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DEALERNortheast

The Newsletter of NoRThEAsT EquipmENT DEALERs AssociATioN, iNc.MAY 2016 c Vol. 19, No. 205www.ne-equip.com

IN THIS ISSUE:3 Hoober, Inc. is Precision Farming Dealer's Most Valuable Dealership4, 6, 8 Association News10-11 TCF Equipment Finance Information13 OSHA Whistleblower Protection14 Planning Before the Transfer16 Hold Your Salespeople Accountable17 May Light Specials

19 Tax Tips 20 Motor Carriers Granted Flexibility in Med Card Recordkeeping21 Do You Have a Business Continuation Plan in Place?22 Understanding the Terms Affordable Coverage and MInimum Value - ADA24-26 Equipment Industry News

ADVERTISER’S:2 Haylor, Freyer & Coon 7 Electronic Merchant Systems9 BallastStar9 Fastline15 NEDA Flat Rate Guide27 Federated Insurance

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.

A CALL TO ACTION WITH AGREAT LEASING PROGRAM AVAILABLE

TO NORTHEAST DEALERS Please read the articles on pages 10-11 concerning the leasing program available. TCF has a comprehensive leasing program that best fits the unique needs of your customers…call TCF for details and quotes. If you do not want to get involved in structuring leases, TCF will handle everything for your dealership. They offer one of the most comprehensive leasing programs in the market and will work with you and your customers to find the lease that best fits their unique needs. Contact MARK ECKLES, Business Development Manager, TCF Equipment Finance, P: 402-651-5913, [email protected], STACEY SIMMER, Sales Associate, P: 866-424-3150, [email protected] or visit their website: www.tcfef.com/ag for additional information.

One of the strengths of the Northeast Equipment Dealers Association, Inc. (NEDA) is a long history of providing members products and services that enhance a dealer’s business. TCF Equipment Finance (TCFEF) is proud to be the exclusive endorsed retail finance and leasing provider of NEDA. TCFEF is one of the premier equipment finance companies in the United States and strives to enhance your equipment sales by providing a comprehensive solution to your customers’ financing and leasing needs.

TCFEF BACKGROUND BENEFITS

TCF Equipment Finance, a division of TCF National Bank, is part of TCF Financial Corporation (NYSE:TCB), a Minnesota based national bank holding company founded in 1923. We are proud of our stellar financial history, profitable and growing since our founding in 1999.

• Backed by $20 billion in assets

• 14th-largest bank-affiliated US leasing company

• Sales and regional offices nationwide

TCFEF PRODUCTS

TCFEF has a wide array of products that meet the needs of both the customer and dealer.

• Loans

• Fixed Purchase Option Leases

• First Amendment Leases

• TRAC (Terminal Rental Adjustment Clause) leases

• Equipment Finance Agreements

• Flexible Payment Options

• Seasonal payments

• Dual Rate Payments

• Operating Leases

Ask us how these products can benefit your customers!

RELATIONSHIP DRIVEN

We understand that your greatest asset is your customers. We help you use financing/leasing as a valuable tool to manage your customer base and ultimately enhancing your equipment sales and customer value. We strive to earn business every day and continue to work just as hard to keep it. We build lasting relationships by continuously introducing dealers to new products and trends that benefit both the customer and the dealer.

MARK ECKLESBusiness Development ManagerC. 402.651.5913 • P. [email protected]

STACEY SIMMERSales AssociateP. [email protected]

CONTACT TCFEF TODAY!

• Dealer focused• Industry experts• Personalized service• Flexible, customized solutions for your customer’s unique needs• Easy application process - up to $350,000• Use financing/leasing to generate sales and enhance value• Help manage your customer base adding increased sales

TCF Equipment Finance offers competitive solutions that uniquely benefit our clients. We help customers zero in on the best solution that fits their needs and tailor it to their ultimate benefit.

NortheastEquipmentDealersAssociationEstablished 1901

Committed to Building The Best BusinessEnvironment for Northeast Equipment Dealers

Financing subject to credit approval and terms may be changed or withdrawn without notice. Neither TCFEF nor Northeast Equipment Dealer Association, Inc. is the agent of the other. TCFEF not being the manufacturer, seller or distributor of the equipment, makes no representation or warranty whatsoever with respect thereto. ©2016 TCF Equipment Finance

tcfef.com/ag

To see if you qualify, call Patrick Burns at Haylor, Freyer & Coon 800-289-1501, Ext. 2148or fax a current declaration page to 315-684-9801 or call

Ralph Gaiss (Executive Director of NEDA) at 800-932-0607 for more information.You may also visit us at www.haylor.com

Northeast Dealer | MAY 2016 … 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

JOsH AHeArN, President EDA OPE Dealer Council MemberAhearn Equipment, Inc. / Spencer, MA508-885-7085 • Fax: 508-885-7261Kubota, Cub Cadet, Stihl, NAPA [email protected]

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

JOHN e. KOMArisKY, 2nd Vice President / Immediate Past President 2015, 2012Main & Pinckney Equip Inc. / Auburn, NY315-253-6269 - FAX 315-253-5110New Holland, Simplicity, Brillion, Bush Hog [email protected]

BriAN cArPeNTer, Chairman of the Board for EDA, St.Louis, MOChamplain 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]

DirecTOrs

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

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

eD HiNes, Past President 2014, 2001Hines Equipment / Cresson, PA814-886-4183 • Fax: 814-886-8872Case IH, Gehl, New Idea, Cub [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 WArNerWarner Tractor & Equipment Inc., Troy, PA570-297-2141Case, Case/IH, Takeuchi, LinkBelt, LandPride, Agr. & Construction [email protected]

NoRThEAST EquIpMENTDEALERS ASSoCIATIoN

128 Metropolitan Park Drive • Liverpool, NY 13088 800-932-0607 • www.ne-equip.com

Fourth Annual Precision Awards ProgramHonors Top North American Dealer

Hoober Inc. is Precision Farming Dealer’sMost Valuable Dealership for 2016

The 2016 recipient of Precision Farming Dealer’s fourth annual Most Valuable Dealership is Hoober Inc. based in Intercourse, PA. In total, 54 U.S. and Canadian dealerships including large and small farm equipment dealership groups with precision departments, independent precision operations and co-ops were nomi-nated by their farm customers, pre-cision equipment suppliers and their own employees. We asked an independent panel of judges to evaluate pre-cision farming sales growth and diversity, along with how each nominee is generating revenue from hardware, soft-ware and precision service. We performed video interviews with key members of Hoober's precision farm-ing team to get a more intimate understanding of how the dealership has evolved in its approach for sales and delivery of service. The judges also analyzed less quantifiable elements that define the best preci-sion farming dealership, such as employee training, performance standards, inno-vation, sustainability and community involvement. In a segment of the agricultural industry known for turnover and burnout, Hoober’s precision department has been a model of stability and dedication. It’s these attributes that distinguished it from the other nominees this year. Since formally committing to its precision business in 2005, the 9-store Case IH dealership group has lost only 1 member of its current 10 person precision farming department during the last decade. This despite the addition of 4 stores during the last 3 years and a recent shift to having each location manage its own precision business rather than operating as a single division. This consistency and adaptability is rooted in Hoober’s core business values — integrity, teamwork and service — the last of which is the cornerstone of the deal-ership’s precision growth. Understanding that service and support of technology can be the deciding factor whether customers come back or take their business elsewhere, Hoober has built a reputation for putting customers ahead of number crunching. “Take care of the customer and the numbers will take care of themselves,” is a daily mantra that has helped ‘HOOBER grow overall annual hardware revenue to nearly $4 million, and increase precision service revenue by 2-4% each year to account for nearly 20% of overall precision profits. As noted by the judges, Hoober’s precision staff blends an established but evolving combination of expertise, innovation and confidence that provides reliable support for the diversity of products they deliver. - See more at: http://www.pre-cisionfarmingdealer.com/articles/1922-fourth-annual-precision-awards-program-honors-top-north-american-dealer#sthash.vZgYRZKz.dpuf

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

Fastline Media Group Hires Northeast Sales & Marketing Representative

Gehl 2015 Top Dealer Award Presented to Binkley & Hurst

Fastline Media Group hired Tom McWilliams as the local Sales & Marketing Representative for the Northeast farm territory which is comprised of Pennsylvania, New York, New Jersey, Connecticut, Rhode Island, Maine, Massachusetts, Vermont and New Hampshire. McWilliams’ responsibilities as the Northeast Sales and Marketing Representative for Fastline include developing and growing accounts through custom print and digital marketing solutions. A graduate of SUNY Brockport, McWilliams has more than 15 years sales experience with schools and youth groups throughout the state of New York. Most recently as Senior Sales Specialist at Enjoy the City, Inc./Save Around in Binghamton, NY and previously at Club’s Choice Fundraising in Eau Claire, WI. Mr. McWilliams is from Canandaigua, NY. For more information about career opportunities at Fastline Media Group visit www.FastlineMediaGroup.com/careers.

