How Tech is Changing the Farming Industry

is Mahindra, the global conglomerate based in India. Joining us to talk about the agg industry specifically UH and tractors is Veran Poperly, President CEO at Mahindra Agriculture in North America, joining us on the phone from Houston. Veren So nice to have you here with us. How are you very well? Thank you? Cole's pleasure being here. And uh, it's a great weather down here, so yes, it's always good. Well, well,

tell me a little bit. I want to get into your business, but tell me a little bit about Houston right now. Um, and in terms of dealing with the pandemic, the impact that you're seeing, Um, how's it going. Yeah, we are seeing a pretty large number of cases and so everyone's you know, it's pretty much like the rest of the country, everyone's kind of bearing masks and kind of isolating themselves and living further and further out from everyone each other. And so at some level, somehow it

seems to be working well for the tractor business. Well, let's talk about this. I mean, first of all, if you could take me back to the spring, what was going on for you and your team at the company, and I'm curious, then kind of take us forward how things have evolved. But what was it like back in the spring. Well, back in the spring, I think in

March when this thing started. I think, like everyone else, we were completely panicked, and you know, we really pulled back, you know, went down the roads of shutting down the plants and manufacturing and the supply chain kind of froze. We had our own versions of layoffs and furloughs, but you know, you know, we tried to focus on then. But what we found was the retail industry suddenly took

off somewhere towards the end of April. And I guess as people were spending more and more time in their farms and back in their homes, they were wanting to do more home improvement moving out so we saw the tractor industry started to pick up pretty quickly, and uh so we had to figure a way to come back. And you know, we started the same thing, which is temperature checks, you know, split shift, slowly bringing people back, putting in all the plastic barriers and separate and redesigning

the production line and production flow through. So Ever since that happened has just been momentum has been gaining and so far the industryes you know, just the year today, I think industries up twenty. That's pretty remarkable. We'll talk to me a little bit um. You're about the demographics of who was buying because my understanding, my producer Paul Brenna was filling me in a little bit earlier that I think seven percent of your sales were customers that

actually never had owned a tractor before. Actually that's the people buy tractors. Wow, okay, we we left out of zero. That's trumendous. I mean, first of all, what kind of tractor are they buying? So basically we generally operate in the you know, the small track, the midden compact tractors between twenty two horseper and those are largely driven by you know, rural lifestyle, small farms in the second tractor, a third tractor, and a big farm. So they're not

the really big road cropping tractors. They're smaller in size and they operate more in the whole large homeowners and rural lifestylers. A bit of a surprise for you to see that market come alive. Yeah, it was, you know, I think pretty much the whole industry has been caught

by surprise. Uh we've seen you know, the industry inventory and the dealerships are down significantly obviously because of the huge demand, and you know, the supply chain being challenged, and you know, our ability to ramp up globally and get parts in has been a bit of a challenge. But now we're we're back on track and you know, being able to supply back in. But it was a big surprise. No, no, no, forgive me you have forty seconds and then we'll take a break and then we'll

talk some more. But the supply chain was it problematic a little bit in the beginning. Oh yes, it was, I think, you know, with shipping shut down, ports, shut down factories all over the world, also going through their own world. You know, the pandemic is global, so it's not just one country that's impacted. Right, So everything was shut down, so we had a tough time getting parts made,

getting them moved, bringing them in. Then you know, the whole challenges of the local market of getting the workers in, getting them, you know, protecting them and keeping them safe. And then even our dealers, you know, many of our dealers had to transition to this new environment, so helping them on the journey of digital marketing, helping them on

the journey of safe delivery, cleaning equipment. So there was a it was a pretty interesting and a lot of work to be done in the last six eight months that we've had to go through. I hear and one thing I want to ask you, so Charlie Pallatta, our news broadcaster, bringing that headline US covered nineteen deaths to two thousand. That is according to Johns Hopkins, these are

really troubling numbers. When you see these numbers, you know, and we're starting to see cities and certainly states cantinuing to do rollbacks and shutting down parts of their economy. What do you think about and how might that impact your business? I mean, you guys have seen kind of a benefit as more people have been home. Do you anticipate then, in an odd way, like we've seen with a lot of businesses, whether it was Netflix or some others or zoom Um or Peloton, that you will continue

to benefit as a result. Well, you know it is it is a really sad situation and you know, every

LifeLock is tough to deal with. Since the point is that the FED is announced, I think very a benign interest rate regime over the next twelve to eighteen months, so you know, money availability is there, and I'm hoping that you know, there will be one more stimulus announced fairly soon and when these two come in, and if this trend continues, I guess you know, people are going to be stuck at home and you know they need

things to do. And yeah, I do think that the tractor industry will continue to do well, and you know, people will want to improve their homes or you know, you're also seeing a trend of people, you know, with this work from home, the concept of distance distance has vanished, right, More people can work from home, and so they're moving out of the cities into you know, buying larger plots, are moving further out into bigger into a semi rural

and semi urban areas. So we think that the attractor industry should continue to see some momentum continue and over the next twelve months at least. Well, that's how it's curious about the visibility that you have at this point, yere and Um, you know, you do have to your running a company. You've got to make decisions. You've got to decide where you allocate capital. Are you comfortable to spend money at this time or do you feel like you've got to be a little bit more conservative. Well,

we have to be more conservative. We've been very careful about you know, how much and where took place and what to do. But at the same time, we've got you know, I think at least for the next the season does slow down through the winter months, so we have some time to make big decisions. But come much, I guess, come fair, but I think we'll have to have placed up beds and start moving forward. Well, and it's interesting too, I think about leadership at this time.

