CropLife 100 On Buying Big Equipment
CropLife 100 dealers have some serious application fleets to maintain — so what's their strategy for keeping equipment current?
December 4, 2009
Many dealers in the CropLife 100 purchased big rigs this year, according to our annual survey. Here's a sampling of the strategic approach to big iron purchase decisions:
Van Horn Inc., Illinois (No. 37 on CropLife 100): “If I don’t buy four or five new rigs every year, the fleet gets old and I’m paying out repairs in maintenance,” says Roger Oliver, president of Van Horn Inc., Cerro Gordo, IL.
This year the purchases of choice were three AgChem units and one Case IH. “In order to be the dealer that we want to be, that's the path we’ve chosen," Oliver say. "I think that’s how we build the business.”
Growers Fertilizer Inc., Florida (No. 77 on CropLife 100): Serving the vegetable, citrus, turf, and ranch industries down in Florida, Growers Fertilizer Inc., Lake Alfred, saw the need for investment in more fertilizer transport. The company purchased several new Killebrew bulk fertilizer trailers.
Brandt Consolidated, Illinois (No. 23 on CropLife 100): Tim McArdle, executive vice president and COO at Brandt Consolidated, Springfield, IL, says the company has a planned approach to replacing equipment. “We look at the cash flow generated from equipment and the depreciation throughout the year – then we use that cash flow as a kind of benchmark for re-investing in the equipment,” he says. “There’s an old adage in our business that you’ll either pay for equipment in depreciation or repairs, and we try not to do too much of it through repairs.”
In addition, Brandt runs equipment out of 16 different locations, so it’s no small task to keep track of them all. Come buying time, managers will look across the all the locations and ask where the greatest replacement need exists or where there appears to be an opportunity for new business.
Landmark Service Cooperative, Wisconsin (No. 36 on CropLife 100): Admittedly, the costs of new rigs can be huge, attests Jim Shelton, agronomy manager at Landmark Service Cooperative, Cottage Grove, WI. “Some equipment has gone up $40,000 to $50,000, which makes no sense given the marketplace we are now in,” he says.