Gehl, a manufacturer of compact equipment for agriculture and construction markets, presented Dean Weaver from Binkley & Hurst with the 2015 Gehl Top Dealer Award. The award is based on the overall sales performance for North American Gehl Dealers in 2015. Binkley and Hurst was recognized and awarded for their top performance at the Manitou Americas corporate headquarters in West Bend, Wis., during the “Next Big Thing” new product introduction dealer event. Binkley & Hurst is a 7-store AGCO dealership based in Lititz, PA. “I would like to commend Binkley & Hurst for their excellent sales performance this past year. They have demonstrated commitment to their customers, dedication to our Gehl brand, and are a proven leader for our growing dealer network,” said Eric Burkhammer, vice president of sales and marketing for Manitou Americas Inc. “We are pleased to partner with Binkley & Hurst and I’m proud to present them with our Gehl 2015 Top Dealer Award.”

Your Association is involved in State Legislation Sessions, identifying and tracking all bills affecting equipment dealers and or/are relative to our industry. Legislative reports are shared with members.

NEDA works with EDA and other affiliate associations across North America to work with equipment manu-facturers, distributors, and other suppliers to address new Manufacturer Dealer Agreements including other industry topics to help resolve dealer issues.

NEDA members receive special pricing on trade-in guides for agricultural, construction, outdoor power equipment and power sports as well as Flat Rate Time Guide for Agricultural Tractors and Combines and the Outdoor Power Equipment Flat Rate Time Guide.

Your Association’s recommended providers offer the best business insurance and OSHA consulting pro-grams.

Your Association maintains relationships with various attorneys and consultants to help members address employment, labor law issues, dealer contract issues, customer relations, OSHA compliance, workplace safety issues, environmental issues, etc.

Annual Cost of Doing Business Survey along with the Wages and Benefit Survey provide data which allow dealers to compare their dealership operating results with averages of other Northeast Dealerships includ-ing all dealerships in North America.

We represent Equipment dealers’ interest in the North-east Equipment Industry concerning Government Relations. Keeping you informed of issues affecting you is our primary responsibility.

NEDA along with National Equipment Register (NER) provides stolen equipment alerts that go out across North America to law enforcement and other equipment dealers.

Legislative Representation

Dealer-Manufacturer Relations

Trade-In and Flat Rate Guides

Business Insurance and OSHA Compliance Services

NEDA, in partnership with Haylor, Freyer & Coon Health Group, provides equipment dealers and their employees with comprehensive, quality and afford-able Health, Disability and Dental Insurance coverage you can trust.

Health Insurance

Legal Counsel Hotline

Cost of Doing Business, Wages Survey

Government Relations & Compliance

NEDA staff provides ONE (1) forklift safety training & certification course at your dealership for all staff per-sonnel operating your forklift(s). Eligible staff must be 18 years of age or older with valid driver’s license for certification.

Forklift Training – Train the Trainer

Stolen Equipment – Call us Immediately!

NEDA’s website is a “hub” for dealer members and provides instant access to online dealer information and a database with a wealth of information. You can also use our 1-800-932-0607 hotline to call for immedi-ate assistance.

NEDA Hotline/Website

Annual regional meetings are conducted in various locations convenient to your dealership each year to interact with dealer principals and employees con-cerning various operational and marketing strategies relevant to your business.

Annual Regional Meetings

NEDA IS DESIGNED TO MEET YOUR BUSINESS NEEDS



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

Your link to the power equipment industry isNeDA!!!

What’s in it for me?PLENTY!!!

128 Metropolitan Park Drive | Liverpool, NY 13088 | phone 800.932.0607 | www.ne-equip.com

www.ne-equip.com

NEDA offers you forms and supplies specific to equip-ment dealers. Count on a wide selection, competitive pricing and great service! Please call us.

Business Forms and Supplies

Regulations continue to be a large burden like OSHA, Trucking,Health Mandates, Data Security/Privacy, Retail Financing, etc.

NEDA is here to help take the mystery of these burdens away from you,so you can continue to run your daily business operations.


Mahindra Expands Northeast Distribu-tion & Assembly Center in PA Mahindra North America is investing in the expansion of its Mahin-dra Authorized Distribution Center (MADC) – Northeast, in Bloomsburg, Pa. The new facility opened in March 2016 to support the explosive 63% growth the facility has experienced since it first opened in 2014. MADC – Northeast is operated in partnership with TPC Power Center; owners Dan and David Broadt manage and operate the distribution cen-ter which serves the Northeast region of the U.S. and Eastern Canada. Mahindra North America and TPC Power Center open an expanded Distribution and Assembly Center in Blooms-burg, Pa., to serve Mahindra dealers in the growing North-east Region of the U.S. and Eastern Canada. “The expansion of the MADC – Northeast further strengthens our ability to keep pace with the tremendous business growth driven by our dealer/customer-first strategy. Our partner-ship with Dan and David Broadt, TPC Power Center owners is a testament to Mahindra’s investment in delivering more value through our product and services to meet the needs of our growing customer base,” said Cleo Franklin, vice president marketing and strategic planning, Mahindra North America. “This new facility is more than an asset; it has raised the bar as we increase our dealer network in support of rising demand as the Mahindra brand continues to grow.”The larger, upgraded Mahindra Authorized Distribution Center - Northeast relocated one mile from the current TPC Power Center location in Blooms-burg and features a 94,000 square foot assembly and production facility situated on 12 acres. The Distribution Center has the capacity to assemble and ship tractors to keep pace with the increased needs of our dealer part-ners in the Northeast and Eastern Canada and will enhance the quality assurance for our customers. In addition, it serves as a regional product sales and service training center to provide full-service business support for Mahindra dealers in the area. - See more at: http://www.farm-equipment.com/articles/12743-mahindra-expands-northeast-distribution-assembly-center#sthash.58HKAQQu.dpuf

Mahindra North America and TPC Power Center open an expanded Distribution and Assembly Center in Bloomsburg, PA, to serve Mahindra dealers in the growing Northeast Region of the U.S. and Eastern Canada.

Credit/Debit Card Processing I Check Verification & Guarantee I eCommerce Solutions I Custom Loyalty & Gift Cards

Wireless Processing I Petro Program (Fleet) I Merchant Funding I Payroll

866.367.1818

It’s been on your mind, now is the time to act. Why not do a little spring cleaning around your business

and get rid of high rates and unnecessary fees? Electronic Merchant Systems has partnered with the

Northeast Equipment Dealers Association to do one thing and one thing only - save your business

money. Give us a call today to immediately lower you monthly fees and slash your rates! As a member

of the NEDA you gain access to special rates and discounts.

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Fastline Media Group Wins National Award Fastline Media Group was selected as a bronze winner in the 37th An-nual Telly Awards for its piece titled American Farmer: Tools of the Trade. Fastline Media Group's American Farmer segment originally aired, nation-wide as part of the American Farmer TV series on RFD-TV December 15, 2015 and can be seen online at www.fastlinemediagroup.com/about. The 13 minute segment explores Fastline Media Group’s beginnings and nearly 40 year transition from trucking to numerous niche agriculture publications and websites. The episode showcases a variety of staff mem-bers from the home office in Buckner, Kentucky and its subsidiary – MCW Printing in Louisville, Kentucky. Previously known as Fastline Publications, Fastline Media Group has been serving the American farmer and rancher since 1978. Fastline Media Group is based in Buckner, Kentucky. The company produces 22 Fastline farm equipment catalogs distributed across the continental United States, a nationwide Big Ag catalog and a publication for women in agriculture, Pink Tractor. Each publication is supported by its own website -- Fastline.com has the largest, freshest database of agricultural equipment online, BigAg.com is the first of its kind, community-based website for large com-mercial farming operations and PinkTractor.com recognizes women in Ag and provides tips, info and more.

Advertising Space is Available! The Northeast Dealer, the Northeast Equipment Dealers Association monthly Newsletter is designed primarily as a source of information for its dealer mem-bers and others involved in the industry. Distribution is to more than 850 members and contacts. For additional rate information, publi-cation profile, format specifications, adver-tising deadlines or any additional questions contact Dave at the Association office at (800) 932-0607 or Art Smith, Editor at [email protected].




SAFE, EFFICIENT, COST EFFECTIVE LIQUID TIRE BALLAST

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LARGE ACRESuper fans – not only are they getting the Fastline catalog 17 times a year, they’ve got the premium box seats.

SUBSCRIBERGame day 17 times a year!

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of fans who look forward to seeing as many games as possible.

IMAGINE THIS STADIUM FULL OF 20,000 QUALIFIED BUYERS Some are season ticket holders; some attend a couple of games a year.

Fastline delivers a sold-out crowd for all 17 editions with a combination of season and single ticket holders. For every edition of Fastline, a fan base of 20,000 qualified farmers fills the Fastline stadium… it’s just a little different mix of people every time.

Make sure you're running in consecutive editions by calling your local sales and marketing representative today at 800-626-6409

For an in-depth look at Fastline's catalog distribution list visit Fastline.com/Distribution

EQUIPMENT. FOUND. FAST.

800-626-6409








TCFEF PRODUCTS


• Loans










RELATIONSHIP DRIVEN










tcfef.com/ag







TCFEF PRODUCTS


• Loans










RELATIONSHIP DRIVEN










tcfef.com/ag


(This is the second of a two-part article. Part one appeared in the April NE Dealer.)

