Livingston Machinery Company announced today that the Company has signed a Letter of Intent (“LOI”) to partner with Ag Solutions Group.

With four locations, Livingston Machinery sells, services, and maintains primarily AGCO products. Livingston Machinery was founded in 1987 and became an employee-owned company in 2008. Livingston Machinery is one of AGCO’s top dealers in the nation, winning AGCO’s 5 Star Dealer Award 5 times for Dealer Excellence.

Ag Solutions Group, headquartered in Des Moines, Iowa, will buy out Livingston Machinery’s existing Employee Stock Ownership Plan (ESOP) and fund Livingston Machinery’s growth and expansion plans. As Livingston Machinery looks to grow and open new locations, the Company also secures the long-term future of the Company with increased financial strength and resources to meet the needs of its growing customer base and broader geographic region.

With this new partnership, Livingston Machinery’s management and staff are all staying with the Company, committed to serving their customers with their parts, sales, and service needs. All else stays the same: key relationships, sales staff, technicians, and all contact information stays the same in this new partnership. Livingston Machinery’s daily operations will continue just as customers have come to expect. Livingston Machinery’s commitment to 24/7 parts and service will continue and customers can soon anticipate quicker response times from added team members and additional locations.

Shawn Skaggs, President/CEO of Livingston Machinery Company, said:

“We expect this new partnership to greatly expand our capabilities in servicing our valued customers and partners in agriculture. Our plans to establish new facilities and develop better resources will further improve the experience that our customers have come to expect. It’s an exciting time for all of us and we look forward to growing together with our new partners.”

With over 110 employees serving farmers across Oklahoma, Texas, Kansas, New Mexico, and Colorado, the goal will continue to be exceptional customer service. Ag Solutions Group’s interest in the company stems from Livingston Machinery’s growth potential and customer-driven culture that the Livingston Machinery team has established. The target date to finalize the acquisition of Livingston Machinery’s Employee Stock Ownership Plan is December 31st, 2020.

Once the partnership is finalized, the new capital investment in Livingston Machinery will focus on expansion, improving facilities, and broadening the reach of personnel to better serve the company’s wide-spread customers.

Source: Livingston Machinery

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Using the most advanced technology, Laux explained how AgDrone Pro gives producers an eagle eye view of their entire field to help them precisely evaluate and plan for the highest and healthiest crop yields.

AgDrone Pro allows producers to monitor crop growth and protection measures in real time. By identifying areas of concern, AgDrone Pro can advise producers on how to proactively respond with targeted measures of care – saving time, money and potential losses. AgDrone Pro uses military-grade drones and technology, capable of flying up to 360 ft. above your fields. With data driven results and personalized service, their agricultural scouting drones they deploy allow you to see data in terms canopy coverage, areas of stress in your crop and also allow you to track growth over multiple seasons.

According to Laux, the multispectral imaging used by AgDrone Pro is very effective in evaluating soil productivity and analyzing plant health. He says, viewing the health of soil and crops with the naked eye is very limited and is reactionary. Multispectral sensor technology, on the other hand, allows you to see further than the naked eye. Data from multispectral imaging is proven to help identify pests, disease and weeds, optimize pesticide usage and crop sprays through early detection, detecting nutrient deficiencies, count plants and determine population or spacing issues, estimate crop yield, measure irrigation and more.

“Right now, we’re not seeing the price of crops go up – they’re staying put or going down,” Laux said, explaining the benefit of AgDrone Pro’s services available to clients. “So, with AgDrone Pro, instead of using the ‘spray and pray’ method – you got a thousand acres, so you buy a thousand acres worth of chemical, spray it and hope it works – now I can literally ground truth that and then treat specific trouble spots with the exact amount it needs, no more no less. So, now you’re spending less on your treatment upfront saving you potentially thousands of dollars.”

Source: Oklahoma Farm Report

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Increased costs in the form of operating expenses for ag retailers, including labor, equipment and other expenses, will potentially rise due to a compressed or hard-hitting spring planting season.

