Recently I read with interest an article by Eric Sfiligoj, editor of Croplife magazine. He was trying to answer the “age-old question” as to what kind of year economically this was going to be for agriculture. He quoted Dr. Jay Lehr, science director of The Heartland Institute who said, “We are in a golden age of agriculture right now and it isn’t going to end for decades.” Pretty strong statement, I thought. Now if he had said, “Not going to end for a year or two,” I might feel a little more comfortable.
To support his claim, the editor sites 2013 Nobel Prize winner for Economics Jim Rogers who singled out farming as the one bright spot in the economy. He also mentions Ed Lopez of the investment firm Van Eck Global. “Food, and the means to produce it, is becoming the new oil of the 21st century.”
With all this convincing proof of his positive outlook, I decided to do my own survey of industry leaders I knew personally. Mind you, I don’t deal with huge companies in my business, but much larger than Mid-Atlantic Services. I had an opportunity to speak with the presidents of Banjo Corporation and the CDS-John Blue Company and both were very optimistic for the coming year. Both had talked to higher ups in John Deere and Case IH who felt this year was going to be at least as good as last year and maybe a little better, but would not show the growth of last year, which was a record year for most involved in farming.
Now, here is my less than scientific study for your consideration. After 26 years of owning this business, I can usually gauge the coming year by how early we get busy after the first of the year. An early January start bodes well for a great year and conversely, a late February beginning is indicative of a poor year. Last year was the best year in our history, and sales got active in early December. This year, I began quoting and actually selling in early November and continue to be very active. Maybe we are just getting it right after 26 years or maybe it really is going to be a great year for ag.
However, there is a contrarian side to me from years of investing at the top of the market and selling at the bottom of it. Many sales this December were forced by the uncertainty of the upcoming tax law, depreciation, and capital gains changes. So, I am cautiously optimistic, both as an equipment business owner, and as a farmer of my own little farm on Maryland’s Eastern Shore.
Bottom line is this: the outlook at this time is as rosy as it ever has been. As farmers, we are always optimistic in the spring. Equipment is in short supply, so if you think you really need something to improve your bottom line, get it on order right away. Side dressing equipment is practically sold out now. Sprayers are still available, but running low. Spray parts are in excellent supply at the moment. Hopefully our suppliers will be able to resupply us in a timely manner. Give us a call and let us help you now while we all can still react and plan ahead.