It is a “seller’s market” for experienced service technicians. The law of supply versus demand has kicked in and as we mentioned many times the demand for technicians far out paces the supply. Maybe, just maybe that is the miracle all of you who constantly state how difficult it is to find a technician have been waiting for. Its’ payback time, ladies and gentlemen! I discovered long ago how much it meant to have a job offered when I was released from the service. I am a Veteran, I was drafted I wasn’t a volunteer like all of these great people are today. Most equipment dealers have cycles in their business when business slows down, and most business cycles follow a pattern. When business is slow we are told to cut back on expenses and personnel. This of course makes sense, but where do we cut? Maybe we can lay off a few technicians, even though we know it will be hard to hire them back after the market turns around. Maybe we lay off a new hire, our aftermarket sales person. Funny most of the successful dealers believe just the opposite. They send somebody out there to market their shop, to bring the equipment in for repair. When a dealer tells us he does not have enough service business right now to hire a technician, we tell him to look at his Service Contribution to Total Sales. Most dealers, except the professionals run single digits. This is a clear indication that they are missing the greatest sales opportunity available to their dealership. We tell them to get out there, become proactive and fill up the shop. Again their comeback, “we can’t find technicians!” If we continue to sit around waiting for some miracle to happen, you can be sure that little will change. I know a Corporate Service Manager who has six Service Managers. Each one has been assigned a trade school within their area. Each one spends a day a month visiting the schools and recruiting. They are not sitting around in their offices waiting for a prospect to walk through the door.

The sub-title of this month’s article is: Hire a Vet! Maybe, just maybe that is the miracle all of you who constantly state how difficult it is to find a technician have been waiting for. Its’ payback time, ladies and gentlemen! These men and women fought for your freedom. I ask all of the equipment dealers I visit or talk with over the phone what their experience has been with hiring veterans. Yes, I hear a few “sour grape” stories, but that is bound to happen. I also hear a lot of great stories, like the guy who told me: “they don’t always have the work experience on our type of equipment,

but they sure do have a great “work-ethic” and I’ll take “work-ethic” every time over experience!” In almost all the ads we see one line that we believe dealers should question and drop: “Applicant must have ____ years of experience working on __________ equipment.” Doesn’t this severely limit the pool of technicians you will be interviewing? Most manufacturers today are providing excellent “hands- on training” for technicians. If professionals have the knowledge of the basics: finding information, pre-delivery, planned maintenance, electronics, hydraulics, system trouble-shooting, diagnosis, computer knowledge, up-selling, etc., then they can quickly learn all that is necessary to work on the equipment that your dealership sells.

Yes, sending technicians off to a factory-training course located in some far off city for a week can be expensive i.e., transportation, lodging and meals, not to mention the lost job time for the individual and the service department. All of these arguments against training only make sense as long as the dealership perceives this training as an expense and not as an investment. In any successful equipment dealership it is the dealership’s investment in people that pays off! Professionals never stop their education process. Technicians welcome every opportunity for more training and become frustrated when dealers block their efforts and their thirst for learning more about the profession that they have chosen. An investment is not an expense. In today’s fast moving market place the dealer who does not invest in personnel is going to be left behind. Computer training, understanding and knowledge are a must for professional service technicians. Working on any

continued on page 13

I DON’T SEEM TO UNDERSTANDHoW HArD IT IS To HIrE A TEcHNIcIAN!

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

[email protected]

When a dealer tells us he

does not have enough

service business right now

to hire a technician, we tell

him to look at his Service

Contribution to Total Sales.


oSHA BrIEF

WhISTLEbLoWER pRoTECTIoN

OSHA publishes rules for handling retaliation complaints from automotive and finance workers

OSHA has published whistleblower protection rules to ensure that workers are protected when they voice concerns about workplace violations of federal law. A recently published interim final rule establishes procedures for handling complaints of worker retaliation under the Moving Ahead for Progress in the 21st Century Act. MAP-21 protects workers in automobile manufacturing, part supplies and car dealerships who have been discharged or otherwise retaliated against for informing their employer or the Secretary of Transportation about motor vehicle defects or violations of motor vehicle safety standards. The interim final rule became effective March 16, 2016. OSHA invites the public to submit comments on this rule by May 16; to learn how, see the Federal Register notice. An OSHA fact sheet* provides additional details. See: https://www.osha.gov/Publications/OSHA3716.pdf or http://www.whistleblowers.gov/acts/map21.html

Hire a Technician!continued from page 12

piece of equipment today is tied into a computer and the technicians’ ability to diagnose the problem via the “black-box”. Manufacturers are going to continue at an accelerated rate to produce more and more sophisticated equipment. The dealership’s professional sales force will sell this equipment with all of its “bells and whistles”. This equipment, despite the manufacturer’s or the sales person’s claims will at some point fail under operation. If at that point the dealer has failed to invest in the dealership’s technicians, then possibly the equipment is going to sit idle waiting for someone to repair whatever caused the repair problem? At this time we can think of no other position within the typical equipment dealership that is as important as the qualified, professional service technician. The position is important for two primary reasons: 1] It has and it can continue to provide the dealership significant cash flow and exceptional profitability, 2] the position develops strong customer loyalty and keeps the customer coming back for more of the dealership’s products and service. Develop a cultural change in your dealership. Look at hiring, training, compensation/motivation and maintenance of a quality and professional group of service technicians as an investment in the growth and profitability of your business. It should be an expense only on your financial statement! Look at your hiring practices. Do you put the same effort into hiring technicians as you do sales personnel? How do your recruiting ads look? Do you sell the features, advantages and benefits of working for your dealership? Have you studied your recruiting procedures? Does the candidate only meet with the service manager? Do you stress that your dealership is offering a career opportunity? Does the candidate walk away with the understanding that your dealership is offering much more than “just a job”? Have you considered a pay for performance program for technicians, a pay program that rewards quality work to the professional service technician? Do you indicate that your dealership offers opportunity for advancement through technician training? Yes, hiring, training and maintaining quality, professional service technicians is hard work. Ann Landers is quoted as saying: “Opportunities are usually disguised as hard work, so most people don’t recognize them!”

mAKiNG FoRms& suppLiEsAVAiLABLE& AFFoRDABLE

Your Association offers you... Business Forms, Stationery, Envelopes Computer Invoices, Statements, Checks

Sales TicketsWork, Repair and Purchase Orders

Federal and State Labor Law Posters

We’re here for your form and Supply needs,PLEASE CALL TODAY!

NEDA128 Metropolitan Park Drive, Liverpool, NYPhone: 800-932-0607 | Fax: 315-451-3548


By LANcE FormWALT, SEIgFrIED BINgHAm, P.c.

The moment has arrived. After many years of hard work and countless conversations with family and other owners, you made the decision … I’m going to sell my dealership. But now what? Making the decision to sell your dealership is often the hardest part of the transfer process. But once that decision is made, other issues must be addressed to help you create a strategy before negotiations begin.

VALuATIoN What is your dealership worth? Does the value match up with your expectations? Many factors determine value, including asset values, profitability and ease of financing. Sellers should consider hiring a valuation expert to take these and other factors into account and gain insights on industry valuation trends. Western Financial Consulting is the firm I recommend due to its industry knowledge and experience in conducting equipment dealer valuations. For more information on Western Financial Consulting, you can contact Curt Kleoppel at 816-561-5323 or [email protected].

CoNTExT After assessing value, consider the context of your situation as it may impact the timing and structure of a transfer or the price a buyer will pay. Questions to help you assess context include:

• Do you have market share issues? Is termination of your main line dealer agreement likely?

• How many potential buyers exist?

• Has your manufacturer told you who may be permitted buyers? (“permitted” buyers should be your preferred buyers unless a large value gap exists)

• What is your appetite for

remaining in business? (impacts use of merger as a potential transfer structure)

• Is one of your locations a “closed point”? (fair dealership laws play a role, but this factor may reduce valuation, including a reduction in dealership real estate value)

TAxES Consult your attorney or other tax advisor to understand the impact of taxes on your deal. Structure decisions can impact dollars in your pocket after taxes are paid. Some common issues impacting taxes include:

• Asset vs. Stock Sale. A stock sale represents the best tax consequence for a seller because the proceeds are taxed at lower capital gains tax rates. Sellers normally pay higher rates of taxes if the dealership sells its assets. Unfortunately for sellers, buyers may refuse to buy stock because it requires a buyer to assume your liabilities, can limit the ability to use manufacturer floor planning to pay for part of the purchase price and the ability to reset asset values for purposes of depreciation is generally not available.

• Type of Entity Matters. Is your dealership an S corporation, partnership or limited liability company? If so, the tax difference between an asset sale and stock sale is minimized. The reason for this is that much of the taxable purchase price paid in dealership transactions are tied to the real estate or “blue sky” and result in taxes at capital gains tax rates to the individual owners of the dealership.

• What about C Corporations?

Many dealerships remain in C corporations. C corporations pay a separate income tax from the owners of the business and create a “double tax” in an asset sale. Unlike other types of entities, purchase price payments to a C corporation are subject to one tax rate that is significantly higher than the capital gains tax rate. To top it off, Uncle Sam will also charge the owners a second tax when the dealership distributes the money to the owners. Through planning, it is possible to minimize some negative tax consequences, but the unfortunate truth is that C Corporation dealers often keep less in their pockets. Planning Note: if a sale is a few years away, contact your attorney or tax advisor about potential benefits of converting a C corporation to an S corporation.

MERgER?• Benefits. Mergers between

dealerships can usually be accomplished on a tax-free basis. It is also possible to buy out certain owners in a merger (the selling owners would pay tax). In most cases, mergers don’t require payments or additional debt, meaning that the equity levels of the dealerships won’t be impacted. This helps dealers maintain minimum equity levels required by some manufacturers.

