A local farm and home equipment chain is investing in a new Fuquay-Varina headquarters and plans new retail outlets.

Quality Equipment, a retail conglomerate formed by a merger in 2008, is capitalizing on increased sales of heavy farm equipment at its 10 stores.
The company has growth in mind as it plans a 32,000-square-foot corporate office and retail space that will sit only a few hundred yards from its current location.

"We'll have more space and an updated, more modern facility," said Greg Morgan, the company's chief executive.

His company employs about 200 people across North Carolina and formed in a merger of six John Deere retailers two years ago.

And though the recession slashed demand for some types of construction equipment, high commodity prices have boosted demand for agricultural products - and the machines that Quality Equipment sells, like row crop tractors, combines and cotton pickers.

"The agricultural side of our business has been doing extremely well," Morgan said. Revels Tractor Co. relied on the same business, at the same location, for decades before it joined Quality Equipment.

Morgan declined to release specific sales numbers, but industry trends tell part of the story.

Overall, Deere & Co., which owns the John Deere brand, faced a difficult 2009.
The Moline, Ill., company's equipment sales dropped 19.4 percent to 20.8 billion last year compared to 2008. But sales are on the upswing this year. During the first nine months of the year, Deere logged $17 billion in equipment sales, up 6.3 percent from the same period a year ago. The Deere company's numbers don't always trend along with Quality Equipment, Morgan said.

Charlie O'Brien, vice-president of agricultural services for the Association of Equipment Manufacturers, said those numbers are signs of a strong year for the equipment industry and farms in general.

"The equipment that's being sold is kind of reflecting what's happening with the overall agricultural marketplace," O'Brien said. Demand for corn, cotton, rice and dairy has boosted prices higher than normal and encouraged farmers to sink more money into machines and tools.

"Whenever we see those sort of dynamics, which also fuels a general optimism, then we generally see good equipment sales," he said.

Those same trends don't benefit all agricultural businesses, though.

Carpenter Farm Supply Co. in Cary sells many of the "inputs" for farming, such as fertilizer and livestock feed. Farmers only need higher volumes of fertilizer when they buy more land. And because they tend to buy new equipment before new land, the Carpenter store doesn't see an immediate boon from a crop price increase, said Dale Carpenter, whose family has owned the store for 125 years.

Higher prices can also send feed and fertilizer prices higher, and the increased costs can eventually force farmers to sell off animals, which leads to decreased long-term demand for Carpenter's feed.

That hasn't come to pass yet, but it's a possibility.

"It is less than positive," said Carpenter.