Farmers keep, repair older tractors "until they can't anymore"
As the price of new farm equipment continues to rise, and farm income doesn’t rise with it, many farmers are opting to keep older tractors and repair what they have – tractors they may have owned for decades. Several repair shops and service managers told Wisconsin State Farmer that they have a hard time keeping up with all the tractor and equipment repairs.
One of them, Dan Scheuers who is service manager and co-owner of Waupun Equipment, said it’s very clear that farmers are holding onto their tractors and equipment longer and choosing to repair it. “We may sell five new tractors but nobody gets rid of five older ones. It has been a challenge keeping up with repairs -- even though I have the same number of staff.”
Scheuers said that $5,000 used to be a big repair bill but now those larger ticket repairs can go as high as $10,000 to $15,000 and farmers are willing to pay it. “We’ve seen some older tractors that may only be worth $10,000 but farmers will repair them, even if it’s expensive. They do that because the price of new is high and many people are trying to avoid the various emissions controls on new tractors,” he said.
Year-upon-year of poor milk prices was evident at his business, Scheuers said. They deal in New Holland, Massey and other brands of farm equipment and saw a really bad year in 2019, until milk prices began to improve substantially near year’s end. “I mean we always made money but last year was pretty bad; then November and December were great. Then by March when the coronavirus hit, everything turned to crap.”
One of the products they sell – New Holland backhoes – is manufactured in Italy which was hard hit by the pandemic. The dealership had sold some of those industrial backhoes that were scheduled for March delivery and are now backed up to September.
Through it all, however, the repair business has been “crazy busy.” Even farmers who own tractors that are a “different color” than those they sell at his dealership have been clamoring to get things fixed, he said, because their dealerships are backed up for weeks and they need things repaired.
Scheuers said the fortunes of his business are definitely tied to milk prices. “At our store we absolutely see a link between dairy prices and our business. Our business is 82 to 85 percent dairy and it’s all tied together. At our Watertown store it’s a little less with maybe 65 to 70 percent dairy.”
In his repair shop, the age of the tractors coming in for repairs continues to get older. “Farmers tell me they are going to keep it until they can’t repair it any more because they can’t afford to buy new,” he said. “If there ever was a flush of money in the farm community, especially dairy, there would be so many tractors sold that the manufacturers wouldn’t be able to keep up.”
He sees that many dairy farmers, in trying to stay afloat, have used up equity and borrowed against assets and that is reflected in his business. As he spoke with us, he glanced at a mid-1960s tractor that was in for repair. “We have had older ones that come in too.”
Another specialist in tractor repairs, Ed Dolata, has operated Ed’s Tractor Repair in Berlin for 22 years. “I’ve turned away more work than I can take,” he told us. One dealership in his area quit taking repair work and another shop like his closed when its owner/operator died, so he has seen his business skyrocket.
He too believes farmers are keeping their older tractors because they are easier to repair than newer equipment which can be heavily computerized and because repair costs can be lower than buying new equipment. “The age of the tractors we see keeps getting older.”
Dolata said that about half of his work is for dairy farmers and he definitely could see an effect when milk prices dropped.
James Schulenburg, service manager with Mid-State Equipment in Prairie du Sac said his shop is seeing a lot of tractor repairs. “The money is not out there to buy new. We’ve been pretty busy -- above average -- and a lot of them have been larger repairs,” he told us.
“I think what may have contributed to some of these larger repairs is that farmers haven’t done routine, preventive maintenance or tractor inspections. They haven’t had the money and have just crossed their fingers. We’ve seen some breakdowns and failures that have led to some of the larger repair jobs,” he said.
Mid-State Equipment is a John Deere dealer with seven stores across southern Wisconsin. Schulenburg said the age of the tractors coming in for repair is trending older. “We still see a lot of 40 series, 50 series and 60 series tractors. Those would be from the 1970s, 1980s and early 1990s.”
He agreed that sustained low milk prices have contributed to farmers keeping older tractors and repairing them, rather than replacing them. Many of their customers are dairy farmers, he said, with a number of them in the cash grain business – which also has seen a price trough.
“A lot of what we see is because the money’s not there. Milk prices have been so low that for a farmer to buy one new tractor he can fix up the others that he has for the same money.”
Schulenburg said when a farmer brings in a tractor for repair he discusses with them what’s going to be needed and what it’s going to cost. “That way there are no surprises and they know what they have. That keeps the customer and us on the same page. If the price tag for that repair is going to be too high we talk about what we can cut out and let go for now and our expectations are the same.
“That makes the end result easier for both of us,” he added.
Steve Wambold, service manager at Carl F. Statz and Sons in Waunakee, said his shop is definitely seeing more older tractors than new come in for service. Many of them are 1456 and 1486 models, which are in the 30-year-old age range.
Many of Statz’s customers are dairy farmers and there has been a significant impact from low milk prices. “Last summer was really bad. It was like the bottom fell out of our shop work. But this summer we’ve been pleasantly busy.”
He thinks many farmers “pinched their pennies” last year as low milk prices dragged on and the passage of another year forced their hand – they had to repair that tractor or that piece of equipment this year. Wambold said he hadn’t seen any repairs that he put down to lack of maintenance, it’s just that some of this equipment is “getting downright old and worn out.”
In many cases the fix is one that “gets them by” so they can use the tractor or equipment. “The best way to describe it is equipment triage. We repair the crucial items, the things we’ve got to do and identify the things that we can let go for now,” he said.
Their business sells New Holland, Knight, Patz, Meyer and German-made Lemken tillage equipment, but the shop also works on Case IH tractors, he said.
One of the older working farm tractors they have worked on recently was an 806 International, he said.