Just off Highway 64 East in Augusta, massive red tractors and other agricultural equipment glint in the winter sun. Inside at Eldridge Supply Co., customers and staff members chat at the parts counter, talking about the latest news. There’s a low-key but steady thrum of activity throughout the building.
Even during a pandemic, equipment and parts sales are still ongoing at companies like Eldridge Supply. Sales have even improved in many cases.
Chris and Mark Eldridge are the ones keeping that activity going at their family-owned ag dealership. A fourth-generation, family-owned business, Eldridge Supply operates Case IH dealerships in Augusta, Brinkley and West Helena, as well as a used parts and salvage business.
Eldridge Supply has known tough times, being founded in the midst of the Great Depression when Rolfe Eldridge — Chris and Mark’s great-grandfather — borrowed $65 from his grandfather to buy the local International Harvest contract. Since 1933, the company has navigated thick times and thin, adapting to unique challenges like the COVID-19 pandemic.
The equipment industry, like the world itself, has changed dramatically since Rolfe’s days. Globalization has opened up new markets for companies like Eldridge Supply, while also increasing the complexity of the industry. Gone are the days of only worrying about local issues. The agricultural equipment industry is a global affair, even for small-town Arkansas companies.
But one thing has not changed — the interdependence of equipment dealerships and the farmers they serve. According to Mark Eldridge, vice president of sales, equipment dealerships are part of an agricultural trickle-down economy, in which the dealerships benefit from profitable years in farming.
“So goes to the farmer, so goes our business. If they’re getting a good crop or if they’re getting a good price for their crop, then they will eventually…buy and update their fleet so that money will trickle down,” he said.
Doug Abel, sales manager for Prairie Implement Co. in Stuttgart, agreed, noting that crop prices were the single biggest determinant in the agricultural equipment industry. “Crop prices impact our business more than anything else. When farmers make money, they update equipment,” Abel said.
Due to their intertwined nature, the agricultural equipment industry is a cyclical business like farming itself is. Mark Eldridge said the industries are currently in a down cycle, which has lasted since roughly mid-2014, after an almost decade-long up cycle in the mid-2000s and early 2010s. As they talk to more farmers, the Eldridge brothers see hope and optimism for an uptick in the future with improved forecasts for crop prices.
This down cycle has influenced how farmers approach buying equipment, according to Mark Eldridge. After leaving the equipment industry for five years and getting back in 2005, he found that equipment costs had soared and attitudes toward building equity had changed.
“When I came back to the business, things had gotten more expensive, and that was certainly eye-opening. But the high finance aspect of our business was really kind of shocking that nobody wanted to build equity and own it,” he said.
Chris Eldridge noted that many local farmers are now taking a diversified approach to equipment ownership, building equity in some pieces while operating some on a cost-per-hour basis and trading in more frequently on other pieces.
Despite this, equipment sales, including tractors, appear to be on the rise, according to the latest industry data. The Association of Equipment Manufacturers (AEM) reports that farm tractor sales were up 17.9 percent year-to-date in 2020, and combine sales were up 5.5 percent. Tractor sales in December 2020 were up 26.8 percent compared to the same time in 2019 across the United States.
“The year 2020 was difficult on a number of fronts, but despite uncertainty in the overall economy, the ag equipment market has been pretty strong,” Curt Blades, senior vice president of ag services at the Association of Equipment Manufacturers, said in a statement. “The growth we saw in farm tractors and combines was pleasant news, driven by largely smaller equipment. Overall, ag equipment manufacturers sold nearly 50,000d more tractors and combine units in 2020 than in 2019 across North America.”
Abel told Arkansas Money & Politics that many farm equipment sales in his region have been for increasingly bigger pieces of machinery. Farmers, he said, are buying fewer pieces of equipment, but the ones they are buying are bigger and more expensive.
“2020, you might say, was a typical year. [We] didn’t sell quite as many tractors, but other equipment, repairs and parts sales made up the difference. 2021 looks to be a good year,” Abel said.
Agricultural equipment dealerships, like many farmers, are diversifying their product offerings in response to the trend of buying fewer but bigger machines. Eldridge Supply had a multiple-decade head start on the trend, having launched a used parts and salvage operation — the only mainline dealership in North America with a used parts department that the brothers are aware of — in the early 1980s. Chris and Mark’s father started the used parts business in reaction to the notorious 1980 farm crisis, which saw falling crop prices due to substantial surpluses of farm commodities, which resulted in heavy farm debt and ultimately mass foreclosures.
“One of the things he did, he said, ‘If I’m going to get my money out of my used machinery, I’ve got to tear it down.’ We dismantle all makes, all models, all types of equipment,” Mark Eldridge said. “We will tear it down at another facility about a mile west [of the August dealership]. We can totally tear it down. We can tag and bin-locate the parts and put them on the shelf, and we put them online.
“I think in any business you need to be diversified. We’re always looking for an edge, especially in a business like farming. If you’re solely going to depend on selling new equipment and the commodity cycles, that’s going to be a tough way to make money. You’ve got to have something that you don’t have to count on… the commodity prices. You’ve got to have something that brings people in the front door.”
Instead of diversifying, Wallace Equipment in Fair Oaks (Cross County) took the opposite route in its main business, specializing in stripper headers, offering both new and used products. However, the company also runs a manufacturing side, producing skid steer attachments.
“Ours are pretty simple pieces of equipment. They don’t have computers like combines and tractors,” owner Ben Wallace said. “We have customers that still bring us their headers every year for us to work through and get them ready for the harvest.”
While industries across the world have been turned upside down by the pandemic, the ag equipment industry has been relatively, if curiously, unaffected. The Eldridges, along with Wallace and Abel, reported little impact in operations due to COVID-19, aside from taking precautions to minimize the spread of the virus such as installing sneeze guards in stores and providing sanitizer products.
