Strong harvest and currency rates linked to farmers buying more new machinery

Strong harvest and currency rates linked to farmers buying more new machinery

first_imgCALGARY – Western Canadian farmers are using proceeds from a good harvest last year to buy more new agricultural equipment after years of settling for used as prices of U.S.-made machinery rose due to the stronger American dollar.Both Cervus Equipment Corp. and Rocky Mountain Dealerships Inc. are reporting increased earnings thanks to higher profit margins and manufacturers’ incentive payments on sales of new equipment in 2017 versus 2016.Cervus CEO Graham Drake says the company expects strong sales of new equipment to continue in 2018 after sales leaped ahead by 20 per cent last year, driven by good harvests and “windows” of favourable currency exchange rates.He cited the improved outlook in announcing an increase in the quarterly dividend from seven to 10 cents per share.CEO Garrett Ganden says Rocky Mountain Dealerships is also banking on Canadian farmer optimism this year, noting continuing good prices on solid crop production and a harvest last fall that wasn’t hampered by late-season wet conditions as it was in 2016.Cervus reported revenue from new equipment sales rose 20 per cent to $447 million in 2017, while Rocky Mountain noted a 5.7 per cent increase to $436 million.Both companies are based in Calgary.Rocky Mountain, which sells Case IH and New Holland equipment, says it is Canada’s largest agriculture equipment dealer with 35 dealerships across the Prairies.Cervus, which sells John Deere machinery, has interests in 35 dealerships, 20 in Western Canada, nine in New Zealand and six in Australia.last_img


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