march 2015

DEALER Northeast

The Newsletter of NoRThEAsT EquipmENT DEALERs AssociATioN, iNc.MARCH 2015 c Vol. 17, No. 192www.ne-equip.com

NEDA Salutes our Supporting Advertisers. It is our pleasure to list the names of those advertisers who support NE Dealer each month. We trust their advertisement will be remembered when goods and services are required by you, our dealer members. It is good to do business with companies who are interested in doing business with you and your industry association.

My thanks to Gary Hammond, Bob Spohn, John Komarisky, Ed Hines and Brad Hershey for chairing their respec-tive meeting as well as their welcoming and opening remarks. Their commentaries set the stage for the entire days meeting. Our early February 2015 Annual/Regional Meetings were well received by all the dealers and their staffs that were in attendance…despite extreme snow and sub-zero weather effect-

ing the entire Northeast, particu-larly in Portsmouth, New Hampshire and then our travel from Mercer, PA to Lancaster, PA with extreme fog and ice in the first 100+ miles going through the mountains. We started each meeting (with exception of Bird-In-Hand, PA) at least 30 minutes later than planned to allow dealers extra time to get to the meetings. Some never made it! I started the Annual Meeting portion of the meeting by quickly summarizing our association’s 2014 activities benefiting member dealers and their ‘crews’, including our State advocacy results that Tim Wentz conducted ‘on the ground’ at the various State offices outlining the positive results and the challenges we encountered. In addition to our efforts to amend State Dealer Protection laws in NY, VT,

continued on page 6

IN THIS ISSUE:3 Observations from the Field4, 10 Association News5 Annual / Regional Meeting Sponsors9 NEDA Dealer Exchange11 TwoGreySuits – Social Media Policies12 AGCO Dealers Benefit14 Winter Safety16 Reality in Your Shop18 Outdoor Power Equipment

20 Set Yourself Apart From the Competition20 Forklift Operator Safety Training21 NEDA - March Specials22 Terminations22 SCR Technology25 Tax Tips27 NEDA Sponsored Programs28-29 Equipment Industry News

ADVERTISER’S:2 Haylor, Freyer & Coon 7 Kioti13 BallastStar13 Charter Software15, 21 Electronic Merchant Systems17 RCI Safety 19 DiversifiedFinancial30 Federated Insurance31 Fastline Publications

February 2015 annual/regional Meetings…

Well Received!By Ralph Gaiss CEO-EVP

Mercer, PA

Albany, NY

Northeast Dealer | MarCH 2015 … 3

This publication is designed to provide accurate and authoritative information in regard to the subject matter co v ered. It is furnished with the understanding that the Northeast Equipment Dealers Association, Inc., the publisher, is not engaged in rendering legal, accounting or other professional service. Changes in the law duly render the information in this pub-lication invalid. Legal or other expert advice should be obtained from a competent professional. Some of the editorial material is copyrighted and may be reproduced only when permission is obtained from the publisher and the association.

Board of DirectorsOfficers

JOhn e. KOMArisKY, President / Past Pres. 2012Main & Pinckney Equip Inc. / Auburn, NY315-253-6269 - FAX 315-253-5110New Holland, Simplicity, Brillion, Bush Hog [email protected]

JOsh AheArn, First Vice President / Treasurer /NAEDA OPE Dealer CouncilAhearn Equipment, Inc. / Spencer, MA508-885-7085 • Fax: 508-885-7261Kubota, Cub Cadet, Stihl, NAPA [email protected]

rOBerT sPOhn, Second Vice President / Past President - 2005Sharon Springs Garage / Sharon Springs, NY518-284-2346 • Fax: 518-284-2774AGCO, White, Hesston, Gehl, Kubota, Allis, [email protected]

eD hines, Immediate Past President 2014, 2001Hines Equipment / Cresson, PA814-886-4183 • Fax: 814-886-8872Case IH, Gehl, New Idea, Cub [email protected]

BriAn cArPenTer, NAEDA DirectorChamplain Valley Equipment / Middlebury, VT802-388-4967 • Fax: 802-388-9656New Holland, Case IH, Kubota, [email protected]

rALPh GAiss, CEO and Executive Vice Pres.800-932-0607, Ext. [email protected]

DirecTOrsscOTT BAir, Director ElectMountain View Equipment, Inc. / Plattsburgh, NY518-561-3682 • Fax: 518-561-3724John Deere AG/CCE, Claas, Kuhn Knight, Kverneland, Stihl, Husqvarna, Frontier, Servis, [email protected]

GArY hAMMOnD, Past President - 2006Hammond Tractor / Fairfield, ME207-453-7131 • Fax: 207-453-7825 John Deere Ag, CP, Golf, Forestry, Kuhn, Kubota, Woods, Bush Hog, Walker, [email protected]

BrAD hersheYHoober, Inc. / McAlisterville, PA717-463-2191Case IH, JCB, [email protected]

nATe shATTUcK, Past President - 2010Devon Lane Farm Supply, Inc. / Belchertown, MA413-323-6336 • Fax: 413-323-5080Yanmar, Landini, Monosem, Ferris, Simplicity, Stihl, [email protected]

scOT L. sTAnTOn, Past President - 2003Stanton Equipment Inc. / East Windsor, CT860-623-8296 • Fax: 860-627-9832John Deere Ag., Knight, Athens, [email protected]

WenDeLL WALLDrOff, Past President - 2002Walldroff Farm Equip., Inc. / Watertown, NY315-788-1115 • Fax: 315-782-4852New Holland, Hesston, Woods, White-New Idea, AGCO, [email protected]

DAviD WArner, will be completing Jeff Bull's termWarner Tractor & Equipment Inc., Troy, PA570-297-2141Case, Case/IH, Takeuchi, LinkBelt, LandPride, Agr. & Construction [email protected]

NoRtHeAst equiPMeNt DeAleRs AssoCiAtioN128 Metropolitan Park Drive • Liverpool, NY 13088

800-932-0607 • www.ne-equip.com

2015 Annual / Regional Meeting Recap! Just as with last year, we changed several things around and, rather than beginning in Lancaster, PA and ending with the last of the five meetings in Portsmouth, NH, we reversed the locations and began in Portsmouth, NH. This year, we again featured two speak-ers whom, based on the feedback we have received, delivered one of the best programs yet! Ralph opened the meetings with a recap of the association’s major activities in 2014

and finished the NEDA portion with Director Elections. The elections were followed with a brief legislative update and Federated’s introduc-tion of their Precision Agriculture and Cyber Liability coverages. Darwin Allen of HF&C then introduced a new OSHA compliance program, Michael Herrera of HF&C, reviewed changes to the Health Insurance regulations, and offered a Complementary Consultation. Steve Norris from Diversified Financial Services (DFS) ended the business meeting with a review of the new DFS offers and programs for retail financing. Anne Salemo, President of Charter Software Inc., our first featured speaker, followed with an outstanding presentation packed with insightful ideas and suggestions focused on helping dealers find realistic solutions to those “persistent” challenges, all of which were based on sound business fundamentals. John Chapin took the floor before and after lunch and closed our meet-ings with his sales-focused presentation, which was full of common sense and innovative solutions focused on improving not only sales production but also the “attitude” of all, ownership and staff included! I’ve yet to have a dealer tell me that they have too much cash on hand or that they have obtained 100% market share in each and every market segment. While NEDA is blessed with an abundance of extraordi-nary dealerships both “large” and “small”, I doubt that any dealer could not readily list a significant number of “opportunities” for improvement within their dealership(s). Although John’s program included lots of inno-vative ideas and techniques, he stressed the fact that many of the most effective solutions have resulted from simply going back to the basics, working the “numbers”, applying common sense. A lesson easily forgot! I’d like to offer my appreciation to all our member dealers and their employees attending our 2015 regional meetings, and also extend my sin-cere thanks and gratitude to the many corporate sponsors who enabled our meetings to be a huge success. It is through their generosity that we are able to provide you with an exceptional series of educational and social meetings at a reasonable cost. Please be sure to thank the sponsors listed on page 5 for their support, to you their dealer/customers and to our association. Their support is invaluable!

When you ReAP the benefits of membershipyour PRoFits will follow

Observationsfrom the FIELD

Tim WentzField Director717.576.6794

4 …”Committed to Building the Best Business Environment for the Northeast Equipment Dealer”

Cummings and bricker, inc. PartnersWith northpoint Commercial FinanceBatavia, NY – Cummings and Bricker has named Northpoint Commercial Finance as its inventory floor plan financing partner for the company's dealer network.Northpoint's role is to provide financing to Cummings and Bricker dealers to allow them to stock inventory and finance specific products with extended terms. Gene Cummings, President for Cummings and Bricker Inc., said Northpoint was chosen because of its extensive industry knowledge and experience in creating pro-grams for its distribution business. “Northpoint's management has an average of 20 years or more of inventory management experience”. "Their organization leverages experience and innovative technology to provide exceptional service to our customers," Cummings said. "This is also a highly customer focused organization, that has been particularly responsive to our needs and that will benefit our dealer partners." Dan Radley, Northpoint's CEO said, "Northpoint is excited to align with Cummings and Bricker, a leader in AG equipment distribution with premier products and an impres-sive dealer base. We look forward to working closely with Cummings and Bricker and delivering unparalleled service to their customers." Cummings and Bricker is an independent and privately owned company. With over 50 years of experience, Cummings & Bricker is held in high regard as a leader in offer-ing quality and innovative products to the agricultural industry. A full service distributor, Cummings & Bricker, Inc. bridges the gap between manufacturer and dealer, providing functions which lower distribution costs through warehousing and marketing. For more information call Jeremy Kremski at Cummings and Bricker: 1-800-222-8969 Extension 1104 or visit www.cummingsandbricker.com Northpoint Commercial Finance, headquartered in Alpharetta, GA, is a diversified inventory finance company which partners with manufacturers, distributors and dealers to provide financing for their distribution channels. For more information contact John Durnien, VP, Business Development, at 678.981.8288 or visit www.northpointcf.com.

new Director to Fill the unexpired term of Jeff bull David Warner is Co-President of Warner Tractor and Equipment Inc., located in Troy, PA. The business was started in 1945 by his father Gerald Warner. After going to school at The University of Buffalo, where David earned a Master 's degree, he worked for Merck Pharmaceuticals as a research chemist and then worked as a financial consultant at Shearson Lehman Brothers before returning to Warner Tractor in 1987. David has served as chairman of The Troy Township Sewer and Water Authority revising their Act 537 for a major sewer expansion for Troy Township. In January 1991 David and his brothers each purchased half of the Warner Tractor stock and have been managing the company since then. David loves vacationing at the beach with his wife Barbara, when time permits.

CUMMINGS & BRICKER

NortheastEquipmentDealersAssociationEstablished 1901

Committed to Building The Best BusinessEnvironment for Northeast Equipment Dealers

Thank you SponsorsNEDA would like to thankthe following sponsors fortheir support of the2015 Annual / Regional Meetings.


February 2015 annual/regional MeetingBird-in-Hand, PA

Bird-in-Hand, PA

Albany, NY

Geneva, NY

Albany, NY

Portsmouth, NH

continued from page 1

ME, PA and we also had to address a num-ber of new challenges. In VT enhanced “Sales Tax Audits” conduct-ed by inexperienced and poorly trained personnel resulted in over $2,000,000 in denied exemptions, costly appeals, legal fees and lost time at dealerships. NEDA and other VT partners are working hard to update the VT State Tax Code Legislation, long-term solutions as well as pursuing short-term resolutions. Mas-sachusetts “Hoisting Law” along with its li-censing requirements has proven to be a challenge for equip-ment dealers, particu-larly those operating rental fleets. We be-lieve the regulation is ‘unreasonable and confusing’ and we are working towards amending the law to-gether with our part-ners and help from our dealer members. Dave Close to-gether with a website professional that un-derstands both equip-ment and the associa-tion business, rebuilt our association web-site and began workfocused on improving the association’s communica-tion platforms to include social media and other tech-nologies. The new website included improved site navigation and enhanced search capabilities making it easier for dealers and others to quickly find infor-mation and resources. We are pleased with the work Dave did and we hope the new website will also func-tion as a recruitment tool to attract more member dealers, affiliate members, our partners and other supporters.

