The market for used agriculture equipment has seen an uptick recently according to two well known industry sources. Farm Equipment writer Dave Kanicki makes this assertion with survey data from equipment dealers. Meanwhile AgWeb’s ‘On The Road with Machinery Pete’ examines the ag equipment market from thirsty Oklahoma. The consensus reached is the market for smaller and gently used equipment is heating up.
Let’s begin with Kanicki’s piece titled, “Outlook for Ag Equipment … Still a Little Iffy” as he explores the sentiment among the Ag equipment dealer audience. By no means does the story characterize the market as robust but rather more inline with expectations even as a number of ‘ifs’ hang over the agriculture industry. A summary of dealer sentiment reads
… we’re getting a fair amount of improving vibes from the dealers these days. Maybe the best of the best is that used equipment inventories are looking better than they have for some time.
Sharing the results of a survey offers stronger evidence that the used equipment market is experiencing an uptick.
According to the results of the Dealer Sentiments & Business Conditions Update survey we sent to Ag Equipment Intelligence subscribers yesterday, a net 15% of dealers reported used equipment inventories as too high. Broken down, 33% of dealers said it was “too high,” 50% said it was “about right” and 18% said it was “too low.” This is an improvement from the 23% reporting higher than desired backlogs in the previous month and the 26% average for all of 2017.
While not a robust market, used combine inventory appears to be improving year over year.
Used combine inventory levels are still problematic as a net 31% of dealers reported they are still too high, which was in line with the first quarter of the year, but somewhat better than the 37% average in 2017.
He notes this about prices for used equipment. Keep in mind improved pricing from the dealer perspective means increasing.
Pricing on used machines also continues to improve.
Lastly some quotes from equipment dealers with overall positive sentiments for the 2018 equipment season.
“We are hoping the strong spring continues. Trends are positive for under 140 horsepower[tractors] and hay equipment at the moment” … “We feel better about 2018 following the addition of new equipment lines that have been well received in the market” … “Customer mood is better. We are seeing a large number of farmers quoting new and used machinery.”
The positive trends for smaller equipment and used combines was also cited by Tyne Morgan’s story titled, “Machinery Pete: Combines With Little Age Showing Amazing Strength”. Morgan’s story begins by covering the drought in Oklahoma but meanders into the equipment market. Speaking with Shane Clifton, store manager at P&K Equipment in Kingfisher, Oklahoma Clifton states:
“We’ve seen an uptick in interest of both new and used balers, which we’ve always got a lot of what I call very ‘clean balers’ in this country,” said Clifton. That interest he says is coming from both in-store and online.
“Search traffic is up 20 percent in the last 60 days on round balers,” said Greg Peterson, host of Machinery Pete TV.
Peterson goes on to articulate his thoughts about he ag equipment market in general.
“The equipment market as a whole is a really tough market to generalize right now,” said