Better broadband would make consolidation of equipment dealerships less of a concern

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In the most recent Canadian Farmer Sentiment Index survey, farmers were asked about whether or not they were concerned about consolidation within the ag industry. From ag retail, to precision ag companies, and more on to equipment dealerships, farmers weighed in on what consolidation worried them most.

As for category, the highest rating was given to equipment dealership consolidation, with 66 per cent saying this has a negative impact on their farm.

John Schmeiser is the Canadian president of the North American Equipment Dealers Association, and he understands that farmers are concerned about fewer dealers on the landscape, but he also thinks its important to balance the concern with why it’s happened in the first place.

Western Canadian farmers were on the leading edge of a North American trend to consolidation, Schmeiser says, so if it seemed swift, it’s because it was. Currently, however, the U.S. is more aggressively consolidating, and that process is on-going.

There are several factors that have converged to get to where we are now, he says, starting with the consolidation of farms themselves. Each farmer that retires or sells is one less customer. Equipment dealers have had to right-size themselves based on a shrinking customer base, Schmeiser says.

Then, there’s direction from the manufacturers, too, who set out the level of service expectation and capability of a dealership. Some older, smaller dealers would have had to invest substantially to stay in the market, and that may not have been the right move for them.

Add to that that changing equipment in size and complexity has put continued pressure on infrastructure, workforce training and expertise, and larger equipment offerings means fewer pieces of total machinery sold overall, and it’s no wonder there are fewer dealers, he says.

There’s always the concern of diagnostics, service, and parts when dealerships close or consolidate, Schmeiser knows, but he says that a well-connected, well-stocked multi-location dealership may offer some benefits vs. a parts depot in a city or other country.

But perhaps one of the biggest challenges to making all of this work is one key infrastructure piece that is missing in many rural areas: broadband. Schmeiser says that the level of remote diagnostic work that’s possible is hampered by a lack of connectivity. Better broadband would make existing dealerships far more effective.

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