• Complications. Mergers are more complicated because the parties will continue in business together. This means that each dealer must carefully review the operations of the other dealer(s) to understand what


pLANNINg bEFoREThE TRANSFER


FLAT RATE GUIDEfor combines and ag tractors over 40HP

If you have ever wished for an all-makes flat rate guide which listed realistic repair times for your service shop, then we be-lieve your wish is granted. It covers combines and agricultural tractors over 40hp. The manufacturer lines are:

Allis-Chalmers Deere New Holland AGCO Ford Steiger Case IH Versatile Case IH Kubota White Caterpillar Massey Ferguson

Equipment from 1980 or newer is covered in the book, and listed repair times are for internal engine components, drive-train components, and selected external compo-nents such as injection, fuel, hydraulic, and water pumps, radiators, air conditioning compressors, alternators, and starters.

Why Develop Such a Resource?There are many objectives that were followed in analyzing the entire program, but the main objectives were as follows:

(1) To promote accurate estimates based upon flat rates that are compiled us-ing ‘’real world” data.

(2) To promote the use of flat rates in equipment dealer service centers as a distinct billing choice.

(3) To enable dealership service managers to make realistic estimates on important jobs without having a great deal of technical expertise...open the door to a “Wider spectrum of management candidates to fill service management/supervisory positions.

(4) To facilitate “all makes” service where appropriate.(5) To assist dealers in estimating repair costs on trade-in units to determine

trade-in values.(6) To give dealers a fair way to analyze productivity of their own service

operations and technicians.

How Was the Guide Developed?Flat rates were derived by blending actual times spent by over 66 dealers through-out the country. The data was collected at the dealerships by interviewing service managers and lead technicians. The data was collected on major jobs not small jobs that could be readily sold as ‘’time and material” jobs. One thing that is important to remember is that the times stated in the Flat Rate Guide do not include appropriate diagnostic time which will be sold separately by the dealers as ‘’time’’ operations.

When Was It Last Updated?In 2001, the Ag Flat Rate Guide received a major update, adding 108 more tractor models, including Caterpillar. The update also included 18 more combine models. In 2005, the Ag Flat Rate Guide was updated, adding 65 tractor models and 10 combines.

How Do I Order?Contact the Northeast Equipment Dealers Association. The guide is available in two versions: a 3-ring binder or a CD. We feel the guide is an invaluable tool when dealers truly try to make their service shops a profit center of the dealership.



P.O.Box 3470Syracuse, NY 13220

1-800-932-0607 Fax 315-451-3548

ne-equip.com


By JoHN cHAPIN

HOW TO HOLD YOUR SALESPEOPLE

ACCouNTAbLE In a previous article I mentioned that one of the big-gest issues I see when it comes to managing sales teams is a lack of accountability. Because it was only mentioned briefly as one of several issues, I’ve had many people come back to me asking for more on this particular problem, so here it is.

FIVE STEpS To hoLDINg YouRSALESpEopLE ACCouNTAbLE

Step 1Set high standards during the hiring process

Whatever your standard expectations are for your salespeople, double those expectations when talking to a potential new hire. For example, if you expect your sales-people to make 50 phone calls a day, tell the candidate it’s 100. If you expect them to go out and knock on 25 doors a day, tell them it’s 50. If you expect them to work until 7 at night, tell them it’s 9. Do you expect them to work on Saturday? Tell them Saturday and Sunday. Yes, I hear some of your groaning right now. The point of this is to test the candidate during the interview process. You’re looking for hard workers, not skaters or slackers. You can adjust your numbers to something more reasonable later but if you start with average numbers, you’ll get average people to agree and then fall short even on those numbers. You have to set expectations high to begin with. Note: You also need to be hiring attitude and aptitude. You can’t teach work ethic, drive, self-motivation, and per-severance, and you can’t teach people to sell who aren’t cut out for it. You need to hire people willing to do the hard work and make tons of calls, even cold calls if neces-sary. Have a tough hiring process and stick to it no matter who the candidate is or how good they seem to be. Make them jump through some hoops and be tough. If they can’t take a little heat from you, how are they going to take the heat out in the streets?

Step 2hold people to the expectations they agree to

Everyone needs to have annual, monthly, and weekly goals that translate to daily activity. Are they making the number of phone calls and knocking on the number of doors they need to? Are they working on Saturday if that’s what they said they would do? What’s their work ethic? Are they meeting their daily numbers, exceeding them, or falling short? Do they show up early and leave late? The

key here is, whatever they agree to they need to be hit-ting those numbers and ideally exceeding them to some degree. They also need to be working hard on the right activities. If they aren’t hitting the numbers, are they put-ting up a valiant effort? Do they need some skills devel-opment or time management help? Whatever the issue, if they are falling short on their numbers it needs to be corrected quickly which leads to the next step…

Step 3 Everyone needs to be on a 180-day employment cycle

Every new hire should have an original employment contract of 180 days. Look, you probably know within a couple of weeks whether or not this person will make it so you don’t want to be stuck with someone for longer than 180 days. With new hires you want to micro-manage their activity a bit in the beginning and review numbers almost daily. Track calls and activity and the bottom line is: ulti-mate sales numbers don’t lie. If they are falling short in the first 90 days, and they have the right attitude and aptitude, they should be able to make the necessary course correc-tions and you should see marked improvement and growth in the second 90 days. If numbers are still abysmal after 180 days, it’s time to cut bait. All your other producers, even the veterans, should also have a serious 90 and 180-day review. When you look at their last 90 days, if there are problems, they have 90 days to get them corrected. You may not have to be as strict and overt with your “good” people, but just make sure they aren’t getting into a comfort zone, developing bad habits, and/or getting complacent. Note: This is another area where sports has it right. The goalie not stopping pucks, pitcher giving up runs, and quarterback throwing too many interceptions isn’t the starter for long.

Step 4 Check up on your people In addition to tracking the number of phone calls ev-eryone is making, you also need to be listening to phone calls and going out on calls with your people. The best way to listen to and go out on calls is with no prior notice. What I like to do is call someone out in the field, ask where they are, and then meet them and go on a few calls with



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

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Uses 4-AA batteries, Strong Magnetic Mount, Durable Polycarbonate Lens, IP65 Regular Price: $21.24 Special Price: $20.17 Retail Price: $32.75

Order Form Item # Qty. Cost Ea. Total Dealership Name: __________________________ HF45A _______ $20.17 __________ Shipping Address: __________________________ HF45R ______ $20.17 __________ City, State, and Zip: ____________________________ 40 PER CASE 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 MAY 31, 2016

2 year Warranty


planning before the Transfercontinued from page 14

they will have after the deal closes. Negotiation of a buy-sell agreement between the owners is also critical (to be discussed in my next two articles) and you should never underestimate the challenges of integrating multiple companies and creating a shared culture after closing.

A decision to sell is only the beginning. By understanding your options and doing some advance planning, you will be able to develop a “sale” strategy that is best for you.

Lance Formwalt is a member of the Equipment Dealer Practice Group at Seigfreid, Bingham, Levy Selzer & Gee, P.C. The firm also serves as legal counsel to the North American Equipment Dealers Association. Contact Lance at [email protected] or 816-265-4106. This article is intended to provide general recommendations and is not intended to be legal advice. You should always consult your attorney for advice unique to you and your business.

Hold Your Salespeople Accountablecontinued from page 16 them. I also walk into someone’s office and say, “Let’s make some phone calls.” And then I listen in. The element of sur-prise is the most effective because the salespeople who are making the calls and are out doing what they are supposed to be doing won’t be offended and will appreciate the help and insight. The mediocre and poor producers who aren’t prepared for the phone calls, or who say they’re out mak-ing calls but in reality are hiding out at a coffee shop, the movies, or elsewhere, will hate this. Note: As with Step 3, you know who your best people are and you can let them be a bit more autonomous. You may not have to surprise them like you do the person you suspect isn’t doing what they say they are. That said, no one gets a pass on accountability. If people are allowed to rest on their laurels, most will. Be careful of being too lax even with your best people.

Step 5 post sales numbers where all can see and use peer pressure

The lunch room is a great place to post numbers. The point here is that people with low numbers will feel pressure to get their numbers up and the champions don’t mind some friendly competition and pushing one another. You also want a positive environment of winners where the peo-ple who are working hard and doing the right things will thrive and the negative people and slackers will conform or exit stage right. Overall the most important part of accountability is to be committed to it and don’t let people slide, because if you do, most will.

John Chapin is a sales and motivational speaker and trainer. For his free newsletter, go to: www.completeselling.com John has over 27 years of sales experience as a number one sales rep and can be reached at 508-243-7359, [email protected] or www.completeselling.com

If you do not have a certified trainer at 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

TRAINYOUR

TRAINERForklift

OperatorSafety

Training&

Certification Courses

required every three years

Did You Know ? • Sleepingwithoutapillowreducesbackpainandkeeps

your spine stronger.• Aperson’sheightisdeterminedbytheirfather,and

their weight is determined by their mother.• Ifapartofyourbody"fallsasleep",Youcanalmostalways"wakeitup"byshakingyourhead.

• Therearethreethingsthehumanbraincannotresistnoticing, food, attractive people and danger.


