Straggling purchases of both new and used iron is something equipment manufacturers and local dealers have dealt with for multiple years. However, it’s a trend that’s starting to turn. Ag-Power, a dealership based in Missouri, is noticing that the trend of equipment buys is starting to tick higher.
“The used equipment market seems to be coming back,” said Aaron Plattner, sales manager for Ag-Power. “In the last few years we hit the hit the lull, and we started seeing during harvest last year the comeback of used equipment.”
Platter says farmers are opting to update older equipment, and the proof is in tractor values today.
“It seems like the older series tractors are the ones that their value is just going through the roof,” said Plattner.
He says more farmers are reentering the market to buy not only due to timing, but in his area, it’s the bountiful bushels last fall spilling over into 2018 and playing a key role in purchasing decisions today.
“Yields were phenomenal,” said Carroll County, Mo. farmer Eric Woodward, reflecting back on 2017’s harvest. “We had record-breaking yields on almost every entity that we were harvesting last fall. I think 2014 was the last previously exceptional year— this was maybe even 20 to 30 bushels per acre better than that. So, it was one of those years for the for the record books.”
Greg Peterson—also known as Machinery Pete—says he’s seeing similar trends with used tractor values in the 5-to 20-year age-range boasting powerful prices.
“We’re five years into this environment, of more profit pressure, so now we’re at the point where folks are updating and what they’re looking for is the nicest used,“ said Machinery Pete.
He points out slightly used tractors—in the 1- to 2-year old age range –are also seeing strong demand. It’s that momentum that caught Plattner by surprise to kick off 2018.
“I thought we were still maybe 12 months out, and they're coming back a little sooner than I thought,” he said.
Plattner says planter purchases are impressive, with only one planter currently sitting on the dealer lot in Higginsville, Mo. Machinery Pete says the interest from people wanting to buy planters started late last year.
“There’s a lot of interest in the late model ones,” he said. “We started to see—particularly in December—the late-model prices strong particularly on 1-, 2- and 3-year old models, and search traffic data kind of exploded in December.”
He says that momentum continued into the first six weeks of 2018. Looking at the rest of the year, Plattner says if yields can be on par with last year, and prices hold, he thinks the dealership may continue to see equipment buys grow.
“We feel like machinery sales are going to keep ticking up,” said Plattner. “I don't want to say that were going to hit that bell curve and take off, but I do feel like planter and sprayer sales are really strong right now. We're pretty optimistic.”
It’s optimism that’s turning into an uptick for the equipment industry as a whole.
“I think producers are looking for that extra edge,” said Machinery Pete. “If it’s buying new, that’s awesome, but if it’s buying used they’re leaning into that opportunity.”
While prices and weather forecasts may alter daily, as a farmer, Woodward remains upbeat.
“I'm optimistic as to where this is going for 2018,” he said.
It’s a new year with a fresh start for farmers like Woodward who know winds of change are often what creates opportunity.