“Desperate for Tires”: Parts Shortage Complicates US Harvest

Dale Hadden can’t find replacement tires for his combine. So the Illinois farmer told his harvest team to avoid driving on curbs this fall to prevent metal debris from destroying tires.

New Ag Supply, in Kansas, asks customers to order parts for spring planting now. And in Iowa, farmer Cordt Holub is locking his machinery inside his barn every night, after hard-to-find tractor parts were stolen from a local Deere & Co. dealer.

“You try to take care of your equipment, but right now we are at the mercy of luck,” said Holub, a fourth generation corn and soybean growers in Buckingham, Iowa.

The manufacturing collapse is hitting America’s agricultural heartland as the semiconductor shortage that has plagued equipment makers for months has spread to other components.

Supply chain problems now threaten the supply of food in USA and the ability of farmers to remove crops from the fields.

Farmers say they struggle to find solutions when their machinery breaks down, turning to local welders and mechanics. Those searching for tractors and combines online ask for close-up photos of the tires because parts are expensive and hard to find, said Greg Peterson, founder of the Machinery Pete website, which runs farm equipment auctions.

“As the harvest ends, we will see the farmers at the equipment auctions not for the machinery, but for the parts. We’re already hearing people talking about buying a second planter or sprayer, just for the parts, “Peterso said.

For some farmers, the shortage forces them to reuse – or repair – old parts.

At their small welding shop in western Washington, Rami and Bob Warburton can barely handle all the requests from farmers who need to repair anything, from sprinkler accessories to a cracked excavator bucket.

“We were in the middle of a drought,” says Rami Warburton. “At that time, they couldn’t wait a month to water their fields. The crops would be dead by then ”.

Time of a pain reliever

Problems in the supply chain due to lockdowns by the COVID-19 In factories in the United States and Asia, container shortages blocking ports and a shortage of workers prevent equipment vendors from taking full advantage of a lucrative moment, in which cereal prices have soared to the highest in almost a decade.

The Purdue University / CME Group Agricultural Economics Barometer, a monthly measure of farmers’ economic confidence, fell 10% to its lowest level since July 2020 to early October. Supply concerns are weighing heavily on producers. 55% of the farmers surveyed said that low inventories have affected their machinery purchase plans.

Access to steel, plastic, rubber and other raw materials has been tight during the pandemic, and manufacturers are bracing for more shocks after power shortages forced several Chinese foundries to cut production in recent weeks. .

When executives from agricultural machinery manufacturer AGCO Corp visited suppliers in the Midwest this summer, they found that some companies were operating with a staffing level of just 60%, said Greg Toornman, who oversees global supply chain management. AGCO.

Toornman said staffing levels are declining at some suppliers in the Dakotas, Nebraska and Texas as workers oppose the president’s vaccination mandate. Joe Biden, leave the workforce for fear of contracting COVID-19 or move to other jobs.

“It’s the perfect storm of Tylenol moments (a pain reliever). It’s one headache after another, ”Toornman said.

Supply shortages have especially put pressure on machine dealers, who often see their service business booming during the traditional harvest season from September to November.

This year, some have dug up solutions in inventory from a decade ago. One of the dealers’ problems is the industry-wide shortage of GPS receivers, which are used to guide tractors and data systems.

At Ag-Pro, Deere & Co’s largest private dealership in North America, Ohio staff have been unearthing GPS units that date back to 2004 and were, until now, virtually worthless.

But growers can still use them to incorporate a digital map of the harvest of their farms, something many need in their conversations with bankers, owners, and crop insurance agents.

Component triage

Equipment manufacturers are faced with a painful choice this harvest season: Send parts to factories to build new tractors and combines to sell to farmers, or send them to the field to repair broken equipment for existing customers?

For AGCO and rival manufacturer CNH Industrial NV, the answer is the second.

“We cannot afford not to serve those customers in the field,” said AGCO’s Toornman. “When you’re harvesting, timing is everything.”

CNH estimates that supply chain constraints, ranging from increased freight rates to rising raw material prices, have cost the company $ 1 billion.

The delay has forced the company to convert some factory parking lots into warehouses. At CNH’s combine plant on Grand Island, Nebraska, hundreds of unfinished combines are waiting for parts.

Meanwhile, CNH is redirecting components that can be used in its Case IH and New Holland equipment to customers in the field, a company representative said.

CNH has been informing dealers that supply chain problems and parts shortages for Case IH farm equipment are ongoing, according to Reuters interviews with six dealers. The manufacturer said in a statement that it is meeting customer needs “to the best of our ability given these unprecedented challenges.”

Deere said it is reorganizing export containers to make more room for goods, renting additional cranes to speed up the unloading of ships at ports and expanding its fleet of trucks.

However, the shortage of components is “especially difficult for farmers facing what is already a short window of time for harvest,” said Luke Gakstatter, senior vice president of aftermarket and customer support at Deere.

In some cases, the company has delivered unfinished machinery to customers. Missouri farmer Andy Kapp’s brand new combine came off the assembly line without some of the high-tech cameras that help provide the same efficiency that you paid hundreds of thousands of dollars for.

But he’s using it anyway, and he’s even stocked up on some parts, in case the combine breaks down.

“As the end of the harvest nears, the machinery and personnel get more tired. It is a new machine. We wouldn’t be surprised if there are some loose screws, ”Kapp said.