Source: Rural Lifestyle Dealer
What level of price increases have you seen from the manufacturers for the lines you carry? How do these price increases compare to previous years, and what sort of impact will they have on your business?
“We’re seeing an average of 10% price increase from our shortline manufacturers. I’m afraid this will price some products out of the market a little. As an example, it will cost well over $20,000 for a 15 foot batwing rotary cutter.”
—Bart Farley, Fraley Implement, Rushville, Ind.
“What a crazy ride these past few months have been. The biggest problem of course is not being able to get things on order from almost any vendor. The price increases have been all over the place so I will try to explain.
“Shortlines that manufacture things like rotary mowers, box scrapers, rear blades and other tractor and skid steer attachments have taken the heaviest increases. Part of it is steel increases and part are the gear boxes, drive shafts, hydraulic motors, etc., that is supplied from vendors all over the world.
“The average shortline increases are up around 20% total in the past 6 months. Breaking that down, they went up on list price at the first of the year by 5%, followed by another 8-10% in March and another 5% in June with talk of another increase soon?
“Majors like JCB and AGCO — depending on the product, but this includes most tractors, skid steers and hay equipment — most majors took about a 3% on list price in January, then another 3% in March and some products as much as another 5% this summer (June-July). And of course, talk of yet another small increase soon.”
—Ron Lonneman, Ron’s Equipment, Fort Collins, Colo.
“We have seen moderate price increases in lawn & garden and a bit more significant in the UTV market. I would not say they are out of line with what we see annually, the UTV’s a slight bit more. The price increases will not have an impact on our business, in fact the bigger impact is availability, which doesn’t seem will get much better until 3rd quarter next year.”
—Chris Eis, Eis Implement, Two Rivers, Wis.
“We sell from quite a few manufactures and they all have taken price increases in the last 12 months. We normally have one price increase per year but now most companies have moved to a quarterly increase. The percentage is all over the board from 3%-15%.
“When a customer breaks down the cost of a new machine on a $/acre or $/hour basis, these increases make a purchasing decision tough to make.
“Another big obstacle for the last 6 months of 2021 is equipment availability. New and used equipment are sold before they make it to the lot so when they do come to the store, they are serviced for the new customer and then right back out. I’ve never seen this our inventory levels this low in the past.”
— Jon Lafrenz, P&K Midwest, Dewitt, Iowa
“Price increases are insane! Everything has been inflated to an almost unbearable amount. You almost need to check daily on prices. Most companies are implementing a steel surcharge — 4%, 10%, as high as 22%. For instance, we sell the HLA (Horst welding) pallet forks. We were running low and I ordered a pallet. We usually order in pallet quantities to get a better price and free freight. Our most popular model which is a 4,200 pound unit with 48-inch forks went from a cost of $620 to $853. It’s nuts. Lead times are getting longer also. People have money and want to spend it but you can’t get product.”
— Jeff Suchomski, Suchomski Equipment, Pinckeyville, Ill.
“I don’t have exact data to back this up, but the general trend that I’ve seen is that the lower the technology level of an item we sell, the higher the percent of price increase. This would be a direct relationship to the increase of the price of steel. While it’s true that labor costs, electronic shortages (especially micro-chips) and plastics have taken price increases, those cost increases pale compared to steel. I spoke to an industry executive yesterday who works for a very large metal building manufacturer that watches the cold rolled steel index for their raw material pricing. The index pricing for their main input has tripled in the last 18 months. He sees no relief in this pricing in the short-term due to high demand and essentially no foreign steel entering the U.S.
“I’ve seen price increases, steel surcharges, fuel surcharges and a host of other pricing gouges in my 40 plus years of doing this, but never to the level we’ve seen in the last 12 months. My only experience with this hyperinflation was visiting Brazil 25 years ago when the restaurants had to go to chalk boards instead of printed menus because they had to raise the prices every day!”
— Leo Johnson, Johnson Tractor, Janesville, Wis.
“So far, price increases have varied from 4.5% to 19%. Many manufacturers will only price upon order. Freight prices have increased also, so total cost will be up more than the manufacturers stated price increase.
“Immediate effects are complications of pricing anything that is not already on hand. Sometimes, we don’t know the price without contacting the manufacturer. Other times, we have to consider whether we already have an order in and whether it has a projected shipment date. The price increase can be different based on ship date.
“Lots of confusion at the point of sale. Lots of shock from the customer base.”
— David Little, Wade Inc., Hernando, Miss.
“We have seen anywhere from 12%-20% increase in prices and some maybe a little more. I think the biggest impact is still waiting to happen as people will decide they can get by without it instead of spending the money on it. We have seen some people decide not to buy or go with a cheaper product to try and save money, but that is always a short-term view because it is also lower quality.”
— Marcus Miller, Harold’s Equipment, Dundee, Ohio
“I carry Bad Boy mowers and we are getting an across the board increase. I don’t think that it will impact sales much because people are expecting an increase if we even get products to sell.”
— Ritch Nasca, All Seasons Power Center, Jefferson, Ohio
“We are seeing anywhere from 10-20% increases on our OPE products. The companies we work with are bringing programs back (customer savings) that they had cancelled back around the first of the year so that will help offset some of the increases but still leaves them in that 10-20% range. Historically OPE products for us have increased 1-3% annually.”
—Eric Walker, New Holland Richmond, Richmond, Ind.
“I’ve seen many steel surcharges over my past 25 years here but nothing like what’s going on now. We are constantly changing prices on everything and it’s certainly not going down. I was getting numerous notices of surcharges and price increases in the same month from different manufacturers. Trailers and implements were hit the worst 25-30% up (some maybe even more). Also, demand is up and availability is really tight. The higher prices don’t seem to be scaring customers off, so that’s a good thing. It’s just a really crazy time right now.”
—Rick Bailes, Bills Tractor, Adkins, Texas
“Throughout 2021, we have manufacturers that have had increases from 1.5%-4% throughout the season. For the upcoming ‘booking seaso’” I have 2 major manufacturers of zero-turns that will implement more increases.
“Most Echo handheld units are going up by $20 on products of $250 and up. Parts prices continue to climb drastically. All of it is very volatile and uncertain going into 2022 as we are told from all manufacturers in all brands of product.”
—Alex Lewis, Texarkana Outdoor Power Equipment, Texarkana, Texas
“We’re seeing 14%-20% increases in the prices year-over-year. It’s extremely concerning with a potential for the economy to correct.”
—Bill Miller, Grass Roots Equipment and Outdoors, Batesville, Ark.
“We have seen from 5%-25% surcharges go onto 2021 prices with suggestions there will be more to come and it will definitely slow up sale.”
—Alex Lush, Connect Equipment, Rockwood, Ont.
“We’ve seen some price increases, 3%-5% for the most part. And given the market, the labor shortage and the cost of steal, I believe significant increases are coming early next year. Thus far the raising cost haven’t affected the business. Demand has remained strong!”
—Todd Bachman, Florida Coast Equipment, West Palm Beach, Fla.