Even in the small town of Mexico, Mo., feast or famine ruled last year's crop for farmers.
Some of the city's farmers saw enough rain, while others had another dry year, said Mike Miller, co-owner of Miller Tire of Mexico. The unpredictability of the farming economy was reflected in Miller Tire's farm sales.
``It wasn't a banner year by any means, but it wasn't a bad year,'' he said.
The same is true nationally, farm experts said. Farmers in Iowa, Minnesota and South Dakota generally had good years while others weren't so lucky, said William Edwards, an extension agriculture economist at Iowa State University.
``Some people had an almost complete crop failure,'' he said.
Terry Francl, a senior economist at the American Farm Bureau in Park Ridge, Ill., said most areas saw a rebound of crop prices for the staple commodities corn, cotton, soybeans and wheat.
Mr. Francl expects an overall 18-percent increase in net income for farmers in 2003-an increase that would regain roughly half of the ground lost in 2002. He said net farm income in 2001 was $46.6 billion until it dropped to $36.2 billion last year. With the increase he anticipates, that number would climb back to $42.7 billion this year.
``I would anticipate the farm equipment sales will be strong again in 2003,'' he said.
Even with Mr. Francl's figures, many farm tire dealers aren't ready to pin their hopes on a good year for farmers just yet.
``I know all the farmers are extremely cautious, (they) are pretty much not doing anything,'' said Darcy McGuigan, manager of Anderson Tire Co. in Pierre, S.D. ``It's going to be...a kind of wait-and-see year.''
Farmers near the three-outlet dealership suffered a drought last year, and the area didn't see its first snowfall until two weeks ago, she said. The 36-year-old dealership sells Firestone farm tires and Bridgestone and Firestone passenger and light truck tires.
Mr. Miller said his farm business was down about 5 percent in 2002. Overall, his business balanced out as passenger and light truck tire sales rose enough to compensate for the sliding ag tire sales. The dealership sells Cooper, Firestone, Bridgestone and Michelin brand passenger tires; Firestone, BFGoodrich and Titan farm tires; and Oliver retreads.
``Farmers aren't going out and buying a lot of equipment...which we hope will generate more tire sales (in replacements),'' Mr. Miller said.
Dean Chapin, sales and purchasing manager for co-op dealership Nebraska Tire, expects farm tire sales to increase in 2003 because the company tries to keep prices low for nervous farmers. Sales for all tires, including passenger, increased at the dealership from $5 million to $7.2 million in 2002, he said. Its eight outlets sell primarily Continental farm tires.
``The worse the economy gets, the more (farmers) shop, and they find us,'' Mr. Chapin said.
Frank Kozal, manager of McAtee Tire & Service Inc. in Jefferson, Iowa, said the dealership's farm tire sales were slow last year, but the business is staying positive.
``I like to think that it'd be up, but with the markets the way they are, hopefully we'll have a steady year,'' he said.
Even though Mr. Francl of the American Farm Bureau expects the 18-percent increase in net farm income, he said that may not be the saving grace for tire dealerships.
``People have accumulated debts, and (they're) trying to make up, so not all of the money goes directly into capital expenditures,'' he said.
While weather is the most direct-and unpredictable-factor influencing farmers' wealth and therefore their ability to buy equipment, tire manufacturers, dealers and experts are looking at other influences.
Most important, many said, farmers may simply have no choice but to replace tires after the consecutive bad years when they had put off buying tires and other equipment.
``They've been doing that for a couple years, so I think there's some pent-up demand that will help the market if things are stable,'' said Neil Rayson, manager of farm tires, North America for Continental Tire North America Inc. ``There comes a point where you just have to (replace equipment). Hopefully we're at that point.''
Sales in 2002 for Continental's farm tires were up in the low double digits, Mr. Rayson said. ``It was very good growth considering the market was double-digit down.''
To get back to 2001 levels, he said the industry's sales would have to grow about 10 percent. He's cautiously expecting a 5-percent increase.
Slowly rising commodity prices also could have some impact on the market, said Mark Pillow, director of farm tires for Goodyear. He said the main commodity prices had been creeping at 20-year lows, but last year the prices for soybeans, wheat and corn slowly inched up.
``When a farmer can get a good price on his product, he's going to buy equipment and tires and everything else,'' he said.
That increase in some prices bodes well for some regions and not for others. Lower supply caused by some areas' droughts will increase prices for those farmers lucky enough to get rain.
Mr. Pillow said the Akron tire maker's replacement farm tire sales were down while original equipment sales inched up last year.
``We had a considerable gain in market share, which is good in any market, especially in one that is depressed,'' he said.
For 2003, Mr. Pillow expects Goodyear's farm sales to grow 8 to 10 percent, compared with the industry's expected growth of 3 to 5 percent. ``It's beyond modest, but it's not overly aggressive,'' he said.
Michelin also claimed it gained a point of market share in North America last year for its Michelin brands.
Manufacturers also are unsure about the effect of the farm bill that was passed by Congress last year. It essentially provides aid to some farmers based on various criteria.
Jeff Wilson, marketing manager for Firestone Agricultural Tire Division in Des Moines, Iowa, said the bill can be complicated, so many farmers don't know how much aid they can expect. He's predicting the short supply in some areas and rising commodity prices would have a more direct effect on tire sales.
``Maybe some farmers could be spending more this year,'' he said.
Firestone's sales in both OE and replacement farm tires were up slightly for 2002, he said. The division expects a ``minor'' increase in 2003.
The manufacturers contacted by Tire Business said their main investment for 2003 will be to continue the trend toward radial tires. While most tire makers don't expect radials will ever completely surpass bias ply tires in the farm market, they see, long-term, the radial market growing. Continental's Mr. Rayson said gains for radials may be small this year as some farmers are wary of investing in something new.
``Farmers have been beaten down so far, they're not going to become incredibly optimistic in one year,'' he said.
Still, that won't deter manufacturers from increasing their radial offerings.
``If you want to be successful in this business, you have to be a big player in radial,'' said Mr. Pillow from Goodyear.
Some manufacturers also are looking to invest in other growing segments such as rubber track. Mr. Pillow said rubber tracks and radials will return the most profit for Goodyear and its dealers.
He said the tire maker recently opened distribution of its rubber tracks to its tire dealers. Goodyear previously had sold tracks exclusively to the equipment manufacturers, which would then sell the products in the aftermarket.
``We had some competition coming into our market, and they started approaching our dealers to sell their product,'' Mr. Pillow said.
John Golden, president of Warren Tire Service in Warren, Minn., said his Goodyear dealership-part of the Tires Only Inc. group of 25 dealerships-has seen strong sales in rubber tracks.
``It's a real niche market,'' he said.
Competition in the farm market in general could heat up in the coming years as foreign tire makers have started offering small sizes of farm tires, U.S. manufacturers said, though, according to Mr. Pillow, they are yet to enter Goodyear's main market strongholds.
``Nonetheless, we are noticing them, and they are making their presence known,'' he said.
Mr. Wilson said Firestone also has noticed the increased competition.
``(Foreign manufacturers are) making tremendous inroads in certain markets,'' he said.