I then shared that the association is introducing a new “Member Health Care insurance Plan” avail-able to members in all nine States. Program details were presented by Mike Herrara, Health Group Director for Haylor, Freyer & Coon (HF&C) Insurance Companies. Darwin Allen, VP and General Manager of HF&C Branch Office in Morrisville, NY also reported on our other ma-jor endeavor “NeDA Dealership Workplace safety and osHA Compliance Assessment Program”

continued on page 8

Tier 4 Lineup

In 2013, KIOTI® proudly became one of the first manufacturers in the world to bring Tier 4 compliant compact tractors to North America. The excitement continues with Daedong® Eco Technology and a new pack of models including the PX, DK10 series, CK10 series, and the MECHRON® 2200PS & MECHRON® 2240 2 row UTV. You can now offer your customers more power, lower fuel consumption and the features and comforts they want most. Not a dealer yet? Let’s fix that at Kioti.com or call 877.GO.KIOTI.

© 2015 KIOTI Tractor Company a Division of Daedong-USA, Inc.

A Good YearIt’s

to become a KIOTI

dealer.

Kioti.com

Gold Level Status

2014

2014 Gold Level Status Presented to Kioti for attaining an outstanding level of achievement based on dealer ratings from the NAEDA Dealer/Manufacturer Relations Survey

Winner


February 2015 annual/regional Meeting

Geneva, NY

Mercer, PA

Portsmouth, NH

TH NK

Northeast EquipmentDealers Association

www.ne-equip.com

st1ASSOCIATION


that will become available to all members no later than June 2015. Darwin also provided an update on the Workers Compensation Safety Group 548 he man-ages for NEDA and our NY dealers, Federated Insurance and Diversified Financial Solutions personnel provided an update highlight-ing current issues and new trends in the equipment, insurance and finance industries including new pro-grams they developed to benefit and support our equipment dealers. At the conclusion of each Annual Meeting, elec-tions took place for three Directors, the elected Direc-tors for three (3) year terms are John Komarisky (Pres-ident), Main & Pinckney, Auburn, NY; Scot Stanton, Stanton Equipment, E. Windsor, CT; and Scott Bair, Mountain View Equipment, Middlebury, VT & Platts-burgh, NY. After elections we opened the Regional Meeting and started off with Anne Salemo, President of Char-ter Software, Littleton, Colorado and her subject was “What is Keeping You Up At Night” followed by John Chapin, owner of a Coaching, Trainer and Speaker company named “Complete Selling Inc.” of Auburn, Massachusetts and his subject was “Super Charge Your Business and Your Attitude”. Both Anne and John’s presentations were much different from our past ‘Recognized Industry Present-ers’ because in addition to the normal message…Anne and John talked about how to use ‘Current Technol-ogy’ to solve the difficult challenges dealers face every day. Everyone at the meeting easily relat-ed to the presentations noting they were done in a straight forward manner with levity, and created questions that were answered on the spot. Most important, when people got back to their stores what they learned can be easily and realistically implemented one item at a time each month. At the end of each of our five meeting, it is fair to say that over half of the audience told either Dave, Tim or me that both Anne and John was the best program we had, and

it gave them idea’s they intend to implement to improve how to operate their business. They also told us the dealers that were not at the meeting and invested their time to attend “will never know what they missed” As an aside we already received requests from a few dealers that were not in attendance requesting copies of Anne & John’s Power-Point presentations. Dave makes it clear the Power Point written presenta-tion no way provides the ‘ambience of how the pre-sentations were made’. The physical presentations were awesome! Please make a note to pencil in a reminder not to miss our February 2016 Annual Regional Meetings in the first two weeks of February…you don’t want to miss it…because we will have presenters from the D.O.T. that will also be sharing with us what you will need to do when electronic log books in your trucks become mandatory in 2017…and if in fact you may have an alternative to the law! Your individual ques-tions will be answered ‘on the spot’. We also plan to have another speaker.


Please fill out below andsend to NE Dealer editor:[email protected].

Any questions can be directed to the NEDA Office at 1-800-932-0607.

BUY SELL TRADE GIVE AWAY (Please check one)

Company Name ___________________________________________________________

Contact Person (if necessary) _______________________________________________

Phone_______________________________ Email ______________________________

Please use the following space to include all pertinent information to complete exchange (including make, model, condition, price, etc.).

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neDa board Members elected in 2015 At the February 2015 Annual/Regional Meetings, members elected three Board Members to three year terms. They are: • John Komarisky Main and Pinckney Auburn, NY NEDA 2015 President

• Scot Stanton Stanton Equipment, Inc. East Windsor, CT

• Scott Bair Mountain View Equipment, Middlebury, VT and Plattsburgh, NY

It was also announced that Dave Warner, Warner Tractor Equipment Inc., Troy, PA will complete the last term as a board director, replacing Jeff Bull, Bull International Inc., Washington, PA. (It was noted that Jeff voluntarily went out of business November 2014. He is no longer eligible to serve on the Board per Association By-Laws, because he is no longer an Equipment dealer) Also, at the November 19, 2014 NEDA Board Meeting the Board recognized Gary Hammond, whose term expired February 2015, for his many years of service to both Maine and Northeast dealers for over the past two decades. Gary also served as President of the NEDA and the New England Dealers Associations. Gary may no lon-ger fill a place at the Board table, but his dedication to NEDA and Northeast Equipment Dealers will continue in our Government Relations efforts. The Board also recognized Jeff Bull like Gary also served both Penn-Jersey Dealers Association and as President of NEDA. Jeff has been a strong proponent of NEDA’s Manufacturer and both State and Federal govern-ment relations efforts. Thank you Gary and Jeff. The officers and staff of the Northeast Equipment Dealers Association appreciate the dedication of all our Board and members-at-large who volunteer to support us in our many legislative and other initiatives

~ Ralph Gaiss, CEO

Komarisky Stanton Bair

Hammond

Bull


IMPLEMENT SOCIAL MEDIA POLICIES THAT WORK FOR YOUR COMPANY

Social Media is here to stay and companies are struggling to react to the phenomenon. When you sign up for the TwoGreySuits HR service that NEDA is offering to our members for just $325 per year, you’ll have access to a full suite of Social Media workplace policies…they’ll help you position the social media reality positively for both your company and your employees. First, explore the HR Power Centre at www.twogreysuits.com. It contains everything you need for effective people management. And, when you need answers fast, you can talk to a senior HR Professional 24/7 through the HR Hot Line. Signing up is hassle free. Just click on the URL below and you will be taken to NEDA’s customized sign up page. Fill in the information including the association code which we will provide and you will receive immediate access to the TGS System. NEDA will invoice you for the subscription fee. Sign up today and receive John Walker’s “Technician’s Articles” absolutely free. This is a $59.99 value that is being offered to you from John Walker.

https://neda.twogreysuits.com/sign-up

For more information or questions, please call Dave Close or Ralph Gaiss at the

Association at 800-932-0607

News Helping Dealers Succeed

INDUSTRY


in order to be certified on each AGCO dealer transaction as it becomes available to their deal-ers. Last March, Charter received certification for their AGCO API integration added to the ASPEN AGCO Communications Interface, which provides AGCO dealers with functionality needed to meet requirements for AGCO’s Dealer Excellence program. “We are very pleased with the revised vendor certification process announced by AGCO last year,” says Kendall Edwards, Charter Software Business Analyst who manages the certification process for Charter’s supplier inte-gration. “It’s been a very smooth process rolling out the new AGCO integration, and we look forward to working with them again soon as we move forward with addi-tional integration for the ASPEN system,” says Edwards. “The more functionality we can provide to our dealer customers from with-in our software, the more effi-cient and profitable they become, which is our ultimate goal in serv-ing our customer base.” "I'm excited to have this inte-gration between AGCO Plus+ and Charter's ASPEN system," adds Neal Generose, Director of Project Management for AGCO Plus+. The integration with AGCO Plus+ from the dealership management sys-tem makes it much more acces-sible for AGCO dealers to use," he says.

AGCO dealers using Charter Software’s ASPEN AGCO Plus+ Interface can now save time, increase sales, and better serve their customers with easy access to the AGCO Plus+ Commercial Customer Credit program right from within the ASPEN business system. AGCO Plus+ is a new AGCO Finance financing solution that allows AGCO dealerships' custom-ers to proactively manage their cash flow. With promotions and programs such as competitive retail rates for new machinery sales, aggressive rates for used machinery, as well as financing for parts and service, access to the AGCO Plus+ program can great-ly impact dealership sales year-round. “Supplier incentives like AGCO Plus+ provide AGCO dealers' cus-tomers with the means to stock up on parts, purchase essential equipment, and pay for repairs and/or preventative maintenance during critical times of the year when they may not normally have the cash flow, which can help level out the seasonal dips in revenue many dealers experi-ence”

Anne Salemo, President, Charter Software Inc.

“A preventative maintenance schedule benefits both dealer and customer—customers can have their machines serviced regard-less of their seasonal financial situation, which in turn helps to round out the seasonal dips in a

dealership’s service calendar,” says Charter Software President Anne Salemo. “Having access to infor-mation about available financ-ing and promotions directly from their business system can help to make or break a sale for dealers. It can provide a huge advantage in increasing the dollar amount of a sale in process or in securing the sale of an item their customer might not otherwise consider.”The ASPEN AGCO Plus+ interface also allows dealers to safely store AGCO Plus+ customer numbers in the ASPEN system, which saves processing time at checkout, or allows them to use the account information to process a split-ten-der transaction. From the ASPEN work order or invoice, dealers can view and apply any available promotions for which the eligi-ble invoiced items or total dol-lar amount qualify. Additionally, dealers can opt to automatically split a ticket into several invoices in order to apply multiple promo-tions to result in the best possible deal for the customer. Using the ASPEN interface, dealers can check the customer's account balance right from their ASPEN Customer record. "Knowing the customers' remaining account balance can be just the right amount of informa-tion needed in order to close on a sale," says Salemo. The ASPEN AGCO Plus+ inter-face is a certified, standalone interface for the ASPEN system. Charter Software’s development team works closely with AGCO

AGCo Dealers Benefit from New integration Available in Charter software’sAsPeN Dealership system


Your business information— wherever you are!

● Accounting ● Inventory ● Rental ● Sales ● Service ● CRM

● OEM Integration ● Mobile Access● Customer Portal ● Data Mining

Smart Equipment Dealers Guide to Managing Remotely

chartersoftware.com/managing-remotely

NortheastEquipmentDealersAssociation

Established 1901

Endorsed Provider

Complete, NEDA-Endorsed Dealership Management System


WINTER SAFETY

Practice ignoring Your Negative thoughts It has been estimated that the average human being has around 50,000 thoughts per day. That's a lot of thoughts. Some of these thoughts are going to be positive and productive. Unfortunately, however, many of them are going to be negative - angry, fearful, pessimistic, worrisome. Indeed, the important question in terms of becoming more peaceful isn't whether or not you're going to have negative thoughts - you are - it's what you choose to do with the ones that you have. In a practical sense, you really have only two options when it comes to deal-ing with negative thoughts. You can ana-lyze your thoughts - ponder, think through, study, think some more - or you can learn to ignore them - dismiss, pay no attention to, not take so seriously. This later option, learning to take your negative thoughts less seriously, is infinitely more effective in terms of learning to be more peaceful. When we have a thought - any thought- that's all it is, a thought! It can't hurt you without your consent..." If you want to learn more about the power of PEOPLE SOLUTIONS THAT DRIVE BUSINESS PERFORMANCE, contact: JP Horizons Inc. at [email protected] or go to www.jphorizons.com.

top 10 Wayssuccessful People increase sales

1. They are not afraid of change. 2. They build relationships with their

prospects and customers. 3. They dare to be different. 4. They watch their expenses. 5. They know their cost of doing busi-

ness. 6. They have and use a sales marketing

plan. 7. They delegate duties. 8. They only market to their perfect

prospects. 9. They run promotions, not sales. 10. They respect their competition, but do

not fear them.~ Bob Janet

99 Of The Greatest Sales Tips of All Times

F R O S T B I T E In cold climates, everyone is susceptible to frostbite, but taking a few simple precautions can help keep you safe and healthy during the winter season.

