Commercial Tire Dealer™ Low commodity prices and sluggish export markets are just two factors infuencing farmers’ tire-buying habits.
What to expect in 2016 Minimizing soil compaction and maximizing durability are the priorities of new farm tires By Joy Kopcha
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npredictable crop prices, just like the unpredictable weather, aren’t going anywhere, and manufacturers and marketers of farm tires know they have to be strong enough to withstand both. It’s the added pressure of everything else – fuctuations in original equipment production and depreciation write-ofs, and a strong dollar to name a few – that is really making life difcult. Still, most are bullish, like James Crouch, North America farm segment marketing manager for Michelin North America Inc. “Te market will recover soon enough. Even though all of the tires in the farmer’s shed are new right now, they will eventually need to be replaced. We believe that when the replacement market does rebound, it will be signifcant.” Modern Tire Dealer turned to Crouch and other farm tire experts from companies that have the most to lose – the ones holding onto the largest shares of the market. We asked these industry experts to paint a picture of what to expect in 2016. Here’s who responded to our questions:
• Scot Sloan, agricultural product manager for Titan Tire Corp. • James Crouch, North America farm segment ALSO IN CTD marketing manager OTR tire outlook: for Michelin North Manufacturers expect demand will be America Inc. fat in 2016 . . . 43 • Bruce Besancon, vice Holland tire dealer thrives in a small town: president of marketKuil Banden BV credits quick, 24/7 ser- ing for Alliance Tire Americas Inc. vice and inventory for success . . . 46
• Jim Enyart, technical service manager at BKT Tires USA Inc. • Neil Rayson, vice president of Mitas Tires North America Inc. • Tom Rodgers, director of sales for Firestone brand farm tires at Bridgestone Americas Tire Operations LLC • Brad Feeney, director of commercial tire programs at TBC Brands
MTD: What are the primary factors infuencing the farm tire replacement market? Sloan, Titan: With current commodity prices, growers are more price-conscious than usual, and they may be more likely to make purchase decisions based on up-front cost as opposed to brand preference or quality. Dealers are also feeling the pressure to stock less inventory. Tis means that in some cases, growers have fewer options to choose from when they go to make a purchase. On the manufacturing side, original equipment manufacturer (OEM) production is down, which may equate to a slight uptick in afermarket sales as growers hold onto their equipment for longer periods of time. Crouch, Michelin: Te primary factor infuencing the farm tire replacement market right now is a low net farm income. Te sharp decrease in net farm income is a result of low commodity prices. We have had several years of some very good crops which has driven crop inventories up and the prices down. Highs and lows in commodity prices are a normal occurrence and are expected. Te diference in this cycle is the compounded efect of the expiration of the Section 179 Bonus Depreciation Amendment. Farmers were allowed to depreciate equipment purchases at a much higher dollar fgure than they were able to in the past. Tey used this
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MTD December 2015
