Landpower boss flags challenges for field days
In the final instalment of Mandy Parry-Jones’ interview with Merv George, the Landpower boss says the way machinery companies are interacting with farmers is changing.
MERV George knows the Australian machinery industry landscape better than most. The Landpower Australian director is at the helm of one of the largest privately owned farm machinery distributors in Australasia, which includes a growing network of branded CLAAS Harvest Centres and independent dealers. Over almost four decades the company has established itself as a leading provider of agricultural machinery, with long-standing brand partnerships with European manufacturers like CLAAS, AMAZONE, Seed Hawk and Grimme. It services a wide range of farm sectors, offering combine harvesters, potato harvesters, tractors, hay and forage equipment, spreaders, sprayers and tillage tools. Mr George says the continuing evolution of farming and machinery is ushering major changes in the industry which will present challenges and opportunities in the years to come. He says machinery manufacturers and distributors are reconsidering the value of exhibiting at field days. “It's very expensive to go to for dealers and distributors but they are a way of life for the country. There is a certain amount of pressure to support field days as they are supporting the agricultural community's way of life,” he said. But according to Mr George, where once there were orders on the day that doesn't happen anymore and the machines cost a serious amount of money to transport to the display site, especially considering the location of some of the field days. “Many of the shows have become side shows and the people still go to them as a day out but the machinery becomes something to sit on and comes second as part of the day out,” he said. “The farmer will always want a product cheaper … in my travels around the world, they are all the same. They are very nice people but all of them want it cheaper. “So if you want to take cost out of the system having fewer dealers will help – less buildings, less overheads, less cost but the delivery cost from the manufacturer in the US or Europe. Mr George said the industry was always under pressure to reduce its costs and that going to field days and regional shows is a significant with a very marginal reward. “Field days where you can display your products working have some value, but I was at field day recently which cost a lot of money to attend. A lot of money, a lot of organising but very few people,” he said. Mr George believes traditional machinery field days are under threat as the interaction between farmers and the machinery industry changes. “More successful today is where manufacturers run their own display days. So you can have a ‘come and drive day' where you have a range of the manufacturer's tractors or products in a field,” Mr George said. “They are more successful because there's more up-time for the farmer in the cabin where they can actually use the machine and compare it to what they own in an environment where they are with experts. Whereas a field day allows them to sit in a very fancy cab and I'm assuming they've all got fancy cabs.” Mr George said broadacre croppers, dairy farmers and the forestry industry all shared the goal of producing more volume, more efficiently. He said Landpower saw value in taking innovative farmers offshore to places like Europe to help develop skills and knowledge in relation to the latest broadacre technology. “They are people that are leaders, people who want to learn. They're probably high achievers of the industry,” he said. On the subject of education, Mr George said the isolation of many farmers and their families had a more of a positive impact on their schooling. “By definition they live in a rural environment many hundreds of kilometres from major towns. Often the parents can't drop the kids off to school, there's no public transport that they can catch to school so many of them are enrolled at the finest schools Australia has to offer,” Mr George said. “This often leads to courses in some of the best universities that the country has to offer. These kids are well educated and savvy and once they go back home they bring with them degrees in agriculture, economics or science and put these to good use in their farming communities and their own properties.” Mr George said a similar level of tertiary
qualifications was not filtering through to the machinery industry in the same fashion. “History would show you that most of people that have come into the (machinery) business have worked their way from trade school,” said Mr George. “There are very few people in our side of the business that are coming through the university system.” “The problem with the industry today is how to attract graduates and improve that whole brain horsepower? How we do that is the challenge for our industry because is it viewed from the outside as a sexy business to be in?” Another change tipped to appear on the horizon for the industry is the way farmers think about their ownership of their equipment. He says the machinery manufacturers and retailers need to consider the optimal period of first time ownership, which currently it stands at around three years but should be more like five years, he says. “It's been traditional for sales people to move the machinery on after three years, replacing the farmer's harvester or tractor after three years but this causes a problem, as there is a very small market for large tractors or combine harvesters and an even smaller one for secondhand ones,” Mr George said. “The first owner has look at five or six years of ownership, not two and three. He should be locked into a contract for five or six years with a service contract, so he doesn't have to worry about the service. That's the future in my view.” “What happens then is that the machine has been written down to a lower value after five or six years, and there is a much better secondhand market with farmers who want a cheaper machine.” Mr George believes that as the market grows with larger corporate farms and larger private farmers they are going to be smarter and telemetry will pay its part and machines will have to stay longer and be more efficient with less breakdowns because of preventative work. He predicts dealerships will stock fewer parts in the future because they won't be able to afford to carry too many parts, and dealerships' glossy showrooms will gradually become a thing of the past. “The idea that we park a combine harvester to climb around in Moree is probably going to finish,” said Mr George. “It's a cost to the dealer that he can't afford.” “These machines are worth so much money it makes more sense for those customers that are getting serious and want to see the product to fly them to a more central location where they see and feel the product.”
Landpower Australia director Merv George.
Landpower’s Melbourne headquarters.
The future of field days is being questioned by the machinery industry.