REAL ESTATE
A Sacramento Valley equipment dealer says most John Deere parts have been in good supply, though parts from overseas, such as rubber tracks, have sometimes been more diffi- cult to come by.
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factureequipment basedoncustomer demandand donot stockpilemany extra parts and components. TulareCountydairy farmerTomBarcellos saidhe has not had a serious problem in acquiring critical parts, although he’s aware of several-week delays in some cases. Early on, he said, there was addedwait time for certaindairysupplies, buthe recalledasup- pliersaying, “Ifeverybodystayscalm, thenwe’reOK.” What helped, Barcellos said, isusing“JohnDeere, Caterpillar, Ford, Peterbilt—main-brandstuff that is fairly common.” Jeremy Bivert, corporate parts manager at Valley Truck & Tractor Co. inWoodland, which sells John Deere products and other lines, said, “Some of the other lines are having more difficulty, but as far as the JohnDeere line is concerned, about 98% of the parts thatwe sell are suppliedwithin24hours. John Deere has a parts warehouse in theMidwest where they keep tens of thousands of most parts.” Items that aremoredifficult toacquire,Bivert said, include parts that come in from overseas, such as disk blades or other ground-engaging equipment, or rubber tracks for tractors—apart that JohnDeere doesn’t itself manufacture. He said John Deere was proactive early in re- sponse to COVID-19, adding that locations in- creased stock levels, “so instead of keeping a three- months’ supply of parts, we would keep a five- or six-months’ supply, just in case some of the supply channel got backlogged.” In preparing for 2021, Bivert said his company will start early. “Usually, we place our orders in November for spring tractors, but nowwe’re saying, ‘Let’s get this done now before September, to give ourselves that extra couplemonths of cushion,’” he said. AGCO, aworldwidemanufactureranddistributor of agricultural equipment, reported in late July that all its factories remained open, with strong orders for spring 2021. “We still face a demanding environment toman- ageourmanufacturing, supply chainandaftermar- ket operations,” AGCO chairman, president and chief executive officer Martin Richenhagen said. “In addition, end-market demand has been nega- tively impactedby thepandemic, but isproving tobe resilient as farmers look to replace their aged fleet.” Basedon theCOVID-19 impact tomanufacturing supply chains, AEM predicted the pandemic will change thewaymanufacturersoperate inthe future. “Our concern is, we really need to prepare for future disruptions to North American sup- ply chains,” Russ said. “It seems logical that the United States, Mexican and Canadian govern- ments should have some type of task force or a mechanism where manufacturers can provide government decisionmakers information in real time, to cut down on disruptions.” (Christine Souza is an assistant editor of Ag Alert. Shemay be contacted at csouza@cfbf.com.)
plant was closed due to the pandemic. “I was told that due to the virus, production was behind and estimated productionwould be weeks away, sometime in the latter part of September, and so to plan for parts being unavailable,” Fawaz said. He said he eventually bought a replacement motor, but not the name-brand motor he usu- ally purchases. Solano County farmer Joe Martinez, who grows almonds, walnuts and prunes, said suppliers have very low inventories andmany “off the shelf” parts must now be ordered, adding, “We’ve never had problems like this before.” Chuck Hice, assistant manager of McFarland- based All State Ag Parts, which sells new, used and rebuilt agricultural andtractorparts, saidhe isaware of the delays. “Without a doubt, we are having a hard time get- ting certainparts out ofMexico, and it’s been taking two to three times as long toget becauseof COVID,” Hice said. The Association of Equipment Manufacturers, a Wisconsin-based trade association that represents equipment manufacturers, said the equipment farmers depend on requires thousands of parts, components andmaterials, including steel, alumi- num, electronics, rubber and insulation. AEMsaid manufacturing facilities inMexico closed inMarch and April, while theMexican government decided how to protect employees during the pandemic. “There’s a fair amount of parts and components that are sourced fromMexico, and thousands of parts go into a piece of agricultural machinery and eachcompanysources fromdifferent locations,”said Alex Russ, AEM director of government relations. “Not only did that disruption slow downmanufac- turing, but it also stopped certain manufacturers frombeing able to operate in theU.S., because they couldn’t source those parts and components from anywhere else.” While manufacturers in the United States and Canadawere able to attain “essential” designations for their operations, Russ said, the Mexican gov- ernment delayed how it was going to deal with the COVID-19 outbreak. “The pandemic really destabilized North American supply chains, as manufacturers were trying to obtain ‘essential’ designations andmake sure that their suppliers were also able to continue manufacturing,” Russ said. Mexico has since issued clear guidance for manufacturers to operate. Ensuring that all North Americanplants areoperational, Russ said, is espe- cially important given the United States–Mexico– Canada Agreement, a trade agreement that took effect in July. Anotherchallengeaffectingthesupplyofpartsand equipment,Russ said, isa limitedsupplydue to“just intime”manufacturing,whichmeansplantsmanu-
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August 19, 2020 Ag Alert 19
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