TAX TIPS

What you Should Know About children with Investment Income Special tax rules may apply to some children who receive investment income. The rules may affect the amount of tax and how to report the income. Here are five important points to keep in mind if your child has investment income: 1. Investment Income. Investment income generally includes interest, dividends and capital gains. It also includes other unearned income, such as from a trust. 2. Parent’s Tax Rate. If your child's total investment income is more than $2,100 then your tax rate may apply to part of that income instead of your child's tax rate. See the instructions for Form 8615, Tax for Certain Children Who Have Unearned Income. 3. parent’s Return. You may be able to include your child’s investment income on your tax return if it was less than $10,500 for the year. If you make this choice, then your child will not have to file his or her own return. See Form 8814, Parents' Election to Report Child's Interest and Dividends, for more. 4. Child’s Return. If your child’s investment income was $10,500 or more in 2015 then the child must file their own return. File Form 8615 with the child’s federal tax return. 5. Net Investment Income Tax. Your child may be subject to the Net Investment Income Tax if they must file Form 8615. Use Form 8960, Net In-vestment Income Tax, to figure this tax. Refer to IRS Publication 929, Tax Rules for Children and Dependents. You can get related forms and publications on IRS.gov. Each and every taxpayer has a set of fundamental rights they should be aware of when dealing with the IRS. These are your Taxpayer Bill of Rights. Explore your rights and our obligations to protect them on IRS.gov.

IT’S YOUR LIFE…..

Estate Tax Plans are Not only For the rich and Famous

use any exemption not used by his or her deceased spouse. This effectively gives a married couple the ability to pass $10.9 million to their heirs with-out incurring any federal transfer tax liability. As a result, planning for estate taxes has become less of a concern for many business owners. In fact, the Urban-Brookings Tax Policy Cen-ter (TPC) estimates that only 0.2 percent of all estates from 2015 will owe estate taxes. Put another way,

In 2012, Congress passed the American Taxpayer Relief Act, which finally provided business owners and their advisors with some needed cer-tainty around planning for gift and estate taxes. To recap, each person currently has an exemption amount of $5.45 million (for 2016), which can be used to pass assets to heirs free from gift tax during life, or estate taxes at death. Assets can still pass tax-free between spouses, and “por-tability” allows a surviving spouse to


99.8 percent of decedents will prob-ably not be subject to the federal es-tate tax! As reassuring as that sounds, don’t relax quite yet. There are other tax issues lurking for the next generation that still need to be ad-dressed when reviewing your estate and business succession plans.

STATE LEVEL ESTATE TAxES Although most individuals will not owe federal estate taxes, remember that a number of states impose their own state level estate or inheritance tax. Currently, fif-teen states (CT, DE, DC, HI, IL ME, MD, MA, MN, NJ, NY, OR, RI, VT and WA) have an estate tax, and six (IA, KY, MD, NE, NJ, and PA) have an in-heritance tax. Two states, Maryland and New Jersey, impose both. Each state has an exemption under which assets can pass to heirs without in-curring the state level tax, but these amounts are significantly less than the federal exemption amount in all but three states. Additionally, most states do not offer portability of the deceased spouse’s unused exemp-tion, so special planning documents are needed to take advantage of both spouses’ state exemption.

FuTuRE INCoME TAxES In the past, conventional wisdom included lifetime gifting of assets to heirs, with the objective of reducing the size of an individual’s estate at death to below the federal exemp-tion amount. Keeping the value of the gifts to less than the annual gift tax exclusion amount (currently $14,000) each year could allow for a significant reduction in the size



TAX TIPSEstate Tax Planscontinued from page 19

of an estate over the years, with no lifetime use of the donor’s exemption amount. However, there is an important difference be-tween lifetime gifts and transfers at death that can have a significant impact when it comes to future tax liability—the tax basis of the property in the hands of the new owner. The basis of property is important, as it is used to determine capital gains or losses when the asset is later sold. Lifetime gifts receive a “carryover basis,” which means the recipient takes the donor’s basis in the property. For highly appreciated assets such as busi-ness interests or real estate, this could subject the new owner to significant capital gains tax liability if he or she wants to sell the asset. In contrast, assets received at death take a basis equal to the date of death value. In the case of appreciated assets, tax liability on the growth of the asset can be eliminated when trans-ferred this way. Taxpayers and their advisors need to be mindful of the basis and current value of their as-sets when determining the best way to pass them on to their heirs. So, just because 99 percent of us probably won’t need to worry about estate taxes, tax liability may come in other, less expected, ways. Working with knowledgeable tax and legal advisors is important. Meet with them on periodically to review and update existing plans and identify tax strategies. Because not having an estate plan is something you don’t want to pass along to your heirs.

~ Provided by Federated Insurance Co.

HIGHWAY

OPEI Survey Shows Consumers Still Sorely Lacking Education on Higher Ethanol Fuel Blends Awareness and knowledge of how to use high ethanol fuel blends remains relatively unchanged among consumers over the past few years, according to a recent national poll conducted online by Har-ris Poll on behalf of the Outdoor Power Equipment Institute (OPEI). According to poll results, price con-tinues to drive decisions at the pump and consumers do not pay much attention to pump warning labels. OPEI conducted similar research in 2013 and 2015. The 2016 poll results show that almost two-thirds (64 percent) of age 18-and-older American adults who own outdoor power equipment say they either are not sure (42 percent) or do not pay any atten-tion (22 percent) to what type of fuel they are using. In 2015, almost half (45 percent) were not sure what type of fuel they used and one in five (20 percent) did not pay any attention to the type of fuel used. See the very lengthy article at: http://outdoorpowerequip-ment.com/2016/03/31/o p e i - s u r v e y - s h o w s -consumers-still-sorely-lacking-education-on-higher-ethanol-fuel-blends/9393/

Motor Carriers Granted Flexibility in Med Card Recordkeeping The Federal Motor Carrier Safety Administration has clarified in writing that motor carriers can fulfill driver medical certification recordkeeping requirements by including a printed screenshot from the State Driver's Licensing Agency (SDLA) website in the driver qualification file, rather than a copy of the driver's motor vehicle record (MVR). At issue is the cost associated with obtaining an official MVR to prove a driver's medical certification as currently required under 49 C.F.R. § 391.51(b)(7). The clarification allows motor carriers to use a printed screenshot of the updated medical certifi-cation information from the official SDLA website in lieu of an MVR. FMCSA issued the clarification in response to an inquiry from ATA. Based on information provided to ATA by motor carriers, up to 12 states may be providing up-dated medical certification information online in this fashion.


By BArT BASI

DO YOU HAVE ABUSINESS coNTINUATIoN PLAN

IN PLACE FOR YOUR BUSINESS AND EMPLOYEES?

A few months ago a storm hit Chicago and over 1000 flights were cancelled at O’Hare and Midway Airports. At the beginning of 2016, the Mississippi was flooding the Midwest. Both weather events lead to huge business losses. Spring is coming and with spring comes the beginning of tornado season. Statistically, this country experiences 1000 tornados per year. On average, there are 10 named storms in the Atlantic with over half of those becoming hur-ricanes. The events can range from minimal impact events such as snow and ice, to severe impact events (wild fires and hurricanes). Depending on the scale of the event and a business’s level of planning for disasters, the business will either move on or close forever. Natural disasters frequently result in prop-erty loss, termination of certain employees, injury to employees, loss of revenue or catastrophes up to and including loss of the business or lives as well. Every company can and should plan to continue in at least some capacity after a natural disaster.

pLANNINg FoR ThE WoRST The absolute worst thing to do in preparation for a natural disaster is to do nothing at all. Waiting until it is broadcast on the radio or seeing a major storm system develop on the news is not the time to begin your preparation for a disaster. At that point, communications and electrical systems may already be failing area-wide. Critical supplies (oil, gasoline, diesel fuel) and emergency supplies such as AAA cell batteries, D cell batteries, battery power back-ups for computer and electronic systems, genera-tors and even flashlights, needed for business and human continuation may have already been sold out of stores by a panicked population. If you don’t believe it, Google the terms: eggs bread milk. Then click Images. The best thing a business owner can do to con-tinue business during and after a disaster is to begin preparation well in advance. Here are three basic planning activities to get business owners started in short form below.

1) Written Instruments and Communication Along with any disaster plan, written instru-ments are a necessity. Reducing a plan to writing is a sure sign that the plan is being developed in a manner which is achievable.

2) Security Reasonable measures must be taken in order to, if not defend the store; provide footage for law en-forcement to catch the individuals responsible for the crimes there committed.

3) Finances Modern day financing relies heavily on elec-tronic mediums such as credit card readers and tele-communications. Bottom line, if there is no power, there is no money. Your employees will also need financial assistance during this time period as well. Two weeks of pay can ensure that employees 1) can pay their bills and endure, and 2) come back as they will be obligated to work for the pay advance you provided them with.

CoNCLuSIoN Every business should have a disaster plan in place to survive a natural disaster ranging from the smallest to devastating. People face challenges and businesses do as well. It is important that a natu-ral disaster does not become a bankruptcy, where a continuation would have been entirely possible. Roman Basi and his firm frequently devise simi-lar plans involving business succession, business operational manuals (including disaster planning) and business valuations. You can view the ready.gov Preparedness Planning for Your Business site at http://www.ready.gov/business, or you can go to www.taxplanning.com, and follow our link.

