty good. I don't know if we were lucky or if we were smart. Let's just say we were both."

Whether hay and forage producers or crop farmers, the majors want to be sure customers have plenty of reason to buy new equipment. Here are a few highlights of the new products and new features the majors have launched this season.

-- In the beginning of August at its Pennsylvania headquarters, New Holland added a Class 10 model to its CR combine series. It also expanded to its Guardian line of front-boom sprayers, and topped its T8 line with a SmartTrax tractor, which has wheels in the front and tracks in the back. Many of New Holland's new products are centered around hay and forage equipment: round balers, large square balers and other hay tools.

-- Case IH's Magnum Rowtrac is a sibling to New Holland's new tractor. It has new low psi tires on the front and on the rear has a track carriage assembly borrowed from the Steiger Rowtrac. The red manufacturer also announced a partnership with Precision Planting to make that company's products available through Case IH dealers.

-- Last week in Milwaukee, John Deere introduced some key advancements in it R9/RT9 high horsepower tractors, including some unique anti-hop technology it calls the HydraCushion Suspension System. (It also teased launch attendees with a sneak preview of a prototype of a 9RT four-track system for release sometime in the future.) Deere also announced a tough crop package to minimize slugs on S-Series combines and Section Command, a system to shut off parts of its 1910 Air Carts. Deere drew some "oohs" for its partnership with Hillco Technologies to create a Single Pass Round Bale System. An S-Series combine is married to a materials accumulator and round baler. Together they harvest corn and other crops and bale MOG all in one pass without stopping.

-- In July at its Jackson, Minn., factory, AGCO announced it has expanded the Challenger line with a new large frame MT500E series of row-crop tractors. It also introduced new RoGators including the RG700 a nimble, 700-gallon machine engineered for smaller field sizes.

(JP/AG)

Posted at 10:32AM CDT 08/26/14 by Jim Patrico
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