Big Iron opener comes amid harvest, commodity price worries

WEST FARGO, N.D. -- The annual Big Iron Farm Show has operated among euphoric times in agricultural pricing many times in the past. Not this year.

With corn prices projected around $3 per bushel for the next two or three years, farmers are scratching their heads and sharpening their pencils about how many new, big machines they'll be able to afford.

Crowds for the opening of Big Iron 34 were further toned down with a harvest-time rain in the afternoon, cancelling three of the planned four unmanned aerial vehicle (UAV) flights and sending most show-goers shuffling into buildings for the indoor exhibits.

Bryan Schulz, manager of the Red River Valley Fair in West Fargo, N.D., which hosts Big Iron, said the 2013 event had drawn an estimated 87,000 people in its three-day run. It was too soon to say on Tuesday afternoon whether this year's show would be able to reach that, but exhibitors generally said they were underwhelmed by crowds.

Schulz said the show, which runs Wednesday and Thursday, will probably be remembered for its UAV demonstrations by North Dakota State University.

Below break-even

Huddled in a tent with a golf cart were representatives for Albers Sales, a marketer of farm equipment, trucks and trailers in Oakes, N.D. Jeff Wiek, a salesman for the company, said trailer and truck sales have been steady, especially in the lower-budget equipment.

"A lot of the new stuff is moving, too," he said. "People are a little more conscious of what they're spending, but if you want it, you'll still buy it."

Dale Thomas, an owner of United Lease and Finance of Fargo, N.D., handles leasing of both new and used farm equipment, including grain bins, primarily in a 200-mile radius.

"I think the attitude is changing. People have bought a lot of new equipment over the past five or six years. Now they may not need a lot of new equipment and with the price of the commodities going down, they may not buy any more equipment."

Farmers are seeing commodity prices below their break-even prices, so "that's going to be tough," Thomas said. "I had one farmer this morning that said if it stays like this for another year after the next one, I probably won't be farming. He can survive the storm right now, but he needs to have it get better."

Exhibitor Brad Costello, an Alerus Financial relationship manager in Grand Forks, N.D., said farmers are lowering their profit expectations because of lower commodity prices.

"The fortunate thing is we've had five to seven very good years," he said. "As far as loans are concerned, it's going to be a different situation than what we've had in the past five years, but not so different than before we had this nice upswing."

"We're going to need good yields to be profitable," Costello said. "It's going to be a lot tougher to make a profit. We need a frost-free September."

Keith Rekow, district sales manager for Dairyland Seed, said farmers are "riding the fence" for committing to purchasing decisions because of slipping prices, uncertain maturity on the 2014 crop, and the rail impact. The high price of propane and a challenging drying season also raise concerns heading into the fall.

Harvest worries

"Can we get it into the elevator?" Rekow asked. "Can we get it off the field early enough to get this grain sold now for December futures? They may not get it off the field until March. Even with the soybeans, this could be a tedious harvest, depending on whether the next 30 days has below-normal temperatures and above-normal precipitation."

Rekow said he looked at four fields in northern South Dakota last week all in the early dent phase for maturity.

"They're two to three weeks behind," he said. Farmers say if they can avoid frost until Oct. 1, they'll be able to get crops to physiological maturity, but that still might mean moisture challenges, adding drying headaches.

Innovation, regardless

Despite the uncertainty in the markets and with the harvest this year, equipment developers and suppliers continue to come up with innovative designs and technology.

"We've revamped our air tanks and have what we call an iCon wireless control system -- a wireless system that uses an iPad, basically," said Randy Pistawka, director of international sales for Seed Hawk Inc. "You can take your iPad out of the tractor, go to the tank do some troubleshooting on blockages, do some manual calibrations. You can do that next to the tank, not going back and forth into the tractor."

The new system will come out in the spring of 2015.

Some farmers attending the show were shocked by the high cost of everything.

"The way they spend money now, it drives me up a wall," said Enoch Thorsgard, 97, still a cattleman from Northwood, N.D. "I'm from the old school -- use it up, wear it out, make do or do without. Nobody knows anything about that anymore."