According to the Association of Equipment Manufacturers (AEM), there’s still very little relief in the supply pipeline for components needed to complete manufacturing and farming equipment. Consequently, there are “nearly complete” pieces of farm and construction equipment sitting on manufacturing lots waiting for components. For some, they may be as basic as a 7-pin connector for wiring harnesses. Others parts, some ordered more than a year ago, still haven’t shown up on “shipped” reports.
Some companies, like farm equipment manufacturer Unverferth has gone so far as to create “rework teams” whose jobs are to add missing components to machines that have been languishing in storage. Others have procurement staff scouring sources for acceptable component replacements.
Dealers are still battling shortages in tires, steel components and computer chips for existing customers’ equipment.
According to AEM, the situation was supposed to have improved by now, but hasn’t. They add that while it’s bad for farm equipment, it’s even worse for construction equipment. More than 95% of their members say they’re experiencing “major” supply chain issues.
If that’s not enough, suppliers and manufacturers are getting slammed with major price increases. And salaries and bonuses have also had to rise in order to get/keep factory workers.
Consequently, used farm equipment is selling at an all-time high.
A farmer with seldom-used equipment can quickly turn that gear into the cash needed to acquire equipment that’s really needed. The downside is that the “used iron” is also pricey- and getting even more so the longer shortages exist.
Farmers, being very experienced with market realities, are very aware that being forced to pay a premium for used equipment today doesn’t guarantee that same price stability a month from now. If the supply chain eases, demand for used gear will slow- and prices will fall.
So they’re following the advice Amazon’s Jeff Bezos shared last week: if you can hold off purchases, it might be a good time to do just that.
In the meantime, Purdue University’s Ag Economy Barometer reports that “insufficient supplies have impeded” producers’ overall operations. According to that barometer, farmers share another major concern with the outdoor industry: interest rate policies.
Despite farm income having rise over the past five years, farmers are still being hammered by high input (planting) costs and falling commodity prices. They’re accustomed to fluctuations in commodity prices, but the additional strain of acquisition of new gear or parts for existing gear, coupled with rising interest rates, has injected a lot more stress to an already tough profession.
“A year ago,” says Curt Blades of the AEM, “we thought the supply chain issues would have improved by now. That didn’t happen.”
There are similar stories throughout the outdoor industry as well. Last week, one manufacturer told me he was machining parts from aluminum bar stock because extrusion “isn’t an option right now.” As he explained it, “I was told that even if I had my order in right now, it would be a year before I could hope to get parts. So…I’m machining.”
Speaking of sales….. the latest information from the National Association of Sporting Goods Wholesalers (NASGW) via their SCOPE report says there’s a steadily building demand for shotguns.
Not the fine-figured collectibles or ultra specialized completion models, “field grade” guns used for hunting.
As the NASGW explains it “2020 and 2021 were both strange years for gun sales. The pandemic and political unrest inspired many to look into options for home protection.” Shotguns, according to their report, were options-and defensive models sales increased accordingly.
Based on sales numbers through September 2022, shotguns have grown from 8.5% to 9.7% of the firearms market. But the highest increase among those shotguns wasn’t in personal defense models, it was field guns. According to SCOPE, field gun sales are up 15.4% over 2021.
According to the NASGW, Ryan Link, GMM/Director of Merchandising at Big Rock, their numbers affirm the SCOPE findings. “Participant growth and consumer demand continues to be elevated in semi-auto shotguns coming out of the Covid period,” Link said. “The supply in the semi-auto segment to meet this new demand, while improving, continues to be constrained.”
He was also sure to highlight growing shotgun popularity. “All shotgun segments continue to perform above historical 2019 levels and points to the increase in the number of participants in the sport that are leaning into this segment currently for their sporting needs.”
According to the SCOPE report, semi-auto shotguns are outpacing the venerable pump-actions, but the gap closed in 2022. Pump-actions rose from 33.3% of the market in 2021 to 37.4% in 2022.
It’s also only fair to note that tactical guns -whether they be pump or semi auto- are still nearly three-quarters of the overall shotgun market.
We may be returning to the fields, but personal/home security is seldom far from our consciousness.
As always, we’ll keep you posted.
— Jim Shepherd