The Center for Financial, Legal & Tax Planning does a lot in the way of tax planning, valuations and business succession for business owners and individuals as well. If you would liketo have your business valued or succession plan made, give us a call at 618 997 3436.


hEALTh INSuRANCE ... AFFoRDAbLE CARE ACT ... MEDICAL

uNDERSTANDINg ThE TERMS AFFoRDAbLECoVERAgE AND MINIMuM VALuE

In general, under the employer shared responsi-bility provisions of the Affordable Care Act, an ap-plicable large employer may either offer affordable minimum essential coverage that provides minimum value to its full-time employees and their dependents or potentially owe an employer shared responsibility payment to the IRS. Here are definitions to help you understand af-fordable coverage and minimum value.

AFFoRDAbLE CoVERAgE If the lowest cost self-only health plan is 9.5 per-cent or less of your full-time employee’s household income then the coverage is considered affordable. Because you likely will not know your employee’s household income, for purposes of the employer shared responsibility provisions, you can determine whether you offered affordable coverage under vari-ous safe harbors based on information available to the employer.

MINIMuM VALuE An employer-sponsored plan provides minimum value if it covers at least 60 percent of the total al-lowed cost of benefits that are expected to be in-curred under the plan. Under existing guidance, employers generally must use a minimum value calculator developed by the U.S. Department of Health and Human Services to determine if a plan with standard features provides minimum value. Plans with nonstandard features are required to obtain an actuarial certification for the nonstandard features. The guidance also describes certain safe harbor plan designs that will satisfy mini-mum value. For more information, visit the Affordable Care Act Tax Provisions for Employers pages on IRS.gov/aca. Subscribe to IRS Tax Tips to get easy-to-read tips by e-mail from the IRS.

Impaired Drivers Most of us think of impaired drivers as those who are under the influence of drugs or alcohol. The National Highway Traffic Safety Administration (NHTSA) reported alcohol-impaired driving was involved in 32 percent of traffic fatalities, translating to 11,773 alcohol-impaired driving fatalities in 2008. However, a driver doesn’t have to be legally drunk to be “impaired.” Other factors may be just as dangerous and these impairments are as alarming as alcohol consumption: • Blood-alcohol at lower levels • Medications • Drowsiness • Cell phones and other distractions

MEDICATIoNS Most of us have probably driven under the influence of drugs without realizing it. Many common prescription and over-the-counter-medications may cause adverse effects such as slowed reactions, sleepiness, nervousness, or agitation—especially during the initial course of treatment. It’s important to heed warning labels on all medications and be aware of the hazards of driving while taking them.

DRoWSINESS Drowsy driving is an increasing factor in accidents. Fatigue and sleepiness may be the result of not getting enough sleep, interrupted sleep, shift work, or untreated sleep disorders such as sleep apnea and narcolepsy. The combination of sleepiness and even a small amount of alcohol compound the adverse effect on psychomotor skills. One study showed that drivers with a low level of alcohol were four times more likely to stray off the road after four hours of sleep than after eight hours of sleep.

CELL phoNES Studies also show that talking on a cell phone while driving can be more dangerous than being drunk behind the wheel. Results of a British study showed that drivers’ reaction times averaged 30 percent slower when talking on a hand-held phone compared to being drunk and nearly 50 percent slower than under normal driving conditions. Drivers were less able to maintain a constant speed and keep a safe distance from the car in front. Help your employees understand the dangers of impaired driving and take advantage of the countless risk manage-ment resources Federated can provide.

~ Provided by Federated Insurance Company

Contact NEDA today to get your 2016 copy of the:EQUIPMENT BLUE BOOK, COMPACT TRACTOR GUIDE,FARM EQUIPMENT GUIDE, ANTIQUE TRACTOR GUIDE

or CONSTRUCTION EQUIPMENT GUIDE.

SPECIALPRICEFORDEALERS!



Call NEDA at 800-932-0607 and ask for Kelli or email [email protected]

for individual prices or to purchaseany of these guides.

crEDIT cArD ProgrAmEmS (ELEcTroNIc mErcHANT SySTEmS)Steven miller866-367-1818, Direct 585-285-9954F: [email protected]

FEDErATED INSUrANcE comPANyProperty & Casualty Insurance (8 states except VT), Health Insurance (PA only)Workers' Comp (All states except NY)matt Johnson at 800-241-4925, C: 606-923-6350Fax [email protected]•www.federatedinsurance.com

HAyLor, FrEyEr & cooN, INc.Health Insurance Program Lauren marecek Mgr., Group Benefit Consulting315-703-3215/800-289-1501, [email protected]•www.haylor.com Jim mcgarvey Supervisor Benefit Consulting 315 703 3239•[email protected]

Physical Damage Insurance (HF&C, Inc.),Rental / Leasing EquipmentPatrick Burns at 800-289-1501, Ext. [email protected]•www.haylor.comWorkers' Comp (Return Dividend Program for NY Dealers only)Property & Casualty Insurance for VT Patrick Burns at 800-289-1501, Ext. [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]

oSHA WorKPLAcE SAFETy comPLIANcE Prog.Dave close at 1-800-932-0607 Ext. [email protected]

PArTNErSHIP FrEIgHT ProgrAmYellow Freight, UPS Freight, FedEx GroundKeith Korhely at 800-599-2902 x [email protected]

DEKrA INSIgHTcErTIFIED SPcc PLANDave close at 800-932-0607 x 235robb roesch at 800-888-9596 x [email protected]

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 DirectorC: 717-576-6794, P: 717-258-1450F: [email protected]

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

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

cHArTEr SoFTWArE BUSINESS SySTEmSmelissa Amen303-932-6875 - Ext. 219www.chartersoftware.com

cErTIFIED BUSINESS VALUATIoNSWestern 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




EquIpMENT INDuSTRY NEWS

During the 8 years that Ag Equipment Intelligence has formally tracked farm equipment dealer consolidations in the U.S. and Canada, the number of big dealers — those operating 5 or more retail locations concentrating on the sales of farm machinery — have increased by 26.5%. By our count, at the start of 2016, 191 dealership groups had at least 5 stores focused on selling Ag equipment. This compares with 151 in 2009. At the same time, the number of Ag store locations operated by Big Dealers has grown by 30%, from nearly 1,500 to almost 2,000 individual store locations. With an estimated 6,800 total farm equipment dealers currently operating in the two countries (which includes shortline-only dealers and those carrying tractors not manufactured by one of the 5 major brands), 28% of all dealers now own 5 or more ag retail locations. While more than 70% of Deere Ag retailers fall into the category of Big Dealers, the other major brands have plenty of room to consolidate. Less than half of Case IH dealers operate 5 or more locations, while 21% of AGCO dealers, 18% of New Holland and 13% of Kubota dealerships are Big Dealers.

~ AEI

Branson Tractor’s parent company up for sale Preferred bidders are being lined up to acquire Kukje Machinery Co., the South Korean Ag equipment manufacturer whose tractors are sold under the Branson name in the U.S. and other markets. Branson Tractors started in Rome, GA, in 1998. It now distributes the 24-78 horsepower tractors through 165 dealers in the U.S. and Canada, with additional assembly and distribution bases in Texas and Oregon.

~ AEI

Nearly 30% of Ag Dealership Locations owned by ‘Big Dealers’

April 15, 2016Vol. 22, Issue 4

• Branson Up for Sale

• Mahindra & Combines

• New Player in Ag Tires

Dur ing the 8 year s that Ag Equipment Intelligence has formally tracked farm equipment dealer con-solidations in the U.S. and Canada, the number of big dealers — those operating 5 or more retail locations concentrating on the sales of farm machinery — have increased by 26.5%. By our count, at the start of 2016, 191 dealership groups had at least 5 stores focused on selling ag equipment. This compares with 151 in 2009.

At the same time, the number of ag store locations operated by Big Dealers has grown by 30%, from near-ly 1,500 to almost 2,000 individual store locations. With an estimated 6,800 total farm equipment dealers currently operating in the two coun-tries (which includes shortline-only

dealers and those carrying tractors not manufactured by one of the 5 major brands), 28% of all dealers now

own 5 or more ag retail locations.The steady pace of dealer consoli-

dation is expected to continue well

Nearly 30% of Ag Dealership Locations Owned by ‘Big Dealers’

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 Media, may be clients of this and other Lessiter Media 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.

Consolidation in the ag equipment industry isn’t limited to dealers. Over the last year or so there’s been a flur-ry of merger and acquisition activity among equipment manufacturers, par-ticularly when it comes to shortline or specialty equipment. The U.S. agricultur-al machinery manufacturing industry includes about 1,100 companies, with combined annual revenue of about $24 billion, according to the VDMA Agricultural Machinery Assn. It is likely more acquisitions and mergers will emerge as the ag market continues to struggle in the current economy.

“Well capitalized industry players have used the current market con-ditions to strengthen their strategic position, by adding technology and

capabilities, product lines and expand-ing their dealer and market access. We expect this trend to continue and perhaps even accelerate over the near term,” says Eric Bosveld of Bosveld and Associates in a recent report.

Sprayer Market. With the recently announced joint venture between John Deere and Hagie Mfg., “a signifi-cant portion of the ‘independent’ self-propelled sprayer market has now disappeared,” says Bosveld. Recent activity in this segment includes the Deere-Hagie deal, Exel’s acquisition of Equipment Technologies (Apache) and, back in 2014, New Holland’s acquisition of Miller St. Nazianz. “Access to distribution is one of the main motivators for the sells as grow-

ers get larger and require better ser-vice,” he says.

