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Farm Equipment

Ag equipment dealers get bigger

Greatest growth in dealerships with more than 15 stores


BROOKFIELD, Wis. — The largest growth of agricultural equipment dealers has occurred with those who operate 15 or more stores, according to the 2020 Big Dealer Report.

This is the 10th anniversary of the Big Dealer Report co-authored by Dave Kanicki, editor and publisher of Ag Equipment Intelligence, and George Russell, managing member of Machinery Advisors Consortium.

“A Big Dealer is a dealership group with five or more ag equipment retail locations and this definition is not arbitrary,” Kanicki said. “It is based on our experiences, as well as discussions with dealers that we determined dealerships with five or more store locations are a tipping point for most dealer organizations that required significant changes.”

Big Dealers are not based on revenue, but ag equipment locations.

“The dealers with five to nine stores have decreased the last 10 years from 116 dealer groups to 99,” Kanicki said. “The 15-plus store owner group, which has the most growth went from 12 groups to 47 groups in 2020.”

“The dealers consolidation has progressed during the last decade with 171 Big Dealers in the U.S and Canada in 2011 to 191 dealer groups in 2020,” he said.

The group with 15 to 19 stores has increased by 360% in the last 10 years, Kanicki said.

“And the dealerships in the five- to nine-store category dropped by 23% since 2011,” he said.

“Dealers of every major brand except AGCO have consolidated at a different pace,” he said. “Deere has been the most active growing from 75 groups to 96 in 2020.”

The state with the largest number of Big Dealers is Texas.

“That is probably a function of the geography the dealers have to cover,” Kanicki said. “Texas is followed by Iowa with 15 Big Dealers and California with 14.”

In addition, Kanicki said, Texas, Iowa and California are also the three states that produce the most revenue in agriculture.

“The numbers we have in the report are not precise,” George Russell said. “The farm equipment dealers typically overlap with outdoor power and construction dealers, so there’s always going to be gray areas for the lines a dealer carries.”

In addition, Russell noted, scale does not equal success.

“It helps — about 50% of the reason for the success of Big Dealers is the economies of scale, but there are other reasons for success,” he said.

Consolidation of ag equipment dealers is driven by the consolidation in farming, as well as the consolidation among equipment manufacturers, Russell said.

“The age of the dealer principals is also a driver of the change with the baby boomer selling,” he said.

“In 2011, one of every five stores was associated with a Big Dealer and today it is one in three,” he said. “There are still a lot of owners in the one to five store category with 95% of the total, but Big Dealers have the highest number of stores.”

Dealerships with fewer stores tend to have a lot brands and they operate in a defined area.

“As the dealerships get bigger, then tend to have fewer ag brands but cover a broader area,” Russell said.

“We’re in a cyclical business, so with diversification when farm equipment is down, construction or rural lifestyle might be up,” he said. “And some dealerships have geographical diversification.”

Farm equipment is the core industry for small dealers, Russell said.

“As dealerships get bigger, we see dealers working in non-contiguous areas or moving to multiple industries to include construction or outdoor power,” he said.

For more information about the Big Dealer Report, go to www.agequipmentintelligence.com.

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