CAuses Frostbite is caused by prolonged exposure to cold temperatures, usually accompanied by a low wind chill factor or by brief exposure to excessively frigid or wet conditions.

Risk FACtoRs Certain people are more susceptible to developing frostbite, in-cluding children, the elderly and those with circulatory problems. People who have diabetes are also at a greater risk.

sYMPtoMs Symptoms of frostbite may include partial or complete numb-ness, discoloration of the skin and burning and/or tingling sensa-tions. If left untreated, frostbitten skin gradually darkens after a few hours. Skin destroyed by frostbite is completely black and looks loose and flayed, as if burnt.

PReVeNtioN To reduce your risk of frostbite, it’s important to protect your hands, feet, nose and ears. Bundle in warm, layered and loose-fit-ting clothing when heading out into winter’s worst weather. At the first sign of redness or pain in your skin, which may in-dicate that frostbite is developing, get out of the cold. Also, avoid drinking alcoholic beverages—alcohol may prevent you from real-izing that your body is becoming too cold. You should also avoid smoking cigarettes, which can constrict your blood vessels and cut off blood flow, increasing your risk of frostbite.

tReAtMeNt Move to a warm area and remove any wet clothing as soon as

possible. Do not rub or massage your skin or break any blisters, and do not apply direct heat from heating pads, radia-

tors or fires. Instead, place the af-fected area in warm—not hot—water until the skin is soft and sensation has returned. If no water is nearby, cup your hands

around the affected area and blow warm air onto it. Next, wrap

t h e area in clean dressings and seek medical help.

If it is unlikely that the affected area can be kept thawed before seeking medical attention, do not take steps to treat it—re-exposure to cold can cause more extensive and severe damage.

~ Courtesy of Haylor, Freyer & Coon, Inc.

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This is the first installment of a two-part article that will continue in the NE Dealer April issue.

More often than not perception can become reality. if we look and feel successful we will be successful! Years ago while doing some work for a farm equipment dealer I walked into his shop and service department. It was literally a “pig pen”! Several months ago while doing work for a lift truck dealer, I noticed that one of his service vans parked in the lot was a disgrace on the outside, particularly in light of the fact that all other vans looked very clean and professional. I opened the back door of the van and was not surprised to see that it looked like a garbage truck on the inside. Reality, as described by Webster is: “The quality or state of being actual, or of being true” . . . Webster I mentioned to both the Service Manager and the Dealer Principal what I had seen while inspecting the van and here were their comments: Joe is a “super” technician and we have talked to him on numerous occasions about the appearance of not only his van but his own appearance, to no avail. Well the first reality is that Joe is not a “super” technician. I’ve discovered over the years that any technician that neglects the appearance of: a) his work-station or b) his service van, or c) his personal appearance is not a “super” technician, but a simple “wrench turner” with a low level of efficiency. The second reality is that Joe is holding the Service Manager and the Dealer Principal hostage. Both were afraid to take corrective action because as they told me: “You don’t know how hard it is to find quality technicians in this area of the country!” The third reality is that Joe’s attitude of indifference; his low efficiency is “dragging-down” the other 20 or 40 shop technicians. The other technicians pick up quickly on what Joe is allowed to get away with and their work habits and attitudes drop accordingly to Joe’s level . . . that’s the reality! Over the years we have written numerous articles about hiring veterans. I have been pleased with the comments we have received from our readers. Most all the comments have been positive. Most of the negative comments center around the fact that “these Vets” don’t have the experience of working on the equipment dealers sell. That’s probably quite true but let me say this: 1) you will find that they learn a whole lot quicker then someone fresh out of High School because the three years (minimum) time they served us in the military helped them to develop a solid “work ethic”, and a pretty positive attitude about work. 2) You

won’t find a problem similar to what I said at the beginning of this article. Veterans lived and worked under a system of inspections of their work area and of the job they just finished. You don’t have to tell these people twice about keeping their work area cleaned up. 3) Promotions (pay raises) are given out not necessarily for time in grade, but for their work ethic, willingness to learn and their ability to work as a team. As one client, who has numerous veterans says: “Yes it takes a bit of patience, but we have found that all you have to do is show them or tell them just once and they have “got it”. A Service Manager wrote me the following and with some slight editing I have changed it so that the words flow more easily. “If a Service Department is to market itself for credibility, our dealership feels that service quality is an area that must be strengthened and developed even before a marketing plan is made.” “It is difficult to maintain a high true labor rate if you are constantly writing inefficient labor off in order to invoice your customer equitably, and are mired down in rework. I believe this to be a more difficult practice than proactive service marketing, since it is so dependent on the individuals that are hired. I have finally gotten this dragon by the tail at my own dealership. After 7 years of careful planning, hiring and firing, I am now able to rely fully on my marketing, since I can now rely on the quality of the product (service) we are providing, and the individuals providing that service.” He went further by saying: “I can tell you that this is the single issue I have grappled with the most, and it is very rewarding to be able to see the fruit of that labor borne out in a runaway marketing program and growing margins and market share. I have had competing dealers tell me that in some cases the only reason they cannot persuade a customer to buy their product over ours is singularly due to the quality and presence of our service department. We learned the hard way that service with a poor reputation is a hard sell!” Many dealers are learning that the issue of service quality is markedly more difficult than service marketing since it requires a good deal of time, long range planning and basic complex Human Resource procedures. As we mentioned, too many equipment dealers are held hostage to inefficient and unskilled employees that hamstring their quality and destroy customer confidence in the equipment dealership. Without confidence in your dealership’s service quality, service marketing is powerless.

REALITYin Your shop!

tHe AFteR MARket sAles FoRCe

by JoHn WalKerPresident, After Market Services Consulting Co., Inc. – 817 Stockbridge Drive, #399, Ft. Mill, SC 29708 • Cell 918-230-0791

www.amsconco.com


Who must have an SPCC Plan?

Any business that has a cumulative above ground storage capacity of 1,320 gallons or more of oil in containers of 55 gallons or larger.

Why do I need an SPCC Plan?

The bottom line is that every EPA region is con-ducting SPCC inspections and assessing fines for non-compliance. The fine for not having a plan may be as high as $1,000 in addition to any infrac-tions. The size of a facil-ity has not been shown to exclude it from an inspection. How can RCI help? RCI has developed an SPCC program that meets the latest federal requirements, provides technical support from staff P.E.’s and cus-tomer service representa-tives, and is accessible on-line, all at an economical price.

What are the benefits to RCI’s program?

It’s easy. NEDA com-

pletes all field work and facility inspections.

Facility and personnel

changes are easily amended with the on-line program.

RCI keeps your SPCC

plan up-to-date with regulatory changes.

All forms and checklists

are built into the pro-gram.

RCI can easily re-

certify your on-line plans every five years as required by law.

Toll free assistance

from RCI P.E.’s and customer service rep’s.

You can access your

plan from any location and monitor multiple sites.

NEDA 128 Metropolitan Park Dr.

Liverpool, NY 13088

315-457-0314 800-932-0607

[email protected]

NEDA Liverpool, NY


OUTDOOR POWER EQUIPMENT

With the recent purchase of two companies widely recognized as innovators, outdoor power equipment leader MTD Products Inc. has strengthened its commitment to help professional landscapers, grounds care professionals, and lawn and garden care enthusiasts push the bounds of what they can accomplish. Last month, MTD - the parent company of Cub Cadet, Troy-Bilt, Columbia, Yard Machines, Remington, Arnold and other brands - ac-quired CORE Outdoor Power (CORE), a Polson, Montana-based com-pany that powers outdoor lawn care equipment with gasless motor technology that produces higher torque and increased efficiencies than traditional electric motors. CORE Outdoor Power's products have received accolades from leading industry media for having the perfor-mance and durability of gas engines and the ability to withstand the most demanding commercial applications, while producing zero emis-sions and very little noise. Prior to the purchase of CORE, MTD also acquired Precise Path Robotics, an Indianapolis-based company that has brought to mar-ket the world's only commercially available autonomous greens mower, the RG3, designed specifically for golf course putting greens. Advanced robotic technology allows the RG3 to travel in straight lines and along curved perimeters without the need of an operator to guide it – enabling golf course superintendents to achieve consistent and excel-lent course conditions while reducing operating costs.

AcquisitionsPoise MTD to Shape Future of

outDooR PoWeRequiPMeNt iNDustRY

utdoor Power Equipment Council

The OPE Voice of Northeqst Equipment Dealers Association

COUNCIL MEMBERSDale Magie, Chairman ... Liberty Twp., OHDale Fronheiser ... Bechtelsville, PADan Huff ... Pomfret Center, CT

OpERatINg StaffKim Rominger Bill Garling Dennis Alford Dave Close Ralph Gaiss Tim WentzScott Grigor

NEDa ... Northeast Equipment Dealer association(CT, MA, ME, NH, NJ, NY, PA, RI, VT)

CHECK THE REASONS NEDA iS DESigNED TO mEET YOUR bUSiNESS NEEDS!P Legislative RepresentationP Dealer-Supplier RelationsPLegal Counsel HotlinesPBusiness and Group InsurancePMonthly Newsletters and Weekly EmailsPCredit Card ProgramPEndorsementsPHuman Resource (HR) ManagementPAnnual Regional MeetingsPBusiness Forms & SuppliesPTrade-in and Flat Rate GuidesPCost of Doing Business SurveysPWage SurveysPNational AffiliationPwww.ne-equip.comPStaff Resources / Information

Let us prove that membership doesn’t cost ... it pays!

Your link to the power equipment industry ... is NEDA!

Wisconsin Court Rules Manure Is Pollutant The state Supreme Court says manure qualifies as a pollutant as defined in an in-surance policy in a case that began in 2011 when state environmental officials notified West Bend dairy farmer Robert Falk that manure spread on his fields had contami-nated his neighbors' wells. The neighbors demanded compensa-tion. Falk turned to his insurance company, Wilson Mutual, but his policy excluded cov-erage for damage caused by pollutants. A state appeals court last found the exclusion was valid. But the high court reversed that decision. The court ruled 5-1 that manure is clearly a pollutant when it seeps into a well. However, the court found that a prop-erty damage clause in the Falks' policy requires Wilson Mutual to pay up to $500 for each well.


Equipment dealers have diff erent needs when it comes to retail fi nancing.

Equipment dealersare like fi ngerprints…no two are alike.

Diversifi ed Financial’s retail fi nancing,leasing and insurance programs provide value and benefi ts that meet the unique needs of every equipment dealer.

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• No Recourse, No Reserves - Diversifi ed funds 100% of amount fi nanced with no contingent liabilities

• Increased Profi t Margins - Using origination fees

• Low, Competitive Interest Rates - Fixed rates36-72 months

• User-Friendly Programs - Same rates for new and used equipment. Leases available.

• Sales Bonuses - Paid directly to sales personnel

• Quick Dealer Settlements - You get your money faster with Diversifi ed (via ACH or overnight)

• Physical Damage Insurance - One-stop fi nancing and insurance

Diversifi edFinancialPH. 800-648-8026www.dfsfarm.com


Set Yourself APARTFROM THE COMPETITION

Many of you experienced record sales in 2012, which were easily surpassed in 2013 and 2014 indicated the same strength in the market, but the pace slowed during the growing season – with lower commodity prices across the board. 2015 remains a question mark at this point. It is easy to be pessimistic – especially when it seems that every farm article is negative – low crop prices, high input costs, high cash rents, etc. However, sales will still be out there. They were there before the commodity price spike as well, even though that is hard to remember after the last couple years. Many of us have been order

takers over the last 2-3 years and haven’t had to work real hard on our sales presentation. I’ve heard stories where the

grower has told you to order the equipment before even hearing the sales price. While I’m sure that those times were very profitable and fun for you, it appears that those times have changed. Given the negative factors playing into 2015, you may need to adjust your sales

pitch to be successful. Finance packages will be much more important going forward. Record farm income

during the 2012-2014 time frames increased the amount of true “cash sales”, we would all agree on that. As mentioned before, times have changed. What has worked for you in the past may not work for you in the future. It is now a time to throw everything that you have into each sales proposal. Don’t lose a deal because your competitor had a better “package”. Make sure you understand the finance/insurance options that are available from Diversified Financial – and make sure your customer knows exactly what those options are. Don’t assume that your customer doesn’t want or need finance/insurance. Give them a Diversified finance/insurance quote on every proposal – don’t wait for them to ask for it. You will be surprised how many take you up on it. All farmers are watching cash flow a lot closer, so financing is much more appealing to them now than it was over the last 2-3 years.