A change in distribution model is a significant part of the Hagie deal. For most of its 70 years, the sprayer manufacturer has sold its equipment through a factory-direct model that included in-field service technicians and salespeople. In a video released by Hagie on April 5, Newt Lingenfelter, business and product development manager, expressed some of his frus-trations of the factory-direct distri-bution model with Hagie CEO Alan Hagie. In the video, “Hagie Unfiltered,” Lingenfelter says that while factory-direct has worked for the company’s current product lineup, the product portfolio Hagie will be introducing

Ag Manufacturer Shakeout Mirrors Dealer Consolidation

Continued on page 2

Continued on page 4

0

50

100

150

200

20102009 2011 2012 2013 2014 2015 2016

181 188 191184187

171162

151

Dealers with 5 or More Ag Store Locations in U.S. & Canada

Since 2009, the number of farm equipment dealership groups that operate 5 or more retail locations has increased by 27%. Today, nearly 200 dealers are in the big dealer category.

Source: Ag Equipment Intelligence

2 Ag Equipment Intelligence/April/2016

into the foreseeable future and, con-sidering the current economic condi-tion of agriculture and dramatic slow-down in equipment sales, perhaps accelerate in the year ahead.

“We saw a drop in the number of big dealers in 2013 and 2014 because big dealers were buying or merg-ing with other big dealers,” says George Russell of the Machinery Advisors Consortium. Russell and Ag Equipment Intelligence editors have collaborated on the Big Dealer report since 2009.

“I don’t believe we’ve seen the end of that phenomenon, but I think it has started to slow down because many of the relatively straight-forward M&A situations, particularly on the Deere side, have been captured. These added to the rise in dealer groups with 10, 15 or more ag equipment store locations in 2013 and 2014, but reduced the overall number of big dealers.”

He adds the trend that has been more prominent in the past couple of years is the increase of dealerships at the lower end of the list. In the past 2 years, 14 dealer groups have been added to the Big Dealer list, while a few have dropped off. Of the 14 adds, 7 were John Deere dealers as the company continues its push for fewer dealer-principals. Three of the new dealerships on the list were Case IH retailers, 2 were AGCO, 1 was primar-ily New Holland and 1 was a specialty equipment group focusing on agricul-tural sprayers.

Trends in CE. Since 2014, four Caterpillar dealers — Hewitt Cat, Kramer Cat, Riggs Cat and Warren Cat — have sold off or transferred their ag machinery sales and will concentrate on their construction equipment business.

At the same time, more ag equip-ment dealers are adding construction equipment, mostly compact machin-ery, to their lineups. Meade Tractor, headquartered in Bristol, Tenn., acquired 8 Nortrax CE dealerships

from Deere & Co. in the past year and now has 8 ag and 8 CE stores.

Flint Equipment Co. based in Albany, Ga., includes the Ag & Turf Division and Construction & Forestry Division, each with 8 locations carry-ing Deere & Co. products.

Pape Machinery, one of Deere’s larg-est CE dealers, in recent years has moved into the ag equipment busi-ness in a big way. Today, the dealership group owns and operates 21 John Deere ag locations on the West Coast.

According to Russell, while Deere has traditionally kept its ag and CE dealers separate, it appears to be changing its position. “You have both Deere and Case IH dealers who want to expand, but who are constrained for various reasons, moving into either ag or CE to diversify their busi-nesses. I think we’ll see more and more overlap between the two seg-ments in the future.”

JCB Jumps In. Joining the fray in recent years, JCB, the CE manufactur-er based in England, has been aggres-sive in recruiting dealers to handle its farm equipment products. According to a company spokesperson, JCB has added 44 “ag-focus” dealers with 80 locations in the past 36 months. This is in addition to another 35 “JCB Legacy” ag dealers with 78 locations. In total, today JCB has 80 dealers with

150 outlets in North America.Russell points out, “JCB is the world’s

leading backhoe producer, and they made attempts to get into North America several times over the years, but not with a lot of luck. This time it’s clear they’re making good headway by finding interest among ag dealers.”

Long-time Case IH dealer, Hlavinka Equipment, which operates 7 ag deal-erships in southeastern Texas, last year opened its eighth dealership, but this one will only carry JCB’s com-pact construction and ag equipment.

While more than 70% of Deere ag retailers fall into the category of Big Dealers, the other major brands have plenty of room to consolidate. Less than half of Case IH dealers operate 5 or more locations, while 21% of AGCO dealers, 18% of New Holland and 13% of Kubota dealerships are Big Dealers.

Nearly 30% of Ag Dealership Locations Owned by ‘Big Dealers’...Continued from page 1

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Big Dealership Breakdown by Brand — 2016# Ag Stores in

Ownership GroupOwner Groups

John Deere Case IH AGCO

Corp.New

Holland Kubota

>15 26 19 2 4 1 –

10-15 41 25 10 5 2 –

5-9 124 62 35 12 13 18

TOTAL 191 106 47 21 16 18

Est. Ag Stores* 1,925 1,132 434 209 176 139

Est. Stores - Industry 6,800**

Est. Branded Stores 1,539 900 975 996 1,100

% All Stores in Large Groups 28% 74% 48% 21% 18% 13%

*many dealers carry more than one equipment brand;*includes shortline only dealers & other tractor brands Source: Ag Equipment Intelligence

German Dealer Group BayWa coming to canada One of Europe’s biggest farm machinery dealership groups, BayWa of Germany, is entering the North American market with Claas in Canada. BayWa, a former cooperative based in Munich, is an agricultural trading group with international reach that operates four business units within its Agriculture Segment — Agricultural Trading, Fruit, Digital Farming and the Agricultural Equipment unit, which operates a large network of sales and full service dealerships. Cooperation between BayWa and Claas in Canada will focus on developing sales in Alberta, where they plan to enhance the dealer presence with a flagship dealership to ensure customers in western Canada receive superior product support. At present, Claas is represented in Alberta by a number of independent dealers, including Agriterra Equipment, Foster’s Agri World, Nieboer Farm Supplies, Pentagon Farm Centre, Rocky Mountain Equipment, Smith’s Equipment Sales and Tingley Implements, supplying and supporting Lexion combines, Jaguar forage harvesters, the Claas hay tools line and, at a more limited number of outlets, Xerion high horsepower 4WD tractors. The two parties are working to establish a logistics and service network prior to the opening of the new location in Alberta later this year.

~ AEI


EquIpMENT INDuSTRY NEWS EquIpMENT INDuSTRY NEWS

Consolidation in the Ag equipment industry isn’t limited to dealers. Over the last year or so there’s been a flurry of merger and acquisition activity among equipment manufacturers, particularly when it comes to shortline or specialty equipment. The U.S. agricultural machinery manufacturing industry includes about 1,100 companies, with combined annual revenue of about $24 billion, according to the VDMA Agricultural Machinery Assn. It is likely more acquisitions and mergers will emerge as the Ag market continues to struggle in the current economy. “Well capitalized industry players have used the current market conditions to strengthen their strategic position, by adding technology and capabilities, product lines and expanding their dealer and market access. We expect this trend to continue and perhaps even accelerate over the near term,” says Eric Bosveld of Bosveld and Associates in a recent report.

SpRAYER MARKET. With the recently announced joint venture between John Deere and Hagie Mfg., “a significant portion of the ‘independent’ self-propelled sprayer market has now disappeared,” says Bosveld. Recent activity in this segment includes the Deere-Hagie deal, Exel’s acquisition of Equipment Technologies (Apache) and, back in 2014, New Holland’s acquisition of Miller St. Nazianz. “Access to distribution is one of the main motivators for the sells as growers get larger and require better service,” he says.

TEChNoLogY ADDITIoNS. Bosveld says another key trend in the Ag equipment M&A market is the majors and others acquiring companies or divisions of companies to expand their technology capacity. An example of this would be John Deere’s acquisitions of Precision Planting and Monosem earlier this year, both of which strengthened Deere’s capabilities in seeding technology. Barry Nelson, media relations manager for John Deere, told Farm Equipment that the Monosem deal would help accelerate John Deere’s market reach in precision planting equipment, while Precision Planting extends Deere’s range of retrofit options for planting equipment. Precision farming technology companies TopCon, Trimble and AgJunction all announced acquisitions during the last year.

pRIVATE EquITY gRoupS. Bosveld notes that private equity firms have also

stabilizing commodity prices means increased Emphasis on Efficiency for Farm purchases

Kuhn Group Beats market in FY2015 ‘comparatively’ Although Kuhn Group performed significantly better than the overall market in 2015 thanks to good positioning in Europe and U.S., its managers say it could not escape the effects of a sharp downturn in the agricultural sector. Revenues were down 15% from the equivalent of $1.29 billion in 2014 to $1.09 billion — or by a less painful 8% on a currency-adjusted basis — while operating profit expressed as EBIT was down 28% from a high of $156.5 million to $111 million in 2015.Bucher Industries’ outlook for the current year is inevitably clouded by the ag machinery market. Kuhn managers anticipate a decline in the arable sector, as well as in the dairy and meat sector impacting both segments of its product offering.

~ AEI

been actively entering the ag equipment market as well. “GenNex acquired Salford as a platform investment and has since completed add-on acquisitions to diversify its product line,” he says. Those “add-ons” include Valmar Airflow, a manufacturer of seeding and granular application equipment in May 2015, and the AerWay line of tillage products from SAF-Holland in December 2015. In January, Bestway was acquired by a local investor group, which included two members of Bestway’s management team.

