The Rural Voice, 1979-11, Page 9purchased for one half or better less than the machinery cost
when new.
For example, used combines can be bought in the $10,000
range which would cost $40,000 to purchase new. Ralph Shantz
estimates most of the equipment he and his staff sell is from five
to 15 years old. He says the average life expectancy fora piece of
farm machinery is about 15 years, although there are "still some
Ralph Shantz stands with a row of the harvest
equipment found on his lot outside the village of Alma.
good units around" that are older than that. He said when
reconditioning machinery, his staff "try and stay in a class of
machinery that still has a reasonable life span."
One popular item with buyers is combines, and these are
reconditioned and sold with a 50-50 warranty in most cases. This
means the combine is euaranteed for 100 acres or the season,
whichever comes first. Althougn the tarmer loses any capital
investment tax credits in buying used equipment, he does save a
substantial amount by purchasing machinery on its' second time
around.
Another big seller naturally is reconditioned tractors which
Ralph Shantz says are purchased by hobby or weekend farmers
or by people wanting a third, fourth or fifth tractor for their
operation.
USED EQUIPMENT
The dealer is also finding there's an increasing demand for
used parts for machinery, as well as the equipment itself.
Although the lot always carried the fast moving machinery parts
in stock for equipment they sold, Mr. Shantz says as the prices
for new parts increase, and they are sometime difficult to obtain,
used parts are in demand. While he doesn't make a business of
selling parts, some of the machinery which comes in as trade-ins
is good only for parts, so now the Shantz lot carries used, as well
as new parts.
In addition to ordinary used equipment, Ralph Shantz also has
discovered a market for machinery that's considered obsolete in
this part of the country. For example, he used to buy an older
model of baler, no longer manufactured, which was still popular
with American farmers and a grain binder, considered obsolete,
which can be used for harvesting sesame seed.
VENEZUELAN CONTRACT
The grain binder and drill deal is one of the more interesting
ones in the Shantz story. Over 15 years ago, Mr. Shantz had a
"chance" meeting with someone from Venezuela who was
visiting in the Alma area, looking for equipment no longer on the
market. Mr. Shantz was able to locate some of the binders and
drills used in the sesame seed operation, and he's been shipping
equipment to Venezuela ever since. Although he considered
exporting equipment to other South American countries, the
export trade involves a good deal of red tape, so he hasn't
expanded into that field. He does, however, import to and export
equipment from the United States.
But the area where the dealer does most of his selling is a little
more local, although Ralph Shantz says "we cover Ontario". He
adds farmers have come to Alma to purchase equipment from as
far north as Sault Ste Marie and New Liskeard and as far east as
Ottawa.
Most farmers have specific equipment in mind when they
come to the lot, and if they can't find it in stock, the Shantz staff
will watch for it at future sales.
LOCATING USED EQUIPMENT
Where does Ralph Shantz find the equipment in the
quantity he deals in? Admitting he depends on a lot of "good
contacts" for tips, Ralph Shantz says he buys at consignment
sales, farm auctions, from individual farmers and takes
equipment in as trade-ins. He'll also import machinery from the
U.S. particularly states like Ohio and Indiana, if the price
permits. Unfortunately, as in many other businesses, the
devalued Canadian dollar has hurt trade with the United States.
Mr. Shantz points out one interesting side note, however, of
today's inflation. Some tractors, as an example, sell for as much
or even more today than they did several years ago. On the other
side of the coin however is the fact if the farmer sells this used
equipment at a profit, but then goes out to buy a new tractor
or combine, he's going to feel the pinch of inflation anyway.
Although we hear a good deal of talk about warranties and
guarantees on farm equipment, Ralph Shantz said in his
business he finds "it's usually the price factor that determines
whether you buy new or used equipment," rather than the
servicing policy offered by the dealer. His staff do service what is
sold on the lot however.
Mr. Shantz often buys his equipment from other dealers who
have had the machines traded in, but who don't have the time for
their staff to overhaul the used equipment.
In the years since he's been selling equipment, Mr. Shantz has
found a different demand ;n different parts of the province. For
example, in the more affluent farming areas or cash cropping
areas, the trend is for farmers to buy new equipment due to the
large acreage they have to cover. Smaller and older and
sometimes even obsolete equipment sells better in areas where
farming isn't done on such a grand scale. Around Alma, for
example, general mixed farming is the rule of thumb.
In turning over such a Targe number of equipment lines,
Ralph Shantz says his staff soon gets to know the good and bad
items in a line of machinery. Also, he says the end users
(farmers) also let them know which are the good machines. If a
farmer comes in, the staff will reocmmend what they feel is best
for his requirements, but Ralph Shantz says most people know
what they want before they come to see him.
THE RURAL VOICE/NOVEMBER 1979 PG. 1