At River Valley Tractor in Bryant, sales manager Travis Carlow saw a significant shift in customers in 2020. During the early months of the COVID-19 pandemic, Carlow saw decreased sales as people settled into the realities of quarantine, but online sales quickly picked up. One of the biggest changes was the rise of sales to “weekend warriors.”
“Surprisingly enough, I feel like there was a big transition after COVID hit harder with people staying home, and with that, they were wanting to do stuff around the house. We had a couple of guys that I talked to personally that were starting gardens and wanting small tractors to keep up with it. COVID affected us severely, but there wasn’t a downturn in business,” Carlow said.
Both Carlow and the Eldridges increased their online sales as a result of the pandemic. While both companies had established online stores, customers became more familiar and willing to use this technology during the pandemic. For Carlow, this increase in online sales could herald a shift in how the equipment dealerships conduct business.
“I think there’ll be a further transition to online sales through dealerships. I don’t think the dealerships are going away. There is going to be a need for a brick-and-mortar facility, whether it be parts warehousing or service,” he said.
Many customers, Carlow said, have a more “old-school mentality” toward equipment purchases, wanting to test-drive the machinery before making the purchase. He foresees major changes in the next five to 10 years in how the agricultural equipment industry does its purchasing and sales.
“There’s still going to be a lot of that old-school mentality left, but as the younger generations are getting older and getting to that point in their life where they need some sort of equipment, whether they’re starting a business or they’ve got some land…you’ve got a younger generation with a different mentality. That shift is inevitable,” he said.
While this shift is years or decades away, agricultural equipment dealerships are contending with the challenges of the present day, navigating issues that are particular to their local area and the problems facing the nation and the world. One thing will always be the same for them: When one problem is solved, another will rise up to take its place.
That’s where ingenuity and tenacity come in. As Abel said, “Every year is different with different challenges.”
Arkansas’ oldest farms by county
James Lemue/Henderson Farm (est. 1859)
Crawley’s Farm (est. 1857)
Homestead Farms (est. 1860)
B and W Farms (est. 1843)
Rob Scroggins Farm (est. 1919)
Suzanne’s Fruit Farm (est. 1917)
“Farr” and Mary Ross Farm (est. 1876)
Epstein Land Company (est. 1893)
Possum Hollow Family Farm (est. 1895)
Thomas-Smart Farm (est. 1874)
KribyMel Farms LLC (est. 1905)
Morrison Farm (est. 1908)
Gunter/Buffington Farm (est. 1858)
Henry Jones Family Farm (est. 1884)
Cole Farm (est. 1853)
Cheely Family Farm (est. 1882)
The Fogelman Family Farm (est. 11849)
S.T. Halk Estate (est. 1887)
King Farm (est. 1857)
Jones Farm (est. 1849)
Levin C. & Sue Handley Johnson Farm (est. 1841)
Mabry Farm (est. 1851)
Bourland-Milton Farm (est. 1848)
Humphries Hubble Creek Farm (est. 1879)
Houser-Sorrells Farm (est. 1883)
Bradford Family Farms (est. 1907)
Fitzgerald Farm (est. 1886)
Hot Springs County:
Bailey Farm (est. 1857)
Chambers Farm (est. 1862)
Independence County: Larry and Michael Carter Farm (est. 1852); Rickey and Glenda Kay Carter Farm (est. 1852); Ronny and Nancy Carter Farm (est. 1852); William Henry and Janet Carter Farm (est. 1852); William Scott Carter Farm (est. 1852)
The Love Farm (est. 1887)
Davis Farm (est. 1886);
Hare Family Farm (est. 1886) inducted in 2014
Roselawn Farm (est. 1870)
Morgan Farms (est. 1876)
Doyle Farm (est. 1852)
E. T. Walton (est. 1906)
Hughes Farm (est. 1883)
Little River County:
Averitt Farm (est. 1892)
Naegle Farm (est. 1882)
Morris Farm (est. 1860)
Fred A. Smith Farm (est. 1843)
Cantrell Family Farm (est. 1904); Mear Family Farm (est. 1904)
Jones Farm (est. 1905)
White Family Farm (est. 1901)
Miller Bros/Flying Farmers (est. 1872)
Watkins Farm (est. 1889)
Uncle Edison’s Place-MCM Farms (est. 1859); Munn Home Place (est. 1859)
Newton and Searcy County:
Morris Farm (est. 1908)
Rowe McCarver Farm (est. 1860); Walthall Tree Farm (est. 1860)
Fowler Farm (est. 1860)
Toney Farms (est. 1898)
Davis Family Farm (est. 1885)
Cummins Brothers Farms LLC (est. 1888)
Wiles Family Farm (est. 1889)
Hughey Farm (est. 1852)
Holmes Farm (est. 1870)
Dickey Plantation Farm (est. 1886)
Dunn-Crabtree Farm (est. 1857)
Helmich Farm (est. 1890)
J. Hughes Farm (est. 1882)
Turney-Loftin-Horton Family Farm (est. 1845)
W.J. Simmons Farm (est. 1881)
Gore Acres Farm (est. 1873)
Estes Farm (est. 1847)
St. Francis County:
Ellis Bell Farm (est. 1878)
Beckham Farm (est. 1861)
Johnson Farm of Junction City (est. 1886)
Van Buren County:
Holland Farm (est. 1860)
Miller Farms (est. 1837)
Morris Homestead Farm (est. 1858)
The Pulley Farm (est. 1855)
D. and J. Fulton Farm (est. 1847)
Source: Arkansas Department of Agriculture