ADDINg pRoDuCT LINES. In December 2015, Demco completed its acquisition of Maurer Mfg., and just this month acquired Thurston Mfg.’s Circle R Side Dump product line. In May 2015, Remlinger Mfg. acquired Sukup Mfg.’s implement line, which included grain drills, row-crop cultivators, shredders, rotary cutters, food plot planters, seeders, grain carts and rippers. Sukup sold the implement line to focus on its grain storage product business, which it had expanded in April 2015 through the acquisition of DanCorn, a leading dealer of grain drying, storage and handling equipment in Denmark. DanCorn had been the exclusive distributor of Sukup products in all of northern Europe. T.G. Schmeiser acquired the Smart-Till product line from HCC Inc. on July 1, 2015, expanding its soil management product portfolio.

~ AEI



Looking for profits in 2016, No-Tillers Look to Reduce spending by 6.5% While most no-till farmers report being profitable in 2015, most are also planning to reduce spending during the 2016 growing season in an attempt to stay that way. In all likelihood, equipment purchases will take the biggest hit as no-tillers plan to cut back on overall spending in the year ahead. Unless market conditions change, it’s more likely they will stay within their budgets for the 2016 growing season.

~ AEI

Mahindra & Mahindra, India’s leading manufacturer of farm tractors, is tapping into Western combine technology to tackle developing markets by securing an alliance with Sampo-Rosenlew of Finland. The deal, underpinned by a 35% shareholding


While most no-till farmers report being profitable in 2015, most are also planning to reduce spending during the 2016 growing season in an attempt to stay that way. In all likeli-hood, equipment purchases will take the biggest hit as no-til-lers plan to cut back on overall spending in the year ahead.

The results of No-Till Farmer’s 8th annual No-Till Operational Benchmark Survey indicate that 67% of the 385 no-till farmers who participated in the poll were profitable last year. This compares with 81% who said they were profitable in the year prior. The percentage of no-tillers who reported losing money in 2015 vs. 2014 was up by 5%, with 16% of respondents finishing the year in the red. Those reporting a flat bottom line more than doubled in last year to 17% of all survey participants.

The current downturn in the ag economy showed up in the growers’ net income with an average net profit per farm at $43,289 — down 40.7% ($29,722) from the $73,011 realized in 2014.

The full survey results appear in the May 2016 issue of No-Till Farmer’s Conservation Tillage Guide, a sister pub-lication of Ag Equipment Intelligence.

Last year, no-tillers estimated they spent an average $452,912 per farm, a little less than the $455,981 spent in 2014. However, this number includes the amount no-tillers are spending on both principle and interest for their loans, while in previous years only interest was tracked. Including the principle brought their overall farm expenditures up by $45,639 from 2014 levels. Excluding the loan amounts from both years, no-tillers spent significantly less in 2015 than in 2014, for an average savings of $48,708. That equates to an average of $342.96 per acre spent last year compared to the previous year’s $380.15 per acre.

Trimming Costs. If the no-tillers’ estimates for spending in 2016 are on target, they will reduce their overall costs by about 6.5%, from $452,912 in 2015 to a total of $423,486 for the current growing season. For equipment, no-tillers expect to trim spending by 17% in the coming year.

In a separate online poll on planned cutbacks in 2016

conducted by No-Till Farmer between Feb. 16 and March 15, 64% of 275 growers said they were planning to cut back on equipment purchases this year. Next on the list was reducing fertilizer, with 39% of no-tillers planning to cut back, and seed and seed treatments, as 36% of the growers say they’ll decrease spending in this area.

No-Till Farmer readers also predict year-over-year reduc-tions in 2016 for lime and soil conditioners by 23.6%, fuel by 12.5%, fertilizer by 8.8%, machinery and service parts by 7.3%, land rent by 5.7% and seed/seed treatments by 5.1%. All other expense will see cuts of 2% or less.

Typically, readers who participate in the No-Till Operational Benchmark Survey tend to be conservative in how much they predict they’ll spend for the upcoming growing season. But in 2015, no-tillers stayed under their estimated budget overall (when excluding loan payments), especially with big-ticket expenses like equipment, fertil-izer, seed/seed treatments and pesticides.

Unless market conditions change, it’s more likely they will stay within their budgets for the 2016 growing season.

Looking for Profits in 2016, No-Tillers Look to Reduce Spending by 6.5%

0 10 20 30 40 50 60 70 80

Seed/Seed Treatments

Herbicides

Insecticides

Fungicides

Fertilizer

Soil Amendments

Machinery Parts

Equipment

Precision Tools

Labor

None

36%

16%

19%

29%

39%

31%

14%

64%

29%

20%

4%

No-Tillers’ Planned Cutbacks in 2016

(% of farmers planning reductions)

Slightly over two-thirds of no-till farmers plan to reduce equipment purchases in 2016.

Source: No-Till Farmer online poll

20,000

34,000

48,000

62,000

76,000

90,000

2011 2012 2013$59.97/A $55.88/A $35.89/A $29.79/A

2014 2015 2016*

$71,252 $70,900

$87,921

$64,938

$41,133

$34,141

No-Tillers’ Expenditures for Equipment 2011 - 2016

*Estimate of 2016 expendituresNo-till farmers will spend less on farm equipment purchases in 2016. If their estimates hold, spending will be at its lowest level in 6 years.

Source: No-Till Farmer survey

National Breakdown of Crop Operating Expenses — 2011-16 2016* 2015 2014 2013 2012 2011

Fuel $13,082 $14,953 $23,666 $27,813 $23,176 $22,786Land Rent $71,308 $75,615 $69,732 $83,692 $75,534 $77,533Seed/Seed Treatments $54,771 $57,726 $63,139 $69,307 $60,521 $56,464Pesticides $32,628 $33,112 $38,416 $43,670 $33,706 $29,065Fertilizer $68,938 $75,555 $85,153 $94,332 $94,713 $86,914Lime/Soil Conditions $4,692 $6,498 $5,968 $5,989 $10,226 $10,878Equipment $34,141 $41,133 $64,938 $87,921 $70,900 $71,525Machinery Parts/Services $22,362 $24,119 $29,617 $31,397 $33,664 $34,450Precision Equipment $3,582 $6,331 $3,468 $4,180 $6,839 $8,864Custom Application/Timing $11,327 $11,382 $8,122 $10,656 $12,860 $13,636Labor $24,593 $24,662 $25,731 $37,318 $36,897 $41,633Loans/Interest $60,550** $59,880** $14,241 $13,443 $20,572 $19,766Insurance $21,512 $21,946 $23,790 n/a n/a n/a

Totals $423,486 $452,912 $422,342 $509,708 $479,608 $473,241*Estimated 2016 costs of production** Includes principle and interest for loan payments.















0 10 20 30 40 50 60 70 80


Herbicides

Insecticides

Fungicides

Fertilizer

Soil Amendments

Machinery Parts

Equipment

Precision Tools

Labor

None

36%

16%

19%

29%

39%

31%

14%

64%

29%

20%

4%





20,000

34,000

48,000

62,000

76,000

90,000

2011 2012 2013$59.97/A $55.88/A $35.89/A $29.79/A

2014 2015 2016*

$71,252 $70,900

$87,921

$64,938

$41,133

$34,141





















0 10 20 30 40 50 60 70 80


Herbicides

Insecticides

Fungicides

Fertilizer

Soil Amendments

Machinery Parts

Equipment

Precision Tools

Labor

None

36%

16%

19%

29%

39%

31%

14%

64%

29%

20%

4%





20,000

34,000

48,000

62,000

76,000

90,000

2011 2012 2013$59.97/A $55.88/A $35.89/A $29.79/A

2014 2015 2016*

$71,252 $70,900

$87,921

$64,938

$41,133

$34,141








reportedly acquired for more than $20 million, will result in the two companies jointly developing combine business in India, China, Africa and the Middle East. Mahindra will also supply the combines to selected markets in which it is already active. Despite being a relatively small manufacturer with turnover in the order of $123 million, Sampo-Rosenlew has successfully sustained a position in the combine market by focusing on small-to-medium capacity machines and reaching mutually beneficial partnerships for distribution, service support and local assembly. The company also produces timber harvesters and forwarders sold in Europe and Black Bruin radial piston hydraulic motors, which in the U.S. and Canada are supplied by North American Hydraulics, Baton Rouge, LA, for vehicles and on-demand, drive-on towed equipment such as logging and general purpose trailers.

TRACToR SALES. On Apr. 2, Mahindra reported that it sold 13,931 tractors domestically in March vs. 10,392 units in March 2015. The company’s total sales for the month were 14,682 tractors. Exports for the month came in at 751 units.

~ AEI

mahindra Takes a 35% stake in Finnish combine Firm

small Tractor sales show strength North American large ag equipment sales continue to be weak, with row-crop tractor sales declining 24.7%, 4WD tractor sales down 48.1% and combine sales dropping 25.5% year-over-year in March. Mid-range and small tractors, on the other hand, showed strength in March, with a 7% jump in sales marking the second consecutive increase after 6 months of declines. Compact tractors sales were also up 28.4%. Mircea, “Mig” Dobre, an analyst with Baird, notes that this is the strongest increase for compact tractors in 18 months. U.S. and Canada large tractor and combine sales decreased 28% year-over-year in March, but that was up from the 39% decline in February. U.S. sales were down 22% year-over-year, while Canadian sales dropped 33%.

~ AEI


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