~ Diversified Financial

TRAINYOUR

TRAINERForklift

OperatorSafety

Training&

Certification Courses

required every three years

If you do not have a certified trainerat your dealership or have mistakenly

let your certifications lapse ...

NEDA cAN hElp!

If you do not have a certified trainerat your dealership or have mistakenly

let your certifications lapse ...

NEDA cAN hElp!

NEDA staff provides one forklift safety training

& certification course at your dealership

for all staff personnel authorized to operate

your forklift(s)[must be over 18 years of age or older]

$400.00Plus Expenses for on-site training

Training Materials IncludedPrices Subject to Change

If you would like to schedule acErtIfIcAtIoN/

rEcErtIfIcAtIoNCall Kelli or Dave

at the Association, 800-932-0607

BY JOSH HAGAN

Many of us have been order takers over the last 2-3 years and haven’t had to work real hard on our sales presentation.

TH NK

Northeast EquipmentDealers Association

www.ne-equip.com

st1ASSOCIATION


Northeast Equipment Dealers Association Serving Farm, Industrial & Outdoor Power Equipment Dealers Since 1901

***MARCH***

18-WATT WORK LIGHT HIGH POWERED Fits into PAR36 Housing

FRONT BACK Difference between LED and Halogen 3x brighter WL18-HP WL18HP-TRAP

18-watt work light 12-24V 18-watt work light Fits Par36 Housing 1500 LUMENS Fits Par36 Housing 60 degree flood pattern CREE DIODES Trapezoid pattern Regular Price: $64.66 Regular Price: $64.66 Special Price: $51.72 Special Price: $51.72 Retail Price: $79.95 Retail Price: $79.95 Case Pack: 50 Case Pack: 50

Order Form Item # Qty. Cost Ea. Total Dealership Name: __________________________ WL18-HP ________ $51.72 ___________ Shipping Address: __________________________ WL18HP-TRAP________ $51.72 ___________ City, State, and Zip: ____________________________ SUB TOTAL ________ Terms: NET 30 DAYS TO APPROVED MEMBERS (If not for resale) TAX ________ Freight: PREPAID FREIGHT ON CASE QUANTITIES SHIPPING ________ TOTAL ________ Payment Method (Prepayment is required) Check Enclosed (Payable to NEDA) __________ Credit Card (VISA or MC) Acct # ____________________________________ Exp. Date: ___________ (Circle One) Cardholder Name: _____________________________ Signature: _______________________________

128 Metropolitan Park Drive, Liverpool, New York 13088 • PO Box 3470, Syracuse, New York 13220 800-932-0607 / 315-457-0314 Fax: 315-451-3548 Website: www.ne-equip.com

OFFER EXPIRES March 31, 2015


SAMPLE POLICY

sAMPle PoliCY 1: “There are two ways to terminate employment: voluntary and involuntary. Voluntary terminations include resignations, retirement, failure to return from leave, failure to report to work for three consecutive days without notifying the company, and completion of a contract. Involuntary terminations include layoffs and disciplinary action. Employees who want to leave in good standing will give their supervisor at least two weeks’ notice.”

sAMPle PoliCY 2: “Certain conduct is so repugnant to the policies of XYZ that it will lead to immediate discharge. Such conduct includes, but is not limited to:

• Reporting for work under the influence of alcohol or controlled substances.

• Possession, use, sale or distribution of controlled substances on XYZ property.

• Theft.• Engaging in harassing conduct.• Fabrication of business documents, including

resumes and expense reports.• Excessive absenteeism or tardiness.• Fighting on XYZ premises.• Abuse of equipment (including excessive

personal use of office equipment).• Insubordination.• Gambling on XYZ premises.

"Note that these are only guidelines and, depending on the circumstances, even a first offense may be punishable by termination."

sAMPle PoliCY 3: “Your employment at XYZ is ‘at will,’ meaning that you or XYZ may terminate your employment at any time for any reason. “The circumstances surrounding your termination, however, may affect your entitlement to payment for unused vacation time. Employees who resign voluntarily by providing at least two weeks’ written notice of resignation may, at XYZ’s discretion, be paid up to a maximum of four weeks of unused, accrued vacation. “Employees who are involuntarily terminated may be paid for unused, accrued vacation, up to a maximum of four weeks at XYZ’s discretion. Under no circumstances will employees be paid for unused, accrued vacation if they are terminated for any of the following reasons: misuse or misappropriation of XYZ funds, theft of XYZ property or secrets, insubordination, fighting with other employees, unauthorized possession of firearms and/or other weapons while on XYZ’s premises or performing XYZ duties, reporting to work under the influence of intoxicants or illegal drugs, possession of illegal drugs either while on company time or premises, unexcused

absences or immoral acts on the job. This list is not exclusive, and XYZ reserves the right to refuse payment for unused vacation time for any reason.”

PoliCY CoNsiDeRAtioNs: When you have to terminate an employee for poor performance, it shouldn’t come as a surprise to either of you. Instead, you should have set policies that lay the groundwork for progressive discipline, which gives the person an opportunity to improve. Then, if termination is still necessary, you should handle it with honesty, fairness, discretion—and full documentation. Otherwise, if you never informed the employee of your company’s policies or poorly communicated the standards, you might be forced to overturn his termination or pay a large settlement.Thirty years ago, you could have fired an employee and thought no more of it. These days, it’s much harder to get rid of a problem employee. A lot of workers are suing for wrongful discharge or discrimination, and some are alleging that their firings violated an implied employment contract. The lesson in all this: You can still fire people, but you must play by the rules and follow an established discipline policy.

'At-Will' ReVisiteD Traditionally, people hired for an indefinite period were considered at-will employees. Unless they held an employment contract specifically stating otherwise, you could fire them for a good reason, a bad reason—or no reason at all. Over the years, though, courts have recognized exceptions to the at-will doctrine. Here are three big exceptions:

• Under federal law, it is illegal to terminate workers because of their age, race, religion, sex, national origin or a disability that does not influence their job performance.

• You cannot legally terminate an employee for reasons that might violate public policy. For instance, you can’t fire an engineer for informing the EPA that your company has been dumping toxic waste in the river.

• If you tell your workers that they will be fired for cause only—or otherwise establish rules that spell out how and when terminations will be handled—you might be creating an implied employment contract.

Employment at-will has been so deeply eroded by exceptions that you’d be wise not to fire a worker without a good reason—one that you can articulate clearly and document convincingly. Some employer’s state in their handbooks (and on job application forms) that employees are subject to termination without cause. Some ask their employees to acknowledge this clause by signing a form. There’s

continued on page 26

TERMINATIONS


TIER 4 FINAL REGS BRING SELECTIVE CATALYTIC REDUCTION TECHNOLOGY

SCR EVOLVES ENGINES

Selective catalytic reduction (SCR) technology is not new — it’s been proven in on-road trucking, agricultural and heavy equipment

applications for many years (most recently in full-sized wheel loaders and bulldozers). Many landscapers and compact equipment owners

will get their first taste of the technology as Case introduces the industry’s first skid steers with SCR at World of Concrete 2015. As

more equipment earns the Tier 4 Final designation, SCR will become more commonplace — even in equipment with a smaller footprint

where it was not previously seen as practical due to space limitations. Here are a few advantages made possible by the integration of

SCR into skid steers.

MAINTENANCE FREE

SCR technology can be maintenance free, depending on fueling practices and the style of SCR solution implemented in each machine

(SCR-only vs. SCR with diesel particulate filter (DPF)). Owners of SCR-only models who make it a point to top off their diesel exhaust

fluid (DEF) tank at the same time they fill up their fuel tank will find that there is no other applicable maintenance related to the Tier 4

Final system. This is compared to SCR systems with a DPF, and cooled exhaust gas recirculation (CEGR) systems with a DPF, where

sCR teCHNoloGY

sCR eVolVes eNGiNes Selective catalytic reduction (SCR) technology is not new — it’s been proven in on-road trucking, agricultural and heavy equipment applications for many years (most recently in full-sized wheel loaders and bulldozers). Many landscapers and compact equipment owners will get their first taste of the technology as Case introduces the industry’s first skid steers with SCR at World of Concrete 2015. As more equipment earns the Tier 4 Final designation, SCR will become more commonplace — even in equipment with a smaller footprint where it was not previously seen as practical due to space limitations. Here are a few advantages made possible by the integration of SCR into skid steers.

MAiNteNANCe FRee SCR technology can be maintenance free, depending on fueling practices and the style of SCR solution implemented in each machine (SCR-only vs. SCR with diesel particulate filter [DPF]). Owners of SCR-only models who make it a point to top off their diesel exhaust fluid (DEF) tank at the same time they fill up their fuel tank will find that there is no other applicable maintenance related to the Tier 4 Final system. This is compared to SCR systems with a DPF, and cooled exhaust gas recirculation (CEGR) systems with a DPF, where lifetime filter maintenance is required. This can be particularly beneficial to skid steer applications where there are often numerous operators running the machine throughout the day. Simplifying related maintenance activities through the design of the system helps reduce confusion among operators. If operators are trained from Day 1 to top off the DEF tank when they refuel, that’s the only Tier 4 Final-related maintenance they’ll need to know — and it takes no more time out of their day.

A PRoDuCtiVe AND eFFiCieNt use oF tHe eNGiNe SCR is an after-treatment solution that treats the diesel exhaust with DEF on its way out of the engine, turning that exhaust into nitrogen and water — which occur naturally in the atmosphere. This after treatment of the exhaust allows the engine to

breathe more freely and put all of its power towards working effort. This differs from systems that include a DPF, where power from the engine is used to burn off the accumulated particulate matter in the DPF — a non-productive activity. This also helps improve fuel efficiency, as the engine is only consuming as much diesel as is required to perform the primary functions of the machine vs. also consuming additional fuel to meet the needs of the DPF.

keePiNG it Cool Skid steer owners that operate in high-debris areas, paper mills or agricultural operations with combustible material, work to keep operating temperatures as low as possible. Systems with a DPF require elevated engine temperatures to burn off the accumulated particulate matter. Those elevated temperatures can be problematic when working in close quarters with combustible material. SCR helps keep those temperatures down. Another benefit of the lower operating temperatures is extended engine and component life. Heat leads to wear and degradation. By keeping the average engine temperature lower over the life of the machine, engine components and surrounding systems may experience less wear. Skid steers represent one of the final earthmoving frontiers for SCR technology. It is a different system than skid steer owners have grown accustomed to, but DEF is now widely available throughout North America and the hands-on maintenance of the system is minimal. Make topping off the DEF tank part of regular refueling practices — and the only thing the operator will notice is efficiency. Warren Anderson is a Brand Marketing Manager for Case Construction Equipment, based in Racine, WI.

Tier 4 Final Regs Bring seleCtiVe CAtAlYtiC

ReDuCtioN teCHNoloGY By Warren Anderson


DEALER Northeast

The Newsletter of NoRThEAsT EquipmENT DEALERs AssociATioN, iNc.JANUARY 2015 c Vol. 17, No. 190

www.ne-equip.com

NEDA Salutes our Supporting Advertisers. It is our pleasure to list the names of those advertisers who support NE Dealer each month. We trust their advertisement will

be remembered when goods and services are required by you, our dealer members. It is good to do business with companies who are interested in doing business with

you and your industry association.

John Komarisky of Main & Pinckney Equipment Inc., Auburn, NY

has been elected to a one-year term as President of NEDA. John was

installed recently at the association’s Board Meeting in Liverpool, NY.

