January 28, 2021

COVID quarantines, grain rallies keep equipment dealer busy

MENDOTA, Ill. — What do you get when a large portion of the population is stuck at home, for work and play, and grain prices take an unexpected ride up in the late fall?

“We’ve had a ton of activity on the buying side all fall and it continues right now,” said Chris Rupiper, the CEO of Prairie State Tractor, based in Mendota.

Prairie State Tractor was formed from the merger of Kelly Sauder Rupiper Equipment LLC and Holland and Sons.

A combination of factors — starting with quarantines, lockdowns and businesses moving employees to work-from-home situations, ultimately on a permanent or long-term basis, then continuing with low interest rates, a glut of aging farm equipment and a surprise late-fall rally in the commodity markets — have kept business booming for farm equipment dealers.

One sector for implement dealers that has seen steady growth over the last several years is the business-to-consumer market, including lawnmowers and small tractors under 90 horsepower.

Rupiper said that market has seen a steady increase, but it took off in the late spring.

“COVID had a dramatic impact on that market. We started noticing it heavy in the spring as people were stuck at home. They were finding all the projects they wanted to get done, so that was a direct impact on all of the homeowner equipment, large property equipment and handheld equipment, like Stihl, that kind of stuff,” Rupiper said.

The dealerships chalked up a record year of sales of Stihl equipment and ran out of lawnmowers at one point.

“It was an availability problem on the (original equipment manufacturer) and also that we sold out. We reached a point in the summer where we had the lowest amount of used lawnmowers we’ve had in a long time; people were just buying what they could find,” Rupiper said.

On the farm equipment side of the showroom, low interest rates, strong demand and age have propelled sales.

“There’s a glut of equipment built in that 10-years-ago time frame. That was some of the largest amounts of shipments on tractors and combines and everything. That equipment is old. It’s aged and it’s reaching probably the oldest average age in the fleet in a long time. Farmers have been looking for a reason to update and get stuff swapped and rolled over and then the prices just helped them along,” Rupiper said.

A surprising bump in commodity prices in late fall, coupled with low interest rates, and the traditional buying in preparation for tax time kept sales strong.

“The ag market has taken a 180 since September, it’s just gone nuts. There’s been a huge reaction from the customer base because they had that big change in the markets and grain prices did a run up going into harvest, which is typically not the case. We’ve had a ton of activity on the buying side all fall and it continues right now,” Rupiper said.

Interest rates at record lows and deals offered by manufacturers also added to the buying frenzy for all types of equipment.

“When we look at the homeowner or large property owner segment, a lot of those products had zero percent deals going on all year on a lot of that and customers jumped all over those. When you start talking about large ag customers, interest rates are historically low, they are looking at ‘I can update — and get a lower interest rate,’ so that makes it all the better because it helps their cash flow,” Rupiper said.

Going forward, Rupiper said he expects strong sales to continue, at least into the first part of 2021, and for all segments of the market.

“Everybody’s meeting with their tax accountants, they were going in and figuring out what they had to spend in 2020. All the sales managers have been active ever since harvest finished up. It’s probably going to continue through the first of the year and probably into 2021 as they push things into 2021,” Rupiper said.

On the lawn and home side, Rupiper said he sees those sales continuing as more people move to working from home on a permanent basis — and that prompts many to trade the city for the country.

“If they are going to a work from home type of environment for the long term, there are more people looking at buying homes in rural areas. I would suspect, on the equipment side, that there will be tailwinds from that as more people are trying to move out of cities, maybe into smaller towns, maybe have some property and need equipment,” he said.

The merger of the two northern Illinois dealerships becomes official in late January and strong sales have been a good omen for the start of the new business.

“It’s going to be interesting to see what 2021 is going to bring to us but we are definitely glad that the market is doing what it’s doing right now because it helps us getting Prairie State Tractor off the ground and running,” Rupiper said.

Jeannine Otto

Field Editor