“The near-term outlook for ag retailers and agronomy departments does raise some concern,” said Will Secor, grain and farm supply economist at CoBank. “As always, there’s a lot riding on spring weather. If farmers and ag retailers have ample time to get in the fields and make up time that was lost last fall, that will ease the pressure. However, a compressed spring will increase costs and could have impacts that last throughout the growing season.”

Three Drivers Impacting Farm Supply Outlook

Poor Weather – Bad weather throughout much of the Midwest last fall kept farmers and applicators out of the fields, pushing much of that fieldwork to spring. And now with flooding throughout much of the Midwest, that fieldwork will be pushed further into the year. As a result, ag retailers will likely be stretched to fulfill service requests. To meet the needs in their areas, some ag retailers may rent additional equipment, hire more seasonal labor or pay additional overtime hours. On the other hand, ag retailers that have significant capacity in labor or equipment may welcome a compressed, hard-hitting spring.

Stressed Farm Financials – As commodity prices have declined, farmers are increasingly price shopping and looking to cut costs. Variable costs like fertilizer, seed and crop protection products are key targets. Fertilizer volume and seed choices are becoming more constrained by farm finances. Farmers may pull back on macronutrient fertilizers and are less likely to apply micronutrients or try biologicals. Delayed farmer decisions can also be linked to weak farm financials. Combined with a decrease in prepays, ag retailers are facing greater inventory risk and more difficult inventory decisions. Accounts receivable risk for ag retailers will likely increase as cash farm income dropped nearly ten percent in 2018.

Fertilizer Prices – Fertilizer prices are expected to increase as the spring application season kicks into high gear. This should provide a good margin opportunity for ag retailers who purchased product before the run-up in prices last fall. Ag retailers who purchased inventory at high prices last fall that are still unpriced going into the spring, face uncertainty. If retail prices do not increase to meet the prices paid, margins will shrink.

“Profitability will be pressured for most ag retailers and agronomy departments in 2019,” said Secor. “The USDA is predicting higher farm income in 2019, which we could see the effects of in 2020. However, many farmers will be cash-strapped for the current planting season and that will certainly impact ag retailers.”

Source: Oklahoma Farm Report 

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“You never know… you’re always just one or two crop failures from problems, but so far things worked out really well,” Zeka said, commenting from a lender’s perspective on the industry. “Up until probably three months ago, we were all surprised at how well our portfolio was holding up. It just seems in the last couple months, though, we’ve had some people come in that are finally to their last dollar and needing some help.”

Zeka says the further west you go, the more challenging things have become. Back east, he says there is more off-farm employment and producers there are not having the same problems being seen on more traditional operations. The comparisons are further telling when you compare the livestock and cropping segments.

“We continue to see breakeven to nice profits on the cattle side. But if you’re growing soybeans, or corn or wheat,” he said, “they’re struggling out there to breakeven.”

In doing its part to help stakeholders during these tough times, Zeka says the Oklahoma AgCredit Board of Directors elected to increase its patronage back to members. Last year, the board distributed $5 million in payouts. In 2019, Zeka says that amount was raised to $6 million. In fact, payments from that are scheduled to begin today April 3rd and continue over the next two weeks.

In addition, Zeka encourages producers to continue to lean on Oklahoma AgCredit, but admits that as a lender it is important to be mindful of what sound partnerships consist of. His advice for interested farmers, when it comes to presenting oneself as a viable candidate, can be boiled down to one thing.

“One word – communication,” Zeka remarked. “What we tell our customers is if you’re going to have problems, get to us early. Let’s not wait until things get past a certain point of no return. That way it gives us enough time to work out a plan that can help them retain profitability and continue financing going forward.”

With assets exceeding $1.34 billion and a portfolio in excess of 6,300 loans, Oklahoma AgCredit is the largest Farm Credit association in the state. Headquartered in Broken Arrow, Oklahoma AgCredit has 17 full-time lending offices and a number of weekly contact points to provide loans for farm and ranch land, country homes, livestock, equipment and operating costs.

Source: Oklahoma Farm Report

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