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Harvesting the benefits

Farm-equipment suppliers are seeing big surge in sales thanks to bumper crop

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Agriculture-related firms such as Westeel have seen sustained sales growth as farmers invest in their infrastructure while they've got the cash.

BORIS MINKEVICH / WINNIPEG FREE PRESS Enlarge Image

Agriculture-related firms such as Westeel have seen sustained sales growth as farmers invest in their infrastructure while they've got the cash. Photo Store

Farmers aren't the only ones benefiting from last year's record grain harvest.

Spokesmen for two local firms that manufacture grain bins and/or grain-handling equipment -- Westeel and Ag Growth International -- say their firms have seen a surge in sales in the wake of last year's bumper crop in Western Canada.

"And this is not just an influx of sales for a couple of months," said Ryan Baldwin, vice-president of sales and marketing for Westeel. "They (farmers) are looking at building (grain storage) systems for the future. So I think they (sales) should be good for a while."

For competitive reasons, Baldwin wouldn't disclose how much sales of agriculture-related products have increased for Westeel, which manufactures galvanized-steel grain bins, hopper tanks and smooth-wall hoppered bins, as well as custom-made storage tanks for the petroleum and industrial sectors.

"But the growth is very significant," he added.

It's a similar story at Ag Growth International (AGI), a Winnipeg firm that manufactures a variety of different types of grain-handling equipment, including augers and belt conveyors, as well as some grain bins.

"Our primary business is grain-handling equipment... and our business is very strong," said Steve Sommerfeld, AGI's executive vice-president and chief financial officer. "There is a lot of grain backed up at the farm gate, and the more grain there is on the farms, the more likely they need to use grain-handling equipment." AGI also manufactures commercial grain-handling equipment for grain elevators and other large grain-handling facilities.

"The environment there is excellent, too, and has been for a while," Sommerfeld said. "There are a lot of infrastructure improvements going on."

Farm-equipment retailers are also seeing an increase in sales, although not to the same extent as manufacturers such as Westeel and AGI, whose divisions include Rosenort-based Westfield Industries, the world's largest manufacturer of grain augers.

"We haven't seen a spike in sales. But is business strong? Yes," said Bob Mazer, president and CEO of Brandon-based Mazergroup, Canada's largest New Holland dealership network with 13 dealerships in Manitoba and southeastern Saskatchewan.

Mazer said 2013 as a whole was a good year for ag-equipment sales because farmers also had a good crop in 2012 and grain prices remained high through the first half of 2013. And 2014 should be another good year, he added.

Mazer and John Schmeiser, executive vice-president and CEO of the Canada West Equipment Dealers Association, said while the size of the harvest and grain prices have an influence on equipment-buying decisions, they aren't the only factors farmers take into account. Especially the larger farm operators.

"It's more about keeping up with the new technology... and maintaining their equipment," Mazer said.

Schmeiser said some farmers also like to replace their equipment once the warranty expires to avoid major repair costs down the road.

He said farm equipment sales on the Prairies have been climbing at a double-digit pace for much of the last six years, with the exception being 2013 when the gain was in the high single digits.

"But that (a single-digit gain) is still phenomenal when you realize you're comparing last year to 2012, which was an extremely high-volume year... " he added.

Gary Bohn, branch manager for the Enns Brothers John Deere dealership in Portage la Prairie, said he's also anticipating another good year in 2014.

An added bonus is the dealership also will be moving into a new 61,000-square-foot facility next winter that will be more than triple the size of its existing building. Bohn said the expansion project has been in the works for several years and has nothing to do with last year's bumper crop.

"We've just grown as a company and we've outgrown it (the existing building). Our showroom is small and we can't get enough (volume) through our repair shop."

The new building will also have more showroom space for the recreational equipment the dealership sells -- things such as snowmobiles, all-terrain vehicles (ATVs) and three-wheel motorcycles -- and will serve as an equipment-setup centre for all nine Enns Brothers dealerships in the province.

murray.mcneill@freepress.mb.ca

Republished from the Winnipeg Free Press print edition January 25, 2014 B6

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