Farm Progress

Could equipment prices be softening?

With inventory increasing, machinery and equipment sales are uncertain.

Andy Castillo

March 1, 2024

5 Min Read
Showgoers browse booths at the 2024 National Farm Machinery Show
BIG BUSINESS: Showgoers browse booths at the 2024 National Farm Machinery Show in Louisville, Ky. The annual event attracts about 300,000 attendees and more than 800 exhibitors displaying thousands of agricultural products.Photos by Andy Castillo

As a mild winter wanes, prices for both new and used machinery have seen downward pressure — a welcome sign for farmers looking to update equipment lines.

“Our used market is down a little bit from last year, but holding good,” said Chris Emberton, a representative for Wright Implement who was showcasing John Deere equipment at the National Farm Machinery Show, held in mid-February in Louisville. Wright Implement sells equipment at 15 locations throughout Kentucky and Indiana. “Things are optimistic, as far as not ‘dropping off,’” he said.

In the heavy-machinery market, Stan Taylor, representing Louisville-based Boyd CAT, says construction equipment sales are up, coal mining equipment is down, and agricultural equipment is somewhere in the middle.

Showgoers to the National Farm Machinery Show browse Boyd CAT’s products

“The ag guys I’ve talked to say it’s a mixed bag,” Taylor said. “They’re not sure where it’s gonna go.”

Equipment’s ‘new norm’

Shaking off pandemic-related supply chain hiccups, new and used equipment markets have emerged in a new norm. Machinery manufacturers are making up for lost ground. An influx of new inventory could soften used prices in the near future by “putting downward pressure” on asking prices, according to the most recent January market report from Sandhills Global, a media brand that connects buyers and sellers of equipment.

“Late-model inventory is building up on dealers’ lots, which can lead to lower retail pricing in the near term,” said Ryan Dolezal, sales manager at TractorHouse, a trading hub for spare parts and used equipment.

This outlook is in line with a recent trend. In December, Sandhill Global’s monthly report highlighted a “consistent decline in asking and auction values” of equipment due to “oversupply and softer demand.”

Kinze’s new 567 planter at the National Farm Machinery Show

Since last January, used farm equipment inventory has increased over 35% across the brand’s market share. Meanwhile, entry prices for new equipment are on an upward trend as the new machinery market skews toward “high dollar” machines, the report says.

“A typical combine costs 20% to 30% more than it did a few years ago,” Dolezal said. “However, those units are depreciating much quicker in the current market compared to past years.”

Larger machines

New machines cost more these days because they are larger and more complex than ever before. That size increase is being driven by nationwide consolidation of farming businesses. Agriculture as an industry is donning a more corporatized structure, according to Kurt Coffey, head of Case IH North America.

“What we’re seeing is a lot of consolidation,” Coffee said at a Florida launch event for the new AF11 Combine. “We realize MMA [macro-management of agriculture] consolidation is going to create larger farms, less farms. Hand in hand with that is the notion of professional farming. At times, it’s corporate.”

More broadly, more larger machines are needed to meet increasing demand for more food products and agricultural land. The global tractor market, for example, is expected to grow from 2,000 units shipped in 2023 to more than 2,500 annually by 2029, according to a recent market analysis by Arizton.

Cautious buyers

Anecdotally, as used price tags hold and new costs increase — at least for the moment — buyers are a little more cautious than they were before. That may be due to lower grain prices leading to tight margins this year. Equipment reps at recent trade shows say there aren’t many people on the fence these days. Buyers come to booths informed. They know what they need.

“It’s either ‘Yes, I'm for sure in the machine market,’ or ‘No, I’m not in the market,’’” said Mike Langridge, a representative at Alta Equipment. Langridge was at the brand’s booth at the New York Farm Machinery Show in Syracuse. 

H&S Manufacturing’s new Twin-Flex Merger at the New York Farm Show

Historically, farmers with year-end money to spend would show up with their checkbooks, looking to offset tax burdens. But that phenomenon has waned a bit, he said. “Folks are more mindful,” he added.

In this new norm, equipment dealers need to focus on customer needs, Langridge said. Those businesses will be well positioned to weather whatever marketplace volatility comes next — be it from a farm economy downturn or an outlier like the upcoming presidential election.

“Whoever is supporting the customer will have the best luck,” he said.

Jeremy Morse, who was representing Campbell, N.Y.-based Jim’s Equipment Repair at the New York show, agreed. “I think trust is still the biggest thing,” he said. “Farmers are more open to trusting someone and getting to know someone.”

This relationship is imperative to both farmers, who value trust when investing their hard-earned money, and to the dealers that rely on loyalty when the going gets tough. So far, Morse said business this off-season has been about average.“I wouldn’t say it’s strong, but it’s not slow,” he said, noting that lower interest rates have helped. As farms emerge from a mild winter, he’s optimistic that the marketplace will strengthen. The warmer weather “has people’s eyes on spring,” he concluded. “Since the start of February, we’ve seen an uptick.”

About the Author

Andy Castillo

Andy Castillo started his career in journalism about a decade ago as a television news cameraperson and producer before transitioning to a regional newspaper covering western Massachusetts, where he wrote about local farming.

Between military deployments with the Air Force and the news, he earned an MFA in creative nonfiction writing from Bay Path University, building on the English degree he earned from the University of Massachusetts Amherst. He's a multifaceted journalist with a diverse skill set, having previously worked as an EMT and firefighter, a nightclub photographer, caricaturist, features editor at the Greenfield Recorder and a writer for GoNomad Travel. 

Castillo splits his time between the open road and western Massachusetts with his wife, Brianna, a travel nurse who specializes in pediatric oncology, and their rescue pup, Rio. When not attending farm shows, Castillo enjoys playing music, snowboarding, writing, cooking and restoring their 1920 craftsman bungalow.

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