What a difference a couple of years make. The agricultural economy was floundering so badly two years ago one World Ag Expo exhibitor said dairymen “actually quit buying cows.” When milk prices are low, dairymen normally buy more cows to increase production.
No such stories this year at California's biggest farm show in Tulare, Calif., in mid-February. In 2005 everyone was in the chorus singing “Happy Days Are Here Again.”
“This is a good show for us” said Chris Parrigon, sales representative for cattle feeding equipment maker Kirby Manufacturing in Merced, Calif. “It is a lot different than it was two years ago. Farmers, ranchers and dairymen have a little money in their pockets and are looking to upgrade or improve their equipment.
“The way things are going it should be a good year this year and next year looks like it will be just as strong,” said Parrigon.
It was Cor Broekhuyse's first visit to the Tulare, Calif., farm show, but he is no stranger to California agriculture as chief executive officer and regional head of North and South America Rabobank International.
Rabobank purchased Valley Independent Bank (VIB) about two years ago. It is a small bank in the heart of California's central valley. Broekhuyse is the bank's chairman.
“We think California is the best part of American agriculture,” said Broekhuyse. Rabobank has made a considerable investment to back its conviction. When Rabobank purchased VIB, ag loans totaled $100 million. Two years later VIB loans total $750 million. Rabobank was at Tulare to bolster its ag lending portfolio.
Rabobank is a Netherlands-based bank with $500 billion in assets and 9 million customers worldwide. It has been involved in world agriculture for years, providing banking services for large agribusiness companies.
“When we decided to take our services to the farm level, we made a very conscious decision to start in California because of the diversity of crops grown here without subsidies and marketed worldwide,” said the international banker. “California farmers have long been exposed to the world market and are astute operators. If California were a country, it would be the largest agricultural economy in the world.”
Broekhuyse added, however, California agriculture is not immune to economic cycles, but farmers and ranchers are better equipped to handle those cycles.
“The capital needs are greater for California farmers than in other parts of the country, partly because of the size of the operations and partly to sustain farms through the inevitable economic cycles,” he said.
Like other exhibitors at the farm show, the banker said “people are investing again in agriculture, buying farms and investing in equipment.”
“It is as good as I have seen it in California,” said Richard Andrews of Bakersfield, territory sales manager for AutoFarm.
“People are in a buying mood, looking at what is out there. Farmers made money last year, across the board. There was a great cotton crop; good grape crop and an excellent almond crop. Farmers are certainly looking at what do to with that capital they have earned.”
However, Andrews said farmers are not interested in adding cumbersome debt and like to be self-financed, even in today's high cost of California farming. While they are willing to spend this year, Andrews said sizeable chunks of this good year's receipts are going into the bank for that inevitable rainy day.
Top deere year
For the first time in the 25 years he has been with Deere, Barry Nelson, public relations manager for the world's largest equipment manufacturer, said all three Deere divisions had record years.
Craig Weynand, Deere sales manager for branch parts and service based in Reno, Nev., said, “Net cash farm receipts are up for most crops in the West. Tulare is a major show for us, especially in reaching the tree and vine market.”
Weynand said interest continues to grow in precision agricultural guidance systems and Deere has introduced what Craig calls an entry level tractor guidance system that sells for only $4,500.
It has 13-inch accuracy, unlike the higher price sub-inch systems that can run $15,000 or more per unit.
“When you are running large 60-foot to 80-foot wide implements like chisel plows and disks, you don't need that sub-inch accuracy,” he pointed out. “If you are overlapping just 10 percent on each side with a 60-foot implement, that is six feet overlap on each pass. If you can eliminate that, you will save a lot of fuel, chemicals and labor costs.”
While precision agriculture has dominated farm news recently, Weynand said only about 10 percent of farmers have adopted guidance systems. “There are still a lot of people out there who are waiting to see the value of precision ag technology.”
There was a definite upbeat mood at this year's Tulare farm show. After all there were mud puddles in the parking lot and in spots on the show grounds. That means there has been rain and rain always makes farmers perk up.