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Pandemic slows availability of equipment parts

Issue Date: August 19, 2020
By Christine Souza
A Sacramento Valley equipment dealer says most John Deere parts have been in good supply, though parts from overseas, such as rubber tracks, have sometimes been more difficult to come by.
Photo/Ching Lee

For generations, farmers have been known for their resourcefulness and ability to "MacGyver" what they need to get the job done. But during the global pandemic, which has resulted in manufacturing facility closures and supply chain disruptions, farmers report delays in acquiring some necessary parts and equipment.

Tulare County citrus farmer John Kirkpatrick described parts and equipment as "the heart and lungs of the operation; without those, there would be no crop."

In Siskiyou County, hay farmer Brandon Fawaz faced a challenge in tracking down a fairly common hydraulic motor, which he planned to use to drive an auger for unloading fertilizer out of a truck and into a spreader. The motor he needed is built in Mexico, and he learned the manufacturing plant was closed due to the pandemic.

"I was told that due to the virus, production was behind and estimated production would be weeks away, sometime in the latter part of September, and so to plan for parts being unavailable," Fawaz said.

He said he eventually bought a replacement motor, but not the name-brand motor he usually purchases.

Solano County farmer Joe Martinez, who grows almonds, walnuts and prunes, said suppliers have very low inventories and many "off the shelf" parts must now be ordered, adding, "We've never had problems like this before."

Chuck Hice, assistant manager of McFarland-based All State Ag Parts, which sells new, used and rebuilt agricultural and tractor parts, said he is aware of the delays.

"Without a doubt, we are having a hard time getting certain parts out of Mexico, and it's been taking two to three times as long to get because of COVID," Hice said.

The Association of Equipment Manufacturers, a Wisconsin-based trade association that represents equipment manufacturers, said the equipment farmers depend on requires thousands of parts, components and materials, including steel, aluminum, electronics, rubber and insulation. AEM said manufacturing facilities in Mexico closed in March and April, while the Mexican government decided how to protect employees during the pandemic.

"There's a fair amount of parts and components that are sourced from Mexico, and thousands of parts go into a piece of agricultural machinery and each company sources from different locations," said Alex Russ, AEM director of government relations. "Not only did that disruption slow down manufacturing, but it also stopped certain manufacturers from being able to operate in the U.S., because they couldn't source those parts and components from anywhere else."

While manufacturers in the United States and Canada were able to attain "essential" designations for their operations, Russ said, the Mexican government delayed how it was going to deal with the COVID-19 outbreak.

"The pandemic really destabilized North American supply chains, as manufacturers were trying to obtain 'essential' designations and make sure that their suppliers were also able to continue manufacturing," Russ said.

Mexico has since issued clear guidance for manufacturers to operate. Ensuring that all North American plants are operational, Russ said, is especially important given the United States-Mexico-Canada Agreement, a trade agreement that took effect in July.

Another challenge affecting the supply of parts and equipment, Russ said, is a limited supply due to "just in time" manufacturing, which means plants manufacture equipment based on customer demand and do not stockpile many extra parts and components.

Tulare County dairy farmer Tom Barcellos said he has not had a serious problem in acquiring critical parts, although he's aware of several-week delays in some cases. Early on, he said, there was added wait time for certain dairy supplies, but he recalled a supplier saying, "If everybody stays calm, then we're OK."

What helped, Barcellos said, is using "John Deere, Caterpillar, Ford, Peterbilt—main-brand stuff that is fairly common."

Jeremy Bivert, corporate parts manager at Valley Truck & Tractor Co. in Woodland, which sells John Deere products and other lines, said, "Some of the other lines are having more difficulty, but as far as the John Deere line is concerned, about 98% of the parts that we sell are supplied within 24 hours. John Deere has a parts warehouse in the Midwest where they keep tens of thousands of most parts."

Items that are more difficult to acquire, Bivert said, include parts that come in from overseas, such as disk blades or other ground-engaging equipment, or rubber tracks for tractors—a part that John Deere doesn't itself manufacture.

He said John Deere was proactive early in response to COVID-19, adding that locations increased stock levels, "so instead of keeping a three-months' supply of parts, we would keep a five- or six-months' supply, just in case some of the supply channel got backlogged."

In preparing for 2021, Bivert said his company will start early.

"Usually, we place our orders in November for spring tractors, but now we're saying, 'Let's get this done now before September, to give ourselves that extra couple months of cushion,'" he said.

AGCO, a worldwide manufacturer and distributor of agricultural equipment, reported in late July that all its factories remained open, with strong orders for spring 2021.

"We still face a demanding environment to manage our manufacturing, supply chain and aftermarket operations," AGCO chairman, president and chief executive officer Martin Richenhagen said. "In addition, end-market demand has been negatively impacted by the pandemic, but is proving to be resilient as farmers look to replace their aged fleet."

Based on the COVID-19 impact to manufacturing supply chains, AEM predicted the pandemic will change the way manufacturers operate in the future.

"Our concern is, we really need to prepare for future disruptions to North American supply chains," Russ said. "It seems logical that the United States, Mexican and Canadian governments should have some type of task force or a mechanism where manufacturers can provide government decisionmakers information in real time, to cut down on disruptions."



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