ELSTOW, Sask. – Charlie Smith changed the name of his company.
Despite knowing the value of brand recognition that comes with the name he has maintained for more than 20 years, Smith says the word salvage implies ideas he feels don’t properly describe his industry.
“We are in the parts business, a service industry for the agricultural community,” he said.
Smith operates Combine World, formerly known as Combine Salvage, at Elstow, Sask.
“The business, for those of us that are still around, is a sophisticated industry that relies on specialized parts staff and a lot of technology,” he said. “It’s not what most people might think a wrecking yard might be.”
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Glen Thomson, who operates a farm equipment recycled parts business called Harvest Salvage in Brandon, feels the operators that remain viable in Western Canada have had to adapt to a changing agricultural marketplace.
“This is an evolving industry. Combines are still a major piece of the business. But the needs of farmers have changed. With farm size shifting, so has the used parts business. The combines are bigger today, just like the farms. Fewer farms, fewer combines, fewer repairs,” he said.
“You have to structure your business so that it can adapt to those changes or get out. A lot of smaller operators have.”
Joe Henry of Watrous Salvage in Watrous, Sask., has watched as smaller farm equipment salvage companies have closed.
“Too small to adapt. Or, like farmers, some couldn’t work out a succession plan for the business and needed to retire.”
Henry said farmers don’t build their own machines as much as they did previously.
“There was a time when we would see a steady stream of farmers that were looking for bits and pieces to build some of their own machines or make major changes to existing ones.Guys building sprayers and such.”
He said some still do, but more are buying ready made machines as their acres increase.
“Lucky for us the big farms all have some older, smaller tractors and swathers. They still come to us for parts.”
Thomson said the types of farmer- built machines have changed with the times.
“Now we get folks coming in wanting to build machines that are bigger than they can buy from the dealer, or highly specialized for a niche crop. Big guys build big things,” he said.
“But when it comes to parts, combines are still a vital part of the business. In harvest time farmers need that part and it can’t wait. Down time is dollars.”
Smith agreed.
“We get a lot of business from OEM (original equipment manufacturer) dealers that need a part in a hurry. If a final drive goes on a combine and the part is going to be three weeks or more and has to come from the southern U.S., that won’t cut it for the prairie dealer or his farmer customer. They come to us for it.”
Used parts dealers say the combine remains a less price sensitive element of their business because of this timeliness factor.
Finding late-model machines from which to salvage parts has become a challenge. While farmers still sell older and critically damaged machines to wreckers, most come from insurance company tenders.
“It’s become very competitive in the sourcing of machines,” Henry said. “We still attend a few auctions.”
All three used parts companies say the once abundant supply of good, used equipment with parts for salvaging has fallen off, especially combines.
Farm equipment used to be retired because of a major part failure or old age. However, the machines usually had relatively few hours because of the smaller numbers of acres they had to cover. Smith said today’s combines see much longer hours and unless they are the victims of fire or accident, they arrive at his door with more than 5,000 hours.
“Some a lot more than that, yet they are still a relatively current machine.”
Thomson said he no longer attends auctions.
“For us it’s largely driven by insurance company tenders. We have our own trucking to pick up the machines and we do a lot of repairs after fires and accidents for those companies.”
Many of these dealers have remained competitive in a narrowing market by diversifying into repairs and used machines.
In addition to used parts, all three companies say after-market or jobber parts have become a much bigger element of their work.
Smith said his company has worked to become a one-stop parts shopping centre for farmers.
“When a farmer calls and we don’t have the part, we do our best to find it for them. If it’s a common part we often have the used part and the jobber replacement to offer. Or we start searching with other suppliers.”
Thomson uses a computerized system that he shares with salvage parts suppliers in the United States.
“We can generally find most things. We want farmers coming back to us,” he said.
All three say staffing is critical.
Smith said the salvage business is a knowledge industry.
“It takes at least two years to get a parts person to the point where they are a true resource to the customer. We have to know all the OEM brands, and their computer (parts) systems, not just one.”
Henry said he has been lucky to have a low staff turnover, but recognizes that the rural labour shortage is making it difficult to find new staff.
Smith recently recruited several new employees from the Philippines and has staff from Mexico.
The parts also cross borders. A steady stream of business comes from the United States, but he also sells to Asia, Australia and Europe.
Thompson said today’s customer is often a voice on the telephone asking to have a purchase shipped somewhere.