Talk to me about you know, I've had a lot of conversations with CEO about having to think about your employees, keeping them safe, having to think about your consumers. How do you continue to engage with them where they're also being stressed or having to engage in a different way. You talked about your dealers right, having to engage on a digital in a digital way. Yeah, that's it is. It's been it's been interesting. It's been a pretty challenging time. And I think every every day is a new day.

You know that these days when you could, you know, when you look for consistency and continuity, they look like, you sound almost like good old days now. So you're basically moving from challenge to challenge fairly quickly. I think the primary effort always is to keep people safe, right, I think that's the first effort. The second effort is to make sure that you know, you're able to keep

the wheels turning and business profitable and moving forward. So it's uh, I don't think it's any more about fighting a big fire. It's fighting a series of small fires every day and putting them out like smoking the bear, right almost. But the challenges, so, you know, we've been trying things. We've been working with dealers, Like I said, for customers, you know, we've given in payment holidays, we've tried to extend you know, more beneficial financial terms to

them to help them. Some of them have come back, A lot of them have come back to our finance company to you know, re redo their loans or you know, extend them. And so we've been working with some of that as well. Because at the end, see, I think that the important thing to keep in mind is that we're not here for the short term, right here here for the next twenty years. So uh, in a sense, this too shall pass, and you know, we'll have to work our way through this and look beyond, uh, this

crisis into better times. Based on what you said, I thought that was kind of interesting, UM, and we've talked about this. I had a UM commercial real estate guest on yesterday and talked about how he is. He's a lawyer, but works within the commercial real estate space and renegotiating and working out deals between landlords and tenants. Because landlords, ultimately, especially in kind of New York City, you don't necessarily want to lose your you know, client, your restaurant or

retail client. UM, you'd rather figure out a way to keep it going. It's beneficial to the landlord as well as beneficial obviously to the tenant. How many of your customers have been coming to you to say, listen, you know we can do this, but we just need easier terms. Has it been a large percentage, Well, it's been it's

been a it's been a reasonable percentage. I would say about ten fift of our customers did come back and we've done something enough finance companies working with them on a case to case basis basis there you know, past perform, possibility to pay, a future, ability to play and you know, uh, you know what's the kind of bridging that they're looking for? Right?

But I guess it's time we have to be flexible and you know, cry and see what we can do best together, because yes, you're right, at the end of the day, we have to you know, I have to work together. There's no magic bill that's coming out, hopefully the vaccine, but till then it just does I know, right, we just gotta figure out a way through. Just got a couple of minutes left here. Are you able at this point to kind of look beyond um a world where we are way down by COVID nineteen And if so,

I am curious for our audience. I think we think tractors, we think of big farms and farming, and you've really kind of I think opened our eyes to that there are people who are you know, doing something at home and needs some kind of tractor. Um, what are the kind of the interesting, larger, broader trends that are happening in your industry that you'll be able to really kind of focus on more once we get on the other

side of COVID nineteen. So kind of generally speaking, also in the US, you know, people who have spent their life making their careers in cities after a point in time want to go out of the city because you know, the city life is kind of makes unonymous. It's you know, your your self king out at machines and supermarkets and you know you're in a neighborhood where nobody knows you.

And then you want to go to a place where the barbon knows how to cut your hair, or the coffee shop knows how to make your coffee and you know everyone on the street. So a lot of people generally speaking, as they come close to the time and tend to move out of the city into you know, uh, semi urban and rural America and buy large properties. And

so you do need tractors at that point. We're also seeing you know a lot of people already had second homes in the country and now they're spending more time in those second homes than they were spending in the past because of the pandemic. And the next thing you're seeing is interesting, is a younger audience thanks to technology and you know, those who are working in the digital space, you know, being able to work from home, and so they're also moving out and you know, taking their kids

out as well, into these smaller communities. So I see a broad trend that's starting to happen, and I think that trend is only going to accelerate. I think, you know, the amount of che injur we've made in the last six months on work from home and Zoom or you know, tour or teams or whatever. I think it changed the way you live, right, Yeah, it's yeah, it certainly feels that way. Vin, thank you so much. Really enjoyed this

Vian properly presidency at Mahindra Agriculture North America. Joining us on the phone from Houston,