Farm equipment hard to come by as soaring grain prices push demand

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Agriculture

Edmond Aime looks at the price tag for a new combine and winces slightly, but the Saskatchewan farmer knows that despite the high cost he'll have to act fast if he wants to buy the behemoth.

Times are so good because of high grain prices that many farmers are looking to upgrade equipment - making a new combine or tractor hard to come by.

Regina - Edmond Aime looks at the price tag for a new combine and winces slightly, but the Saskatchewan farmer knows that despite the high cost he'll have to act fast if he wants to buy the behemoth.

Times are so good because of high grain prices that many farmers are looking to upgrade equipment - making a new combine or tractor hard to come by.

"The way things are going in agriculture here right now is they're telling me if I want a new combine for next year I've got to look at it today," said Aime, who farms in the southeastern community of Redvers, Sask.

"Used to be you'd drive around and there was new stuff sitting on the lot."

As he spoke, massive pieces of farm equipment loomed in the background at the Western Canada Farm Progress Show, the largest dry land farm technology and equipment show in the country.

Farmers and dealers at the show both know that equipment, along with farm chemicals and fertilizer, are in short supply.

"If you want something, it's basically you don't even ask the price. It's just a whether-they-have-it-or-not type thing because if you can't find it, you can't find it," said Aime after climbing out of a combine that's selling for $322,000.

"It's kind of scary."

Dealers say they can still get equipment into Western Canada, but acknowledge it will take longer than normal.

In past years, dealers would have had stock or inventory sitting on their lots available for sale, said Lee Norheim, a customer support manager with John Deere. Farmers could have bought a combine in the middle of June and had it in time for the fall harvest.

But that's not the case any more.

"Right now we're looking at a situation where all of the combines for the '08 harvest are sold. The soonest you could get a combine would be for the harvest of 2009," he added.

Kim Hartman, who has been farming in Elrose, Sask. for 25 years, knows all about the delay. Hartman ordered a new tractor back in November and was supposed to take delivery in February.

"We haven't seen it yet, still waiting for it," he said. "Every piece of equipment is like that. You put your name down and you'll get it within a year or a year and a-half. It's just pent-up demand worldwide."

Norheim said John Deere is adding capacity and employees at some of its factories to try to meet the demand. It's a situation that might leave Ontario's manufacturing sector green with envy as automakers have closed plants and cut thousands of jobs.

In June, General Motors said it will shut down its Oshawa truck plant, axing 2,600 jobs. Last Thursday, 2,000 auto parts workers lost their jobs in a restructuring of parts maker Progressive Moulded Products Ltd.

Back in Saskatchewan, Norheim said he doesn't expect the sudden growth in the farm equipment industry will last forever.

"But we're pretty positive it will be at least two to five years," he said.

Norheim believes there are a number of factors at play, including emerging global markets and soaring prices for grains. Grain and oilseed prices have more than doubled since 2002.

"With commodity prices being very high, a lot of farmers are very optimistic and obviously that's part of the boom," said Norheim.

"I've never seen such a high level of demand for farm equipment in my time in the industry. I'm in the industry about 10 years now myself and talking to a lot of people that have been around longer, they really haven't seen anything of this nature since the early '70s."

The thought is echoed by long-time farmers.

Aime, who is the fourth generation of his family to work the farm in Redvers, said it's been decades since times were this good and demand for equipment was so high.

"My father went through it in the early '70s ... the last time there was any money in grain farming," said Aime.

Organizations: General Motors, Progressive Moulded Products

Geographic location: Saskatchewan, Western Canada, Elrose Ontario Oshawa Redvers

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