Farming community feels economic bite

January 05, 2009|By DON AINES

MERCERSBURG, Pa. -- Times are tough all over, including in the farming community, hit by rising energy prices last year and falling commodity prices in recent months, according to some of the farmers attending Smith's Implements open house on Monday.

A few hundred people went through the business enjoying free hot dogs and ice cream and a little socializing, entering past a John Deere 7930 parked outside the door.

"We have a customer who runs three of these and rotates them about every three years," said Ross Smith who, along with his wife, Tamela, owns the business his father started in 1964.

At $155,000 each, the 7930 is a considerable investment, but the business sold six of them last year, he said.

"We may see more of an increase on the service side this year" as farmers and custom harvesting businesses concentrate more on keeping existing equipment running rather than purchasing new machinery, he said.


"We're usually the first to take the cut," said Smith, noting that farmers will pay their feed, fuel and veterinary bills first. "Those are all things that add to the milk check."

In September 2007, the price of milk topped out at about $22 per hundredweight, said Myron Byers of Mercersburg. His most recent check was $16.99 per hundredweight and that could fall a few more dollars in the near future, he said.

How much of a hit farm income will take "varies a lot from farm to farm," Byers said. Some farmers can produce a hundredweight of milk for $8 or $9, but for others the cost could be upwards of $12, he said.

"It gets awful tight ... but Franklin County has one of the most conservative groups of farmers around," Smith said.

"And efficient, too," Byers added.

"When you do have an up year, you ask the employees that you have to buy in and give more hours" rather than expand a work force that has to be trimmed in a bad year, Smith said. His company employs about 25 people, full- and part-time, he said.

It is also important for the company to build a relationship before making a sale, Smith said.

"This is the place we work with mostly," said Fred Rice of Chambersburg, Pa. "Good equipment and good people."

"I bought my first combine head here about seven or eight years ago," said Keith Jones of Jones Harvesting in Carlisle, Pa. Jones, who does custom harvesting from New York to Virginia, buys his machines and has them maintained at Smith's, including his forage harvesters, which he brings for winter servicing.

Long-term relationships are becoming more important as the number of farmers dwindles but the number of larger commercial operations increases, Smith said. Selling customers expensive pieces of equipment they either do not need or can barely afford does nothing to build those relationships, he said.

"I want to be the commercial dealer that understands the more technologically advanced equipment needed in today's farming," Smith said.

The Herald-Mail Articles