Farm tire drought: Spike in equipment sales leads to run on big tractor, combine tires

Dec. 1, 2005

Medium truck and OTR tires aren't the only commercial tires that have been in short supply this year. Dealers of large farm tires have experienced supply problems as well.

Larry Raben, vice president of Evansville, Ind.-based Raben Tire Co., first noticed the problem about 12 months ago. "We're ordering more tires, but don't anticipate getting them in two or three weeks." Six months, he says, is more the norm.

Surging farm equipment sales are contributing to tight large farm tire supply. Farmers spent more than $210 billion on production equipment in 2004, according to the United States Department of Agriculture -- a 5% increase from 2003. Sales of tractors and self-propelled farm equipment jumped a whopping 24% last year.

OE sales spike

"Last year was a phenomenal year for farming," says Mike Bogunia, director of sales and marketing, Firestone Agricultural Tire Co. (FATC). "A lot of new equipment was sold. John Deere, Case and Kubota all beefed up their plants because of the increased demand."

Several factors contributed to equipment sales growth, according to Bill Shaefer, vice president, North American marketing and sales, agricultural product line, Michelin North America Inc.

"Crop prices were up quite a bit in 2004. A new farm bill (ensured) that (economic) security was in place; farmers were guaranteed a certain income level for their production. Weather conditions were good and the harvest was strong.

"Farmers tend to invest when things are good... (there was) heavy investment in capital equipment."

Original equipment manufacturers gobbled up a large percentage of the large farm tires that were produced this year.


"When market conditions are good, it drives demand more so than normal wear and tear," says Bill Haney, central district manager, ag tires, Trelleborg Wheel Systems Americas. Shaefer says size shortages vary from region to region and also by production and usage. "It depends on the area of the country, the type of machinery you're looking at, and -- when you get into the OEMs -- it depends on what that (equipment) manufacturer is making at the time. It's a wide variety. The ag market is very dispersed in terms of equipment that's used."

Raben reports that the supply of 38- and 42-inch tires is not as large as it once was. "There hasn't been an abundance of anything. Instead of trying to build inventory, we're trying to take only what's (being made) to keep our customers running."

Field adjustments

In many cases, Raben Tire has had to mount loaner tires on customers' tractors and combines in lieu of new tires.

The dealership's loaners "are tires that have been traded in or tires we've replaced. If you have eight tires on a tractor, you may have four or five good ones... we'll take those tires in on trade.

"A lot of times it's extra service (work) for us but it keeps our customers moving. They're not down and they're not going to our competitors to buy tires."

Raben Tire doesn't charge for loaner tires. Most loaners are replaced with new tires within a month or two.

Tire manufacturers claim they are doing what they can to ramp up supply. Michelin's Shaefer says the company has been adding production at its European facilities over the last three years. (All of the farm tires that Michelin sells in North America are imported from across the Atlantic.)

"We're looking at moving where and how we manufacture among those facilities to make sure we're able to maximize our existing capacity and do it at the lowest possible cost."

Bogunia says FATC has added millions of dollars in improvements to its plant in Des Moines, Iowa, in an effort to boost output. However, there's no quick fix. "You can only make so many (units) so fast. Our business is so seasonal; we have to make so much stuff in anticipation. You need lead time to get tires built."

Trelleborg's parent company, Trelleborg Wheel Systems SpA, also is increasing production, according to Haney. In addition, Trelleborg -- which sells both Trelleborg and Pirelli brand farm tires in the U.S. -- is pursuing off-take manufacturing arrangements that may boost supply levels.


Weighty considerations

Over the last year, tire manufacturers have been urging tire dealers to do all they can to keep existing OTR and medium truck tires operational. They're also encouraging dealers to do the same with large farm tires that are already in the field.

A key part of that is making sure that the weight of tractors and other big machines is properly distributed before they hit the dirt.

On two-wheel-drive tractors, Michelin recommends that the rear axle should bear 70% of the unit's overall weight, with the front axle carrying the remainder.

On four-wheel-drive tractors, weight should be split 45% to 55% between the rear and front axles, respectively, according to Tod Gillespie, Michelin's North American marketing training manager.

