October Web Exclusive! Reconditioning Farm Equipment

10/1/2012

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Reconditioning Your
Farm Equipment


Get the most mileage for the money

by J.F. Pirro


        When it comes to the business of used farming equipment, Glenn Wenger, president of Wengers of Myerstown (Pa.), speaks about life cycles, a kindred concept in many facets of agriculture.

        "We are a piece of the life cycle of a piece of equipment," he says.

        For example, over a 10 to 50-year period, there's a percentage of life that's always left in every farm machine. Farmers still run Farmall 560s that are 50 years old.

Tracy Smith, left, tractor parts manager with Wally Walmer, machining services manager.        However, the used farming equipment market is tight, and finding good, quality implements, tractors and machines is a constant challenge, one Wengers has long been dedicated to since the family operation began 60 years ago with this very focus. Initially, Wengers only salvaged farming equipment, then it added construction equipment salvage, and 10 years ago the company added an equipment service division. Recently Wengers added used motorcycle sales to its regiment.

        Wenger estimates that agriculture is still 40 percent of the town's industry, so the business is helping to keep agriculture viable at home and throughout a five-state radius: Pennsylvania, New York, New Jersey, Maryland and Virginia. Used equipment sales have remained strong, even in the tight economy. "We see nothing but good," Wenger says.

        In fact, last year, was a banner year for Wengers, mostly due to a spike in some commodity prices. Money is churning, both for new and used equipment, Wenger says, and has been for a three to five-year run now.

        "Average, run-of-the-mill equipment is more readily available," he says. "But to keep our reputation, we all work very hard every day. Others are coming into the business all the time, so we have to be on top of our game to keep the business."

        Wengers is reselling about 1,500 used agricultural units a year, everything from a $300 two-bottom plow to a $30,000 grain drill.

        As for comparisons, a new baler with a thrower would range in price from $20,000 to $25,000 compared to a good, used baler that might run $10,000. "If you're doing 50,000 bales of hay a year, you're probably going to buy new because productivity is important, more important than capital outlay, and downtime costs money. But if you're doing a couple thousand bails for a dozen brood cows you're doing as a hobby, it's harder to justify."

        Wengers mostly serves small to midsize lifestyle farmers. Wenger himself is a good example: He has a herd of 35 beef cows. He sells some, and he shows some.

        Farmers come in different brackets, he says. A lot of farmers, part-time farmers, are small-acreage farmers, and when they look at the costs of new equipment, it's significant. "When they can buy used, and it can do the job for a number of years, and spend half the money, or down to 25 percent of the money for an older unit, they can save significant capital outlay, and that's really what it's about," Wenger says.

        Three brothers and three sisters are in the family business, and Wenger has also brought in three nephews full time. There are 60 Wengers' employees in Myerstown, where used equipment is sold out of three locations: One location focuses on farming equipment, one on construction equipment, and the third location is where machines are serviced. Wengers also has ownership interest in three New Holland stores in two states.

        "Twenty-five years ago, my brothers and I were the [new] kids on the block," Wenger says. "Today, we're the elder statesmen."

        Some of the used purchases come from auctions, some from dealers and private individuals, but the search is always on for good-quality used equipment. The units are brought in and gone over to establish absolute assurance that it's of the quality Wenger's stands by.

        Wenger is clear in calling it used equipment, rather than reconditioned. Wengers doesn't rebuild machines; it buys and resells, and decisions are made unit by unit.

        However, you need the new equipment, and new technology, to feed tractors into the used supply, and Wenger is already predicting a challenge with dealing with the newer technology in what will become older equipment when it "hits our doors." Wenger says, "Now, it's also about computers. It's not all mechanical."

A Day in the Life of an Agricultural Technician




Elsewhere in Pennsylvania

        James Weaver, owner-operator of Weavers Compact Tractor Parts & Repair in Shippensburg, Pa., has made inroads into Wenger's old standby in the last decade. A salvage yard, it specializes in used and aftermarket parts, mostly for John Deere and Ford tractors, as well as some New Holland, all generally compact tractors with less than 50 horsepower.

        Out of three pole buildings-40-by-64, 36-by-64 and 50-by-70-foot-Weaver sells 60 percent of his parts to other shops and dealers, much of it through the mail, but also to bigger nurseries, farms, producers, some dairy and horse farmers, too. "It's a diversified group," Weaver notes.

        Parts demand has been strong, and he has parts others don't. In some cases he's manufactured parts. What can't be used gets scrapped in heaps several times a year, another important source of income.

        Weaver, who grew up on a dairy farm, understands why people buy used equipment.

        "It just makes sense if you can spend $500 rather than $30,000, or even if you have to spend $2,500, but you still have some guys who will always buy new," he says. "Then, some will never buy new and always make due with used tractors and used parts."

        Weaver says the younger sect that helps him-three full-time employees-is definitely mechanically inclined and usually from a farming background. He's never had a problem finding qualified employees in his area.

        It's definitely a growing field, Weaver says, because the price of new equipment has jumped significantly in the past couple years. As metal prices have gone up, and tires and more with it, wages haven't followed those increases. Growers need a break somewhere, especially when companies who don't foster reputations for supporting their products with parts leave a bad taste in customers' mouths.

        "We're helping agriculture. We're helping a lot of people," he says. When a part is no longer available from John Deere or Ford, the only option is used, especially for the Japanese-built tractors, and it's probably a problem that's only going to get worse."




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