Montana Plows Through Market

Rodney Miller, CEO of Montana Tractors in Springdale, said the company is banking on the fact that its tractors aren’t a necessity.

“People don’t buy a [small] tractor because they really need one,” Miller said. “For the most part, they buy a tractor because they want it. It’s kind of like a boat.”

The Montana customer isn’t farming for the money.

“Maybe they just have two or three horses or a few cattle, but they want to do something that keeps them remembering their youth,” Miller said.

The wholesale tractor company plans to ship 3,500 tractors and do $65 million in sales in 2005, its first full year of business.

Montana recently closed a sale on 20 acres of land a mile north of its current location off Thompson Avenue. Miller said the firm plans to be in the new headquarters by the end of 2005, which will include a new assembly plant, office facility and dealer-training facility.

It supplies tractors in the 27 to 57-horsepower range, which come in 13 different models and retail from $10,000 to the mid-$20,000s.

Partners J.B. Hunt, Charles Goforth and Dan Downing founded the business in May 2004 at the former location of the tractor distributor Agracat.

Miller came to Montana Tractors in August from Valtra Inc., where he helped the Finland-based tractor manufacturer set up its U.S. operations in 2000 in Benton, Ill.

Montana went from shipping 20 tractors per week in August to 55 tractors per week in December, or about $1.1 million in wholesale sales per week, up from $200,000 to $300,000 when Miller arrived. The company is currently shipping an average of 60 to 70 tractors per week. Montana ships the tractors to its dealer network of about 170 in 42 states. Miller said he gives God all the credit for the company’s faith-based success.

He said Montana’s long-term goal is to be one of the top five small tractor distributors in the United States in its horsepower range by 2010. He hopes to have signed two more suppliers by the end of 2005.

Miller said his firm tracks livestock ownership because most of its retail customer base comes from the “weekender” farmer who uses a tractor for grass management.

Montana Tractors are meant for use on tracts anywhere from 2 to 40 acres, Miller said.

Miller said the small tractor market, like the one Montana is in, has been growing at about 10 percent per year and has for more than a decade.

The Association of Equipment Manufacturers estimates that U.S. retail sales for tractors under 40 HP hovered around 144,000 in 2004.

“It’s been recession-proof,” Miller said. “It’s grown through all the adversity in the ’90s, where the big tractor market has pretty much shrunk over the last 10 years.”

About 70 percent of small tractors are sold in a Southeast belt line from Houston to Philadelphia that stretches 300 miles on either side, he said.

Montana Tractors offers implements such as box and rear blades, front and rear bale spikes, front-end loader, finishing mower, rotary cutter, yard rake, post-hole digger, field cultivator and tandem disk.

Montana imports the tractor body from LG Electronics of Seoul, Korea, and sells the tractors under the Montana name. Further assembly is done on-site in Springdale, which includes adding the wheels and any attachments.