Cast iron weights can be used to adjust weight ratios to correct specifications, he says.

Setting and later maintaining proper air pressure levels also is vital to achieving maximum farm tire life. "Inflation is critical," says Kerry Andrews, Michelin's ag tire sales business development manager. "That's one thing I can't stress enough."

Andrews, who has a farming background, reports it's difficult to convince farmers that tires inflated in the nine- to 11-pound range aren't dangerously under-inflated.

"I've had growers who grossly over-inflate their tires. I have to beg them to keep (psi levels) down."

High inflation pressures, according to Michelin officials, lead to greater soil compaction.

"Air pressure, ballast, tire size -- it's almost like a formula," says Rick Ayers, manager for Clarksville, Tenn.-based Hutson Inc., a major farm tractor dealer with stores throughout Tennessee and Kentucky.


"We didn't pay attention to ballast 10, 15 years ago. We used to put a big set of tires on, pump them up to 25 psi, and let them go."

Hutson has since learned that lower inflation levels are the way to go, according to Ayers. "We have a set of guidelines we want our customers to follow, and we can usually tell when they don't. They'll call and say, 'We have 70% wheel slippage!' We'll say, 'How many pounds of air do you have in your tires?' And they'll say, 'Forty!'

"Our tractors, if they stay the way we set them up, will probably stay at around 12% to 15% wheel slippage."

Proper air pressure maintenance also prevents excessive heat build-up. "The one thing that takes a tire out of service is heat," says FATC's Bogunia. "Keep tires properly inflated to match the load."

Farmers in Raben Tire's markets are running "anywhere from six to 11 pounds of pressure," says Larry Raben.

When Raben's salesmen sell farm tires, they furnish buyers with tire gauges. "When we sell a set of tires we also weigh the tractor. We put tires down to the minimum pressure they need but to where it's going to carry the load."

Advance placement

Tire manufacturers believe that large farm tires will remain in short supply throughout 2006, though shortages will not be as acute, at least according to Michelin.

"If we look at today, we've seen things stabilize," says Shaefer. "That (will) help manufacturers to catch up."

"Just within the last month or so, we've seen that OE demand has slowed down a little bit," says Jeff Wilson, FATC marketing manager.

"I think the overall economy is starting to slow down a little bit," adds Bogunia. What happens to fuel prices over the next several months "will dictate how strong (the market) will be next year."


Meanwhile, FATC officials advise tire dealers to plan ahead when ordering. "Don't wait until the combine is down in the field to get that key size," says Miller.

"We recommend estimating demand as close as they can and then giving themselves enough time to make sure we get the tires to them."

Ordering months in advance can be a complicated affair, according to Raben. "When you start forecasting in January for what your needs are going to be for a crop that hasn't even been planted, it's tricky. You can't always go off what you sold in the past.

"When tires are tight, manufacturers have to decide between OE and the aftermarket, and you can't ignore either one. You have to spread it around and keep everyone happy."

Is liquid ballast headed down the drain? Michelin gives nod to iron

Liquid farm tire ballast may be going the way of the oxen-pulled plow on many American farms, according to Tod Gillespie, North American marketing training manager for Michelin North America Inc.

Running a liquid-filled tire "is like playing with a basketball that's half-filled with water," he says. Liquid "doesn't distribute the weight where it needs to be."

A more effective solution is hanging cast iron weights on tractors and other machines, he says. "The objection you might see is the price of cast iron; it's about $1 a pound. But the cost over the life of the machine and the tires" makes its worthwhile.

"We believe cast iron is the way to go. We reinforce that through our training."


Trickle down effect: Shortage extends to equipment dealers

Equipment dealers also have been affected by large farm tire shortages.

Clarksville, Tenn.-based farm tractor dealer Hutson Inc. began feeling the squeeze last spring. "We ordered several tractors that were supposed to be in on May 1," says Hutson Sales Representative Brandon Chambers. "Our supplier said, 'The tractors are done, but we don't have tires.'

"We had one tractor that sat 25 to 30 days waiting for tires. We've had to take some existing machines and steal tires off them" to mount on other machines.

Things have improved since then, Chambers reports. "Fortunately, we're associated with Raben Tire Co. We got acquainted with them this year."