John is General Manager and co-owner with his wife Barbara and

son Greg who is the dealerships Sales Manager. Main & Pinckney is a

very active and busy high volume single store operation. Their ma-

jor lines are New Holland AG, Vermeer Forage, Bush Hog, Brillion,

Simplicity & Ferris and other short lines. Their market includes the

small farm, rural lifestyle, homeowner, commercial landscape and

Municipal market segments. They have a lot of competition in their

trade area and their success for many decades is a result of their excel-

lent service reputation to this diverse customer mix. Their business continues to increase every year with a focus of out-

standing service and fair, timely and efficient service to their custom-

ers. Their best advertisement comes from customer referrals! John continues to be active in his church, community at large and the local fire district.

John will lead our eleven (11) member Board of Directors, that are responsible for oversee-

ing the associations budget, service and product offerings including the excellent insurance

benefit packages the association offers all its dealer members.

New Northeast Equipment Dealers Association President for 2015

IN THIS ISSUE:3 Observations from the Field4, 6, 8 Association News9 Flat Rate Guide - NEDA10 Speakers at Annual / Regional Meetings11 TwoGreySuits – HR Policies12-13 Industry News14 Accomplishing Results16 90% of Sales Success Is . . .18 Risk Management Strategies

19 EPA Requirements20-21 Tax Tips22 Designing an Internship Program23 Network Date Security Info24 Human Resources25 Construction Equipment Guide - NEDA26-27 Equipment Industry News

ADVERTISER’S:2 Haylor, Freyer & Coon 5 New York Farm Show7 Electronic Merchant Systems15 DiversifiedFinancial17 BallastStar

17 Charter Software29 Federated Insurance30 Fastline Publications

wha

t’s

new

?

DEALER Northeast

The Newsletter of NoRThEAsT EquipmENT DEALERs AssociATioN, iNc.

FEBRUARY 2015 c Vol. 17, No. 191

www.ne-equip.com

NEDA Salutes our Supporting Advertisers. It is our pleasure to list the names of those advertisers who support NE Dealer each month. We trust their advertisement will

be remembered when goods and services are required by you, our dealer members. It is good to do business with companies who are interested in doing business with

you and your industry association.

Happy New Year...Here are a few reasons for lifestyle equipment dealer optimism in 2015.

The U.S. economy is improving and many people have disposable money to spend because of the

stronger job market and lower gas prices.

Interest rates are expected to remain low and consumer sentiments the highest it has been since

January 2007. OPE Manufacturers and most other OPE Industry leaders are saying that they are very

optimistic for about a 4% increase in sales growth for 2015.

The International October 2014 GIE-EXPO in Louisville,

KY for the OPE Industry was a real winner and drew about

11% more OPE dealers than the previous year. Tim Wentz

and Ralph Gaiss were there from our association manning a

shared booth with our partner the Ohio-Michigan Equipment

Dealers Association. Ralph said he and Tim saw and spoke

with more member dealers than in previous years.

They also spoke with many non-member dealers that stopped

at the booth and they did get three new member dealers to

join the association during the show and when they returned,

they received calls from other dealers that had an interest to

join. If you never attended this fantastic show for dealers only,

don't miss this opportunity on October 21, 22, 23, & 24, 2015

and mark it on your calendar now...so you don't forget it.

IN THIS ISSUE:3 Observations from the Field

4 Annual / Regional Meeting Speakers

6, 8, 10, 12 Industry News

7 Annual / Regional Meeting Sponsors

9 NEDA February Light Specials

11 TwoGreySuits – HR Policies

14 Accomplishing Results

15 Grounds Maintenance Equip. Blue Book

16 OSHA Updates to Recordkeeping Rule

18 Risk Management Strategies

20, 22 Veterans' Information

23 Health Care Information

25 The Family Board in a Family-Owned

Business

26 NEDA Holiday Schedule

27 Equipment Industry News

28 Marijuana in the Workplace

ADVERTISER’S:2 Haylor, Freyer & Coon

5 New York Farm Show

13 BallastStar

13 Charter Software

17 Electronic Merchant Systems

17 PartnerShip

21 SouthWestern Assoc. – Valuations

29 Federated Insurance

30 Fastline Publications

opE Dealer council The OPE Voice of NEDA

COUNCIL MEMBERS

Dale Magie, Chairman, Liberty Twp., OH

Dale Fronheiser, Bechtelsville, PA

Dan Huff, Pomfret Center, CT

OPERATING STAFF

Kim Rominger Bill Garling

Dennis Alford Dave Close

Ralph Gaiss Tim Wentz

Scott Grigor

NEDA ... Northeast Equipment Dealer Association

(CT, MA, ME, NH, NJ, NY, PA, RI, VT)

IS something newsworthy happening or HAS it happened with you, an employee or your dealership?LET US KNOW! Email us a brief note or send us a newspaper clipping (or link) to your local newspaper. A few minutes is all it takes. We welcome digital submissions, just be sure to include your company name, address, phone/fax, email and web info as well as identification of anyone included in a photo.

WHAT’S NEWSWORTHY?anniversaries • awards of special recognition • expansion or remodeling • open houses • receptions • personnel changes • promotions • retirements • in memoriams • new programs, standards or services • anything else you think we’d be interested in publicizing.

EMAIL [email protected] by the 20th of the month forinclusion in the next month’s newsletter.

NortheastEquipmentDealersAssociationEstablished 1901

Committed to Building The Best BusinessEnvironment for Northeast Equipment Dealers

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TAX TIPS

IRS Makes it Easier for Small Businesses to Apply Repair Regulations to 2014 and Future Years WASHINGTON —The Internal Revenue Service made it easier for small business owners to comply with the final tangible property regulations. Requested by many small businesses and tax pro-fessionals, the simplified procedure is available be-ginning with the 2014 return taxpayers are filling out this tax season. The new procedure allows small busi-nesses to change a method of accounting under the final tangible property regulations on a prospective basis for the first taxable year beginning on or after Jan. 1, 2014. Also, the IRS is waiving the requirement to com-plete and file a Form 3115 for small business taxpay-ers that choose to use this simplified procedure for 2014. “We are pleased to be able to offer this relief to small business owners and their tax preparers in time for them to take advantage of it on their 2014 return,” said IRS Commissioner John Koskinen. “We carefully reviewed the comments we received and es-pecially appreciate the valuable feedback provided by the professional tax community on this issue.” The new simplified procedure is generally avail-able to small businesses, including sole proprietors, with assets totaling less than $10 million or average annual gross receipts totaling $10 million or less. De-tails are in Revenue Procedure 2015-20, posted today on IRS.gov.The revenue procedure also requests comment on whether the $500 safe-harbor threshold should be raised for businesses that choose to deduct, rather than capitalize, certain capital expenses.

When filing your 2014 federal income tax return, you will see some changes related to the Affordable Care Act. Millions of people who purchased their coverage through a health insurance Marketplace are eligible

for premium assistance through the new premium tax credit, which individuals chose to either have paid up-front to their insurers to lower their monthly premi-ums, or receive when they file their taxes. When you bought your insurance, if you chose to have advance payments of the premium tax credit, the Marketplace estimated the amount based on information you pro-vided about your expected household income and family size for the year. If you received the benefit of advance credit pay-ments, you must file a federal tax return and reconcile the advance credit payments with the actual premium tax credit you are eligible to claim on your return. You will use IRS Form 8962, Premium Tax Credit (PTC) to make this comparison and to claim the credit. If your advance credit payments are in excess of the amount of the premium tax credit you are eligible for, based on your actual income, you must repay some or all of the excess when you file your return, subject to cer-tain caps. If you purchased your coverage through the Health Insurance Marketplace, you should receive Form 1095-A, Health Insurance Marketplace State-ment from your Marketplace. You should receive this form by early February. Form 1095-A will provide the information you need to file your taxes, including the name of your insurance company, dates of coverage, amount of monthly insurance premiums for the plan you and other members of your family enrolled in, amount of any advance payments of the premium tax cred-it for the year, and other information needed to compute the premium tax credit. Using tax preparation software is the best and simplest way to file a complete and accurate tax return as it guides individuals and tax preparers through the process and does all the math. Electronic filing options include IRS Free File for taxpayers who qual-ify, free volunteer assistance, commercial software, and professional assistance. For more information about the Affordable Care Act and filing your 2014 income tax return, visit IRS.gov/aca.

Premium Tax Credit Brings Changes to Your 2014 Income Tax Returns



a trade-off here: Signing that type of statement won’t endear you to your workers. A policy of firing for “just cause only” is more likely to build loyalty, but it might subject you to judicial review.

PoliCY GuiDeliNes • Document every time you warn an employee

that her performance will have to improve. Make references to her job description and the standards set forth in her performance reviews. Do make it clear, however, that the tasks in the job description are subject to change depending on the organization’s needs and that you may ask the employee to do various other jobs.

• use the progressive discipline approach.• Watch what you promise. Avoid any

suggestion when hiring, for example, that so long as the person is productive, “the job is yours for life.” Such comments are considered “implied contracts” by some courts, and they can severely restrict your right to fire.

• Play by the rules. Follow your discipline policy to the letter in every situation with every employee. If your employee handbook says you’ll provide a verbal warning, a written

reprimand and a probationary period, and then make sure you do so.

Of course, your handbook should also give you the right to fire someone immediately if he engages in serious misconduct. After all, you should not have to give an employee 30 days to prove that he will stop embezzling the company’s funds.

• keep quiet. Don’t discuss your reasons for the termination with other employees. You could end up getting sued for defamation of character.

• Don’t force an employee to resign. That’s called constructive discharge, and courts take a dim view, to varying degrees, of personnel practices such as these: improper demotion, coercion into early retirement or failure to transfer, discriminatory pay, and harassment based on sex, age, race or disability.

oBseRVAtioN An eye-opening study by Ohio State University found that workers who are fired or laid off without an explanation are 10 times more likely to sue than are those who are given concrete reasons for the termination.

~ HR Solutions

SAMPLE POLICY

TERMINATIONS

CheCklist: seven

Questions

to Ask

Before

You

terminate

Before firing anyone, ask yourself the following seven questions. If you answer “Yes” to any, your risk of sparking a lawsuit rises, so consider contacting your employment law attorney before proceeding with a termination. 1. Is the employee over age 40? YES NO

2. Is the employee disabled in any way? YES NO

3. Has the employee been injured on the job or filed a workers’ comp claim? YES NO

4. Is the employee a minority or a woman with any conceivable discrimination claim? YES NO

5. Is the employee able to claim any discrimination based on religion, national origin, ethnicity, sexual preference or other grounds? YES NO

6. Has the employee filed a discrimination or harassment lawsuit? YES NO

7. Has the worker been a whistle-blower? YES NO


CREDIT CARD PROGRAMEMS (ELECTRONIC MERCHANT SYSTEMS)Steven Miller866-367-1818, Direct 585-285-9954Fax [email protected]

DIVERSIFIED FINANCIALYour Financing ChoiceTerry Boer at 800-648-8026 [email protected]

FEDERATED INSURANCE COMPANYProperty & Casualty Insurance (8 states except VT), Health Insurance (PA only)Workers' Comp (All states except NY)John Ballard at 800-241-4945, Cell 859-312-9896Fax [email protected] • www.federatedinsurance.com

HAYLOR, FREYER & COON, INC.Health Insurance Program Mike Herrera Benefit Consultant315-703-3216 • [email protected] Jim McGarvey Supervisor Benefit Consulting 315 703 3239 • [email protected]

Physical Damage Insurance,Rental / Leasing EquipmentDarwin Allen at 800-289-1503 (HF&C, Inc.)[email protected] • www.haylor.com

Workers' Comp (Return Dividend Program for NY Dealers only)Property & Casualty Insurance for VT Darwin Allen at [email protected] • www.haylor.com

LEGAL ASSISTANCE – FREE LIMITED Dave Shay at 816-421-4460Fax: 816-474-3447 • [email protected]

NEDA ON-LINE CAMPUSDave Close at 800-932-0607 x [email protected]

PARTNERSHIP Freight ProgramYellow Freight, UPS Freight, FedEx GroundKeith Korhely at 800-599-2902 x [email protected]

