By Jennifer Whitlock
Field Editor
Nearly one-and-a-half years after the coronavirus first invaded American shores, farmers and ranchers continue to feel the effects of a near-global shutdown.
Used farm equipment is just one of the many agricultural sectors impacted.
“The good condition, used equipment market is the hottest I’ve ever seen it,” Machinery Pete founder and auctioneer Greg Peterson told the Red River Farm Network. “Historically, mid-to-late summer is a down period. In 2021, if it’s good condition and used, the prices are up significantly.”
Global market uncertainties and stagnant commodity prices led farmers and ranchers to rein in purchases of new equipment in recent years.
But the recent influx of trade aid and pandemic assistance, combined with better prices and bigger foreign purchases of commodities, led to increased demand for new equipment. In the first quarter of 2021, new farm tractor sales were up more than 50% in the U.S., according to Association of Equipment Manufacturers (AEM).
Increased demand for new equipment collided with tightened global supply chains slowed by COVID-19 shutdowns and restrictions.
After a recent agricultural exposition in Pennsylvania, Mike Galbreath, H&S Manufacturing territory manager said the surge in demand caught many off-guard. Even his company, which manufactures its products in the U.S., is behind on fulfilling orders.
“I’ve been in this business for 20 years, and no one has ever seen anything like this,” Galbreath said in an interview with Lancaster Farming. “For this year, we ordered components ahead—steel, hydraulic lines, hydraulic motors—everything. Now, we’re ordering again and seeing delays and price increases.”
H&S Manufacturing expanded production lines to keep up with the boom but finding enough labor to man the lines remains a challenge. Galbreath noted they have purchased three factory robots to help keep production lines moving.
Now the pressure felt by manufacturers is shifting to the used farm equipment market.
“A lot of it has to do with what’s happening with new equipment. With the COVID-19 pandemic’s supply issues, computer chip issues and price of steel, it became problematic for manufacturers to get enough product,” Peterson, the auctioneer, said. “They didn’t foresee strong buying demand one year ago. Then, inventory on farm equipment dealer lots is tight.”
When farmers and ranchers can’t find the new equipment they need, they turn to used tractors and implements. Prices for used equipment have risen dramatically as a result.
A store manager for a tractor dealership told Lancaster Farming it’s been very challenging to procure used equipment. Without paying a premium, he simply can’t get enough trade-ins to maintain any inventory on the lot.
It’s the same story across the U.S., with dealerships and auctioneers reporting record-low inventories of used farm equipment.
Another issue is parts availability. Shawn Harmon, general manager for southwestern Kansas farm equipment dealer Bucklin Tractor & Implement, said while parts are not as in short supply, they may take longer than usual to come in.
“We’re all trying to work together and not keep too much on hand,” he said. “We’re working together with other dealerships to keep the farmer going.”
And things show no signs of slowing down.
About 76% of agricultural equipment manufacturers tallied second-quarter growth similar to the previous quarter, AEM reported.
With 90% of those saying they think growth will continue for the next 12 months, it’s likely the resultant drive for used farm equipment will continue, as well.