POWER PRO ACCREDITED DEALERJoe Dykes at [email protected]

REGULATORY CONSULTANTS, INC.CERTIFIED SPCC PLANDave Close at 800-932-0607 x 235Robb Roesch at 800-888-9596 x 222www.rci-safety.com

SUCCESSION PLANNING - Buy / SellPlanning Solutions GroupDon HannahsPhone: 301-543-6000888-740-3501 – Fax: 301-543-6030Dhannahs@PSG planning.com

TELEPHONE DISCOUNT PROGRAMWorldNet Solutions, Inc.866-532-7653 Mention NAEDA

Ralph Gaiss, Executive VP/CEO800-932-0607 x [email protected]

Dave Close, Operations Manager800-932-0607 x [email protected]

Kelli Neider, Administrative Assistant800-932-0607 x [email protected] (Business Forms)

Tim Wentz, Field Services DirectorCell: 717-576-6794, Phone: 717-258-1450Fax: [email protected]

Scott Grigor, NY Farm Show Manager800-932-0607, Ext. [email protected]

Art Smith, Consultant/Editor, NE Dealer717-258-8476, Fax: [email protected]

CHARTER SOFTWARE BUSINESS SYSTEMSMelissa Amen303-932-6875 - Ext. 219www.chartersoftware.com

CERTIFIED BUSINESS VALUATIONSSWA Financial Consulting, P.C.Curtis A. Kleoppel / Bob Charbonneau816-561-5323 x 116 & 117Fax: 816-561-1249 or 800-762-5616

For Service / SPoNSoreD ProGrAMS,cAll Your ASSociAtioN

800-932-0607 • 315-457-0314 • Fax: 315-451-3548 • www.ne-equip.com

Small Family Farms Operate 48% of U.S. Farmland, Account for 22% of Ag Production In 2013, 98% of U.S. farms were family farms, where the principal operator and his or her relatives owned the majority of the business. Two features of family farms stand out. First, there are many small family farms — those reporting less than $350,000 in gross cash farm income (GCFI) — and they account for 89% of all U.S. farms and operate 48% of U.S. farm-land. Second, while most production — 65% — occurs on the 9% of farms classified as midsize/large-scale family farms, small farms’ 22% share of production is larger than that of midsize farms alone (20%) or nonfamily farms (12%). This chart updates one found in Structure and Finances of U.S. Farms: Family Farm Report, 2014 Edition, EIB-132, December 2014. See more at: http://www.farm-equipment.com/pages/Industry-News---Small-Family-Farms-Operate-48--of-US-Farmland,-Account-for-22-of-US-Agricul-tural-Production.php#sthash.0n3dwxGd.dpuf

~ Lessiter Publications and Farm Equipment


February 15, 2015Vol. 21, Issue 2

• Kubota NA Sales Up

• CNHI Lowers Outlook

• Sales Normalize in ‘14

A year ago at this time, Ag Equipment Intelligence report-ed that commercial bank lending for non-real estate farm loans dipped in the fourth quarter, driven in large part by a decline in farm capital spending. At that time, the Federal Reserve Bank of Kansas City reported the volume of loans for farm machinery and equipment purchases had dropped to its lowest level in more than 2 years.

According to the most recent edition of the Agricultural Finance Databook from the Kansas City Fed (Jan. 28), which was authored by Nathan Kauffman and Maria Akers, farm lending at commercial banks remained well above year-ago levels and bank profits edged higher. Commercial bank call report data showed farm debt outstanding at commercial banks was 6.7% higher than the previous year, as of Sept. 30.

Loan growth was driven by a 6.9% annual increase in the volume of loans secured by farm real estate and a 6.6% annual increase in the volume of loans to finance agricul-tural production. Increased lending pushed loan-to-deposit ratios at agricultural banks to their highest levels since 2010.

“In 2014, a large U.S. corn and soybean harvest placed

downward pressure on prices and limited cash receipts for fall crop sales,” the report authors said. “With produc-tion expenses holding at high levels, reduced farm income

Commercial Loans for Farm Machinery Continue to Decline

The contents of this report represent our interpretation and analysis of information generally available to the public or released by responsible individuals in the subject companies, but is not guaranteed as to accuracy or completeness. It does not contain material provided to us in confidence by our clients.

Individual companies reported on and analyzed by Lessiter Publications Inc., may be clients of this and other Lessiter Publications Inc. services. This information is not furnished in connection with a sale or offer to sell securities or in connection with the solicitation of an offer to buy securities.

Despite reporting a decrease in net sales of $2.5 billion for the fourth quarter of 2014, a drop of 13% compared to 2013’s $2.9 billion, and forecasting continued softness in the market for ag machinery in 2015, analysts expected worse. As a result, AGCO shares surged for more than a week following its earnings report.

Analysts apparently liked the fact that the company got out ahead of the downward trend in sales by reducing costs and inven-tory. “Despite softening market demand in the fourth quarter, we made solid progress with both inventory reduction and our expense savings program,” Martin

Richenhagen, AGCO’s chairman, president and CEO, said. “By low-ering production approximately 20% compared to the fourth quar-ter of 2013, inventories ended the year well below Dec. 31, 2013 levels.” Full year production is expected to be 7-10% lower com-pared with 2014.

“We also took steps to adjust our cost structure in response to lower demand and production levels. Our restructuring plan to signifi-cantly reduce SG&A and manufac-turing support costs is on track to achieve our 2015 targets. Through a combination of layoffs, tempo-rary furloughs and the dismissal

AGCO’s Cost Reduction Softens Fall Off in Sales

Continued on page 3

50

45

40

35

30

252009:Q1 2010:Q1 2011:Q1 2012:Q1 2013:Q1 2014:Q1

Operating Farm Loan Volume (billion dollars, four-quarter moving average)

The total volume of non-real estate farm loans rose significantly com-pared with the same period in 2013. Most of the gains were driven by increased borrowing for current operating expenses.

Source: Agricultural Finance Databook

Continued on page 2

AGCO Production Hrs. 2014 vs. 2015

AGCO’s 2014 full year production was reduced by 15% compared with 2013. The company expects to decrease production by 15-20% in the first quarter of 2015 vs. the first quarter of 2014. Full year produc-tion is forecast to be reduced by 7-10%.

Source: Company reports

commercial Loans for Farm machinery continue to Decline A year ago at this time, Ag Equipment Intelligence reported that commercial bank lending for non-real estate farm loans dipped in the fourth quarter, driven in large part by a decline in farm capital spending. At that time, the Federal Reserve Bank of Kansas City reported the volume of loans for farm machinery and equipment purchases had dropped to its lowest level in more than two years.

~ A.E.I.

Ag Equipment sales continue to struggle Conditions continue to be challenging for large ag equipment sales, as highlighted by the latest sales report released by the Assn. of Equipment Manufacturers. Total tractor and combine sales for January were up 3.1% year-over-year vs. down 4.1% in December. C. Schon Williams, analyst with BB&T Capital Markets, says inventories have continued to build amid ongoing weakness in ag equipment demand. Williams maintains a negative outlook “as sales continue to disappoint and the latest WASDE report points to continued pressure on farm cash receipts in the near term.” U.S. combine sales declined 47.1% year-over-year in January, which marks the fourth consecutive month with declines that exceeded 40%. Canadian combine sales fared even worse, with a 77.6% decrease year-over-year.

~ A.E.I.

equiPMeNt iNDustRY NeWs

55% of Farm Loans FinancedWith New Debt On average, lenders in the Eighth Federal Reserve District reported that 55% of the value of recent farmland transactions was financed with new debt, 30% supported by a pledge of existing equity and 15% paid in cash, according to latest Agricultural Finance Monitor published by the Federal Reserve Bank of St. Louis on Feb. 12. The Federal Reserve Bank of St. Louis surveyed 39 ag banks in all or parts of 7 Midwest and Midsouth States to assess underwriting practices and loan portfolio exposure to a sizable decline in farmland values. More than 80% of lenders reported that their portfolios contained less than 50% of real estate loans made to borrowers who are most exposed to an unexpected plunge in farmland prices. “Overall these responses, in aggregate, suggest that the credit underwriting of recent farmland secured transactions remains sound and less than half of farm real estate loans are held by more exposed or highly leveraged borrowers,” the report said.

~ A.E.I.

Ag Equipment Intelligence/February/2015 7

Conditions continue to be challeng-ing for large ag equipment sales, as highlighted by the latest sales report released by the Assn. of Equipment Manufacturers.

Total tractor and combine sales for January were up 3.1% year-over-year vs. down 4.1% in December. C. Schon Williams, analyst with BB&T Capital Markets, says inventories have contin-ued to build amid ongoing weakness in ag equipment demand. Williams maintains a negative outlook “as sales continue to disappoint and the latest WASDE report points to continued pressure on farm cash receipts in the near term.”

U.S. combine sales declined 47.1% year-over-year in January, which marks the fourth consecutive month with declines that exceeded 40%. Canadian combine sales fared even worse, with a 77.6% decrease year-over-year.

For high horsepower tractors, sales continued to drop while inventories continued to build. U.S. demand for row-crop tractors fell again in January, but did improve from December (-5.6% vs. -22.4% in December). Canadian sales had similar results with a 4% decrease. “High horsepower trac-tors have now posted 6 consecutive months of year-over-year declines, however we note that January’s sales drop was a noticeable improvement from 3 straight months of more than 20% decline during the fourth quarter of 2014,” Williams says.

Total tractor inventories posted a 5.4% increase over January of 2014.

On a positive note, U.S. 2WD trac-tors sales increased 9.6% year-over-year in January vs. 0.7% in December on the strength of rising sales of com-pact tractors (+18.4%) and mid-range tractors (+12.1%).

Overall, tractors under 100 horse-power saw a 15.4% increase for the month in the U.S. In Canada, this same category struggled in January, posting a 13.2% year-over-year drop in sales, as compact tractor sales fell by 15%, mid-range equipment declined by 17.3% and high horsepower units slipped by 4% on a year-over-year basis.

Ag Equipment Sales Continue to Struggle

JANUARY U.S. UNIT RETAIL SALES

Equipment January 2015

January 2014

Percent Change

YTD 20 15

YTD 2014

Percent Change

December 2014 Field Inventory

Farm Wheel Tractors-2WD

Under 40 HP 4,755 4,027 18.4 4,7555 4,0017 18.4 62,927

40-100 HP 4,086 3,644 12.1 4,086 3,644 12.1 31,985

100 HP Plus 2,767 2,931 -5.6 2,767 2,931 -5.6 12,304

Total-2WD 11,608 10,592 9.6 11,608 10,592 9.6 107,216

Total-4WD 192 540 -64.4 192 540 -64.4 1,075

Total Tractors 11,800 11,132 6.0 11,800 11,132 6.0 108,291

SP Combines 346 654 -47.1 346 654 -47.1 1,195

JANUARY CANADIAN UNIT RETAIL SALES

Equipment January 2015

January 2015

Percent Change

YTD 2015

YTD 2014

Percent Change

December 2014 Field Inventory

Farm Wheel Tractors-2WD

Under 40 HP 627 738 -15.0 627 738 -15.0 6,949

40-100 HP 420 508 -17.3 420 508 -17.3 3,565

100 HP Plus 357 372 -4.0 357 372 -4.0 2,334

Total-2WD 1,404 1,618 -13.2 1,404 1,618 -13.2 12,848

Total-4WD 28 91 -69.2 28 91 -69.2 351

Total Tractors 1,432 1,709 -16.2 1,432 1,709 -16.2 13,199

SP Combines 38 170 -77.6 38 170 -77.6 479

— Assn. of Equipment Manufacturers

U.S. UNIT RETAIL SALES OF2-4 WHEEL DRIVE TRACTORS & COMBINES

JAN FEB MAR APR MAY JUN JUL AUG SEP OCT NOV DEC

30,000

28,000

26,000

24,000

22,000

20,000

18,000

16,000

14,000

12,000

10,000

8,000

6,000

2015 5 year average

2 Ag Equipment Intelligence/February/2015

increased the need for financing to pay for next year’s crop inputs. Despite a slight rebound in crop prices from the October low, corn and soybean prices have remained significantly below those of recent years.”

Equipment Loans Drop. As short-term borrowing in the farm sector ramped up, intermediate-term loan vol-umes for farm equipment purchases fell further. “Demand for farm equipment weakened as prospects of a record crop, and lower prices, appeared more certain heading into harvest,” said Kaufman and Akers.

The Assn. of Equipment Manufacturers reported that while 2014 combine and 4WD tractor sales in the U.S. began on par with 2013 levels, they slowed steadily and ended the year down 26%.

“Tighter profit margins for crop producers drove increased lending to the agricultural sector for production loans but trimmed farm capital spending and demand for equipment loans,” said the report authors. “Agricultural bankers reported sufficient funds were available to satisfy a rise in loan demand but also noted some deterioration in loan repayment rates and indicated collateral requirements had tightened slightly. After narrowing in 2014, the direc-tion of farm sector profit margins in 2015 will be a key fac-tor in determining whether agricultural credit conditions improve or worsen in the coming year.”

Cropland Values Slip. The report goes on to point out that reduced profitability in the crop sector has been accompanied by a slowdown in cropland price apprecia-tion and, in some cases, a slight reduction in values, par-ticularly in the Corn Belt. Agricultural bankers reported that non-irrigated cropland values edged down from recent peaks in several states while year-over-year value gains have moderated in others. “Ranchland values, however, con-tinued to rise with strong demand for high-quality pasture.

While the majority of Federal Reserve survey respondents expected cropland values would stabilize, some antici-pated additional declines in 2015.”

(How farm lending practices have changed since the 1980s, p. 8 in this issue of Ag Equipment Intelligence)

AG EQUIPMENT INTELLIGENCE is published monthly for the farm equipment industry by Lessiter Publications Inc., 225 Regency Ct., Suite 100, Brookfield, WI 53008-0624. © 2015 by Lessiter Publications Inc. All rights reserved. Reproduction in any form of this newsletter content is strictly forbidden without the prior written consent of the publisher. Please send any address

changes as soon as possible to the address shown above. U.S., Canada and Mexico print subscriptions are $499 per year. International print subscriptions are $599 per year. Send sub-scription orders to: Ag Equipment Intelligence, P.O. Box 624, Brookfield, WI 53008-0624. Fax: 262/786-5564. Phone: 262/782-4480 or 866/839-8455 (U.S. only). E-mail: [email protected].

Commercial Loans for Farm Machinery Continue to Decline...Continued from page 1

U.S Farmland Avg. Sale Prices Per Acre Jan. 2015 vs. Jan. 2014 — Selected States

State Jan. 2014 Jan. 2015 % Change

Arkansas $5,000 $5,000 0%

Illinois $12,500 $12,000 −4%

Indiana $10,250 $9,950 −2.9%

Iowa $12,000 $11,000 −8.3%

Kansas $4,500 $4,000 −11.1%

Kentucky* $4,200 $4,000 −4.8%

Michigan* $6,800 $6,600 −2.9%

Minnesota* $10,000 $9,200 −8%

Mississippi** $4,500 $5,000 +11.1%

Missouri* $6,400 $6,275 −2%

Nebraska** $12,000 $11,500 −4.2%

North Dakota $8,000 $7,200 −10%

Ohio $8,000 $7,750 −3.1%

South Dakota $9,000 $8,100 −10%

Tennessee $3,600 $3,750 +4.2%

Texas $3,500 $3,500 0%

Washington $7,850 $10,000 +27.4%

*non-irrigated; **irrigated

Source: Famers National Company Agent Survey

8

7

6

5

4

3

2

1

02000 2002 2004 2006 2008 2010 2012 2014

Farm Equipment Loan Volumes — 2000-14(billions of dollars)

As short-term borrowing in the farm sector ramped up, intermediate-term loan volumes for farm equipment purchases fell further. Demand for farm equipment weakened as record crops led to lower prices.


70

60

50

40

30

20

10

02008 2009 2010 2011 2012 2013 2014

Crop Cash ReceiptsManufactured Inputs, Seeds and Rent

U.S. Crop Cash Receipts & Input Costs(percent change from 2007 levels)

The large 2014 corn and soybean harvest placed downward pressure on prices and limited cash receipts, while high production expenses increased the need for loans to pay for next year’s crop inputs.

Source: USDA


increased the need for financing to pay for next year’s crop inputs. Despite a slight rebound in crop prices from the October low, corn and soybean prices have remained significantly below those of recent years.”

Equipment Loans Drop. As short-term borrowing in the farm sector ramped up, intermediate-term loan vol-umes for farm equipment purchases fell further. “Demand for farm equipment weakened as prospects of a record crop, and lower prices, appeared more certain heading into harvest,” said Kaufman and Akers.

The Assn. of Equipment Manufacturers reported that while 2014 combine and 4WD tractor sales in the U.S. began on par with 2013 levels, they slowed steadily and ended the year down 26%.

“Tighter profit margins for crop producers drove increased lending to the agricultural sector for production loans but trimmed farm capital spending and demand for equipment loans,” said the report authors. “Agricultural bankers reported sufficient funds were available to satisfy a rise in loan demand but also noted some deterioration in loan repayment rates and indicated collateral requirements had tightened slightly. After narrowing in 2014, the direc-tion of farm sector profit margins in 2015 will be a key fac-tor in determining whether agricultural credit conditions improve or worsen in the coming year.”

Cropland Values Slip. The report goes on to point out that reduced profitability in the crop sector has been accompanied by a slowdown in cropland price apprecia-tion and, in some cases, a slight reduction in values, par-ticularly in the Corn Belt. Agricultural bankers reported that non-irrigated cropland values edged down from recent peaks in several states while year-over-year value gains have moderated in others. “Ranchland values, however, con-tinued to rise with strong demand for high-quality pasture.

While the majority of Federal Reserve survey respondents expected cropland values would stabilize, some antici-pated additional declines in 2015.”

(How farm lending practices have changed since the 1980s, p. 8 in this issue of Ag Equipment Intelligence)

AG EQUIPMENT INTELLIGENCE is published monthly for the farm equipment industry by Lessiter Publications Inc., 225 Regency Ct., Suite 100, Brookfield, WI 53008-0624. © 2015 by Lessiter Publications Inc. All rights reserved. Reproduction in any form of this newsletter content is strictly forbidden without the prior written consent of the publisher. Please send any address

changes as soon as possible to the address shown above. U.S., Canada and Mexico print subscriptions are $499 per year. International print subscriptions are $599 per year. Send sub-scription orders to: Ag Equipment Intelligence, P.O. Box 624, Brookfield, WI 53008-0624. Fax: 262/786-5564. Phone: 262/782-4480 or 866/839-8455 (U.S. only). E-mail: [email protected].

Commercial Loans for Farm Machinery Continue to Decline...Continued from page 1

U.S Farmland Avg. Sale Prices Per Acre Jan. 2015 vs. Jan. 2014 — Selected States

State Jan. 2014 Jan. 2015 % Change

Arkansas $5,000 $5,000 0%

Illinois $12,500 $12,000 −4%

Indiana $10,250 $9,950 −2.9%

Iowa $12,000 $11,000 −8.3%

Kansas $4,500 $4,000 −11.1%

Kentucky* $4,200 $4,000 −4.8%

Michigan* $6,800 $6,600 −2.9%

Minnesota* $10,000 $9,200 −8%

Mississippi** $4,500 $5,000 +11.1%

Missouri* $6,400 $6,275 −2%

Nebraska** $12,000 $11,500 −4.2%

North Dakota $8,000 $7,200 −10%

Ohio $8,000 $7,750 −3.1%

South Dakota $9,000 $8,100 −10%

Tennessee $3,600 $3,750 +4.2%

Texas $3,500 $3,500 0%

Washington $7,850 $10,000 +27.4%

*non-irrigated; **irrigated

Source: Famers National Company Agent Survey

8

7

6

5

4

3

2

1

02000 2002 2004 2006 2008 2010 2012 2014

Farm Equipment Loan Volumes — 2000-14(billions of dollars)

As short-term borrowing in the farm sector ramped up, intermediate-term loan volumes for farm equipment purchases fell further. Demand for farm equipment weakened as record crops led to lower prices.


70

60

50

40

30

20

10

02008 2009 2010 2011 2012 2013 2014

Crop Cash ReceiptsManufactured Inputs, Seeds and Rent

U.S. Crop Cash Receipts & Input Costs(percent change from 2007 levels)

The large 2014 corn and soybean harvest placed downward pressure on prices and limited cash receipts, while high production expenses increased the need for loans to pay for next year’s crop inputs.

Source: USDA



u.s. Tractor sales ‘Normalized’ in 2014

A little over a year ago, Jim Tibbles, executive vice president of Osmundson Mfg., a manufacturer of tillage tools in Perry, Iowa, told us that he believed softening ag equipment sales in 2014 would represent a return to normal levels rather than a falloff. “We talk about a softening in farm equipment, but what it’s really doing is ‘normalizing,’” Tibbles says. “With high commodity prices and depreciation rules, it was crazy for American farmers to not invest in their machinery in recent years. Commodity prices are going to normalize; it will be somewhere between the $4 corn we’re at now and the $7 peak.”

~ A.E.I.


cattle producer Returns Bolstered by higher price, Lower Feed costs Despite weaker demand, beef prices are at record high levels due to tight supplies and historically low cattle inventories. Expanding the cattle herd is a long-term process due to the time it takes cattle to mature. It also requires holding some heifers off market for breed¬ing purposes. Recently released data from USDA’s Cattle report suggests that inventories are beginning to grow and cattle prices have begun to retreat. With corn prices forecast by USDA to average around $3.50 per bushel for the 2014-15 marketing year, returns to cow-calf operators should remain favorable into 2015.

~ A.E.I.


A little over a year ago, Jim Tibbles, execut ive v ice pres ident o f Osmundson Mfg., a manufacturer of tillage tools in Perry, Iowa, told us that he believed softening ag equipment sales in 2014 would represent a return to normal levels rather than a falloff.

“We talk about a softening in farm equipment, but what it’s really doing is ‘normalizing,’” Tibbles says. “With high commodity prices and deprecia-tion rules, it was crazy for American farmers to not invest in their machin-ery in recent years. Commodity pric-es are going to normalize; it will be somewhere between the $4 corn we’re at now and the $7 peak.”

Looking back, it would appear that Tibbles was right on the money. At the same time, compared with farm machinery sales the past few years, it’s easy to see why most industry observers would view 2014 sales lev-els as a significant dropoff.

T h e A s s n . o f E q u i p m e n t Manufacturer’s North American unit sales for each tractor category, as well as for combines, show that 2014 sales were as good as or better than their 5 and 10 year averages.

Compared to the 10 year aver-age, 2014 sales of compact tractors (<40 horsepower) were up by 7.4% and up by 23.6% when compared with the 10 and 5 year average sales, respectively. Mid-range tractor (40-100 horsepower) sales in 2014 were down 1.6% vs. the 10 year average, but up 14.7% compared with the 5

year average.High horsepower tractors (100

horsepower plus) were up 29.6% last year vs. the 10 year average and up 11.8% compared to the 5 year average. For 4WD tractors, unit sales in 2014 were up 6.7% vs. the 10 year average, but down 14.6% compared to the 5 year average sales.

Combine sales is where the dropoff was most evident. Unit sales of com-bines in 2014 were down about 5.5% compared with the 10 year average and down 21% vs. the 5 year average.

In a note to Ag Equipment Intelligence, one large Canadian dealer may have summed up last year’s sales levels best: “While crop prices are affecting sentiment at the farm, we have had a pretty good year overall. It is easy to forget how good the past few years have been going when we compare to the last year. We should remember that we have had double-digit growth for the past 5 years, so flattening out, or some decrease in sales, should not be unexpected.”

Continuing solid sales of farm equip-ment and industrial machinery in North America and Europe, together with the effect of a depreciating yen produced strong results for Kubota Corp. in its recent third quarter and 9 months ended Dec. 31, 2014.

On Feb. 6, the company reported a 5.4% increase in revenue to $9.6 billion for the 9 months of its current fiscal year vs. the same period a year ago. Operating income was up 3.2% and net income increased by 3.2%.

Despite a dropoff of 23.4% in

domestic sales, overall revenues from its Farm Equipment & Engine opera-tions rose during the period by 3.6% on the strength of Kubota’s overseas business, which increased by 13.7%.

When consolidated with its Construction Machinery segment, the company’s Farm & Industrial Machinery business was up by 5.7% for the 9-month period as overseas revenues grew by 15.4%.

During the quarter ended Dec. 31, 2014, Kubota’s total revenues were up by 12%, operating income

increased by 10.8% and net income rose by 23.4%. The company’s over-seas farm equipment business was key during the third quarter as well, increasing by 26.4% while domestic for the segment fell by 27.3%.

2015 Outlook. Kubota is project-ing consolidated revenues for the full year ended March 31, 2015, to reach $12.7 billion.

Domestic revenues are forecast to decrease due to the anticipated adverse reaction to the front-load-

Strong U.S., European Sales Keeps Kubota in the Black

0

12,500

25,000

37,500

50,000

62,500

75,000

87,500

100,000

112,500

125,000

2014

10 year avg.

5 year avg.

<40 HP Tractors

All 4-WD TractorsCombines

>100 HP Tractors

40-100 HP Tractors

7,43

4

5,94

7

6,34

6

10,2

63

10,8

58

12,9

69

33,9

42

37,9

43

29,2

66

68,5

19

69,6

63

58,3

86

100,

039

1115

,033

123,

610

2014 North American Unit Sales Tractors & Combines vs. 5 & 10 Year Averages

Compared with the 5 and 10 year average unit sales for each category of tractor and com-bines, 2014 turned out to be a pretty average year for sales.

Source: Assn. of Equipment Manufacturers

U.S. Tractor Sales ‘Normalized’ in 2014

Continued on page 5

Ag Equipment Intelligence/February/2015 5

ed demand in Farm & Industrial Machinery, whi le revenues in the company’s Water & Environment seg-ment are expected to increase.

O v e r s e a s r e v e -nues are forecast to increase due to higher revenues in Farm & Industrial Machinery, as well as in Water & Environment.

Overseas revenues in Farm & Industrial Machinery are expect-ed to increase mainly in North America and Europe. Net income attributable to Kubota Corp. is forecast to be $1.1 billion.

Kubota Corp. Selected Financial Data — 3Q & 9 Months 20153 mos. ended

Dec. 31 Change %

9 mos. ended Dec. 31 Change

%

Full-Year Outlook March

31, 20152014 2013 2014 2013

Revenues $3,369 $3,008 12.0 $9,650 $9,154 5.4 $12,718

Operating Income $414 $374 10.8 $1,259 $1,219 3.2 $1,707

Net Income $298 $241 23.4 $855 $809 3.2 $1,110

Farm & Industrial Machinery Segments — Domestic & Overseas

Farm Equip. & Engines $2,217 $1,963 12.9 $6,538 $6,312 3.6 $8,455

Domestic $356 $490 -27.3 $1,323 $1,727 -23.4 $2,459

Overseas $1,861 $1,473 26.4 $5,215 $4,585 13.7 $5,995

Const. Machinery $355 $296 19.9 $1,087 $898 21.0 $1,266

Domestic $105 $114 -8.0 $263 $250 5.0 $344

Overseas $251 $183 37.3 $834 $648 27.2 $922

Farm & Ind. Machinery $2,573 $2,260 13.8 $7,624 $7,211 5.7 $9,721

Domestic $461 $604 -23.7 $1,585 $1,978 -19.8 $2,804

Overseas $2,111 $1,655 27.6 $6,039 $5,233 15.4 $6,917

Converted from JPY to US$. As of Feb. 9, 1 Japanese yen equal 0.0084 U.S. dollars.

Comparing 10 Years of Farm Commodity Prices

This table shows the average prices received for the major farm com-modities over the past decade. It was compiled as reference for Ag Equipment Intelligence subscribers. For each of the three major grains covered, the highest per bushel price for corn was in 2012 and in 2008 for wheat, while highest per bushel price for soybeans was in 2013.

Corn: Compared to 2005, the average price received for corn in 2014 was up about 110%. But compared to the highest average annu-al price received in the past decade ($6.67 in 2012), the average price in 2014 was down by 38%. In its Jan. 12 World Agricultural Supply and Demand Estimates report, USDA projected 2014-15 marketing year pricing for corn to range between $3.35-$3.95 per bushel.

Soybeans: The average price received for U.S. soybeans in 2014 was $12.48. This compares to the price received 10 years earlier by about 109%. When compared to the highest average annual price received ($14.07 in 2013), it is down 11.3%. USDA’s latest outlook for soybean price in 2014-15 ranged between $9.45-$10.95 per bushel.

Wheat: The average calendar year price received for U.S. wheat last year was $6.34 vs. $3.36 a decade earlier. This represents a gain of nearly 89%. The highest price received for wheat since 2005 was $8.01 in 2008, which means the 2014 price was down nearly 21% vs. wheat’s highest level in the past decade. The price of wheat is pro-

jected to range from $5.90-$6.30 per bushel during 2014-15.Cattle: The price received per hundredweight of cattle hit a new

record in 2014 of $154.33. This compares to the $95.18 received 10 years earlier, which is a gain of 62%. The lowest price received for U.S. cattle in the last decade occurred in 2009 when the price per hundredweight came in at $85.36. Compared to last year, that was down by 81%. In the December World Agricultural Supply and Demand Estimates, USDA suggested the average price of fed steers will be between $160-$172 per hundredweight.

Hogs: The price of U.S. hogs per hundredweight has seen a nice run up in recent years, as well. Compared to the price received in 2005 ($50.03), hogs, $77.10 last year, were up by 35%. The lowest price for hogs occurred in 2009 when it fell to $42.27 per hundredweight. The 2014 price represented an 82% increase over that low. Hog prices are expected to average $60-$65 per cwt this year, according to USDA.

Milk: Dairy farmers saw a decade high price for milk of $23.98 per hun-dredweight last year. Compared to 10 years earlier ($15.15), that was a jump of 58%. The lowest price received for milk took place in 2009, when it dropped down to $12.81. Compared to the low, milk per hundredweight in 2014 was up by 87%. As of Jan. 12, USDA’S all-milk price forecast for 2015 had been reduced to $17.75-$18.55 per cwt.

U.S. Calendar Year Average Prices ReceivedCommodity 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014

Corn ($/bu.) 1.96 2.28 3.39 4.78 3.75 3.83 6.01 6.67 6.15 4.11

Soybeans ($/bu.) 5.96 5.65 7.75 11.32 10.05 9.97 12.52 13.95 14.07 12.48

Wheat ($/bu.) 3.36 4.04 5.76 8.01 5.29 5.12 7.44 7.60 7.32 6.34

Cattle ($/cwt) 95.18 92.39 95.39 94.39 85.36 97.18 117.17 126.25 126.83 154.33

Hogs ($/cwt) 50.03 46.85 47.36 48.39 42.27 55.27 66.98 64.67 67.36 77.10

Milk ($/cwt) 15.15 12.90 19.13 18.32 12.81 16.29 20.14 18.57 20.03 23.98

Source: National Agricultural Statistical Service (NASS) of USDA

Strong U.S., European Sales Keeps Kubota in the Black ...Continued from page 4


After reporting a 3.8% fall in consoli-dated revenues to $32.6 billion and a drop in net sales of 4.5% to $31.2 billion, CNH Industrial expects it sales of tractors and combines to fall more than its previous forecast.

In reporting its fourth quarter and full year 2014 results on Jan. 29, the company says it is projecting a falloff in high horsepower tractors — those over 140 horsepower — of 15-20% in 2015. Earlier CNHI estimated sales of these units would decline by 10-15%. It also lowered its outlook for com-bine sales by 15-20% vs. 10-15% it had projected previously.

According to U.K.-based agrimoney.com, the data imply the combine mar-ket shrinking at roughly the same rate as in 2014, when it contracted by 18%, but some reduction in the pace of decline in the market for high-horsepower tractors, which tumbled by 25% last year.

Machinery markets in North America and Latin America had been particularly weak last year, although the European tractor market saw a “significant deceleration in demand” in the October-to-December quarter.

Ag Results. Net sales for ag equip-ment were $15.2 billion for 2014, down 9.3% from 2013 “driven by unfa-

vorable volume and product mix, par-ticularly in LATAM and NAFTA with a significant decrease for high horse-power products. This impact was par-tially offset by positive pricing,” the company says. Geographic distribu-tion of net sales for the year was 45% NAFTA, 31% EMEA, 13% LATAM and 11% APAC. Ag’s operating profit was $1.8 billion for the year vs. $2.1 billion in 2013. Operating margin was 11.6% compared to 12% in 2013.

The company reports that farm machinery’s worldwide market share performance was in line with the mar-ket for tractors but below the market for combines, mainly due to transition to Tier 4 Final engine compliant prod-ucts in NAFTA and a negative market mix in APAC. Ag equipment’s world-

wide production units were 5% higher than retail sales during 2014 but 19% below retail sales for the fourth quar-ter, as CNHI implemented its planned production slowdown to reduce com-pany and dealer inventory.

For the fourth quarter, net sales totaled $3.4 billion, a decrease of 17.8% compared to the same period in 2013. Operating profit was $241 million for the period, compared to $312 million for fourth quarter of 2013, with an operating margin of 7.1% vs. 7.5% in the last quarter of 2013. The decrease was driven by unfavorable volume, mix and produc-tion curtailments to realign inventory to market demand, partially offset by favorable pricing, as well as SG&A and R&D expense reductions.

CNHI Lowers Outlook for 2015 Further

CNHI Ag Equipment 4Q & Full Year Net Sales & Operating Profit

(in millions $)

4QChange

Full YearChange

2014 2013 2014 2013

Net Sales 3,403 4,142 -17.8% 15,204 16,763 -9.3%

Operating Profit 241 312 -71 1,770 2,008 -238

Operating Margin (%) 7.1 7.5 -0.4 p.p. 11.6 12 -0.4 p.p.

Source: Company Reports

Cattle Producer Returns Bolstered by Higher Price, Lower Feed CostsAll signals point to continued strong cattle pricing going into 2015. This trend should bode well for the sale of mid-range tractors (40-100 horsepower), which have experienced solid growth during the past 2 years, and it may even give a lift to high horsepower equip-ment. Unit sales of mid-range tractors were up year-over-year by 12.1% in January.

Strong feeder cattle prices (see p. 5 “Comparing 10 Years of Farm Commodity Prices”) and declining feed costs are supporting high returns for cow-calf producers. The price of 750-800 pound feeder steers at the Oklahoma National Stockyards exceeded $220 per hundredweight at the end of 2014, up $65 since January and over $100 since May 2013. At the same time, the price of corn (a major component of cattle feed) fell from above $7 per bushel in mid-2013 to under $4 per bushel by December 2014, reflecting a record 2014 crop projected at 14.4 billion bushels.

Despite weaker demand, beef prices are at record high levels due to tight supplies and historically low cattle inventories. Expanding the cattle herd is a long-term process due to the time it takes cattle to mature. It also requires holding some heifers off market for breed-ing purposes. Recently released data from USDA’s Cattle report suggests that inventories are beginning to grow and cattle prices have begun to retreat. With corn prices forecast by USDA to average around $3.50 per bushel for the 2014-15 marketing year, returns to

cow-calf operators should remain favorable into 2015.

200

150

100

50

0

-50

2011=100

Jan Apr Jul Oct Jan Apr Jul Oct Jan Apr Jul Oct Jan Apr Jul Oct2011 2011 2011 2011 2012 2012 2012 2012 2013 2013 2013 2013 2014 2014 2014 2014

Difference between Steer Price Index and Corn Price Index (Steer Index - Corn Index)Feeder Steers Price Index, Med. No. 1, 750-800 lb., Oklahoma City (2011=100)Corn Price Index, Chicago No. 2 yellow (2011=100)

Feeder Steer Index vs. Corn Price Index 2011-14

Note: Data through December 2014.Source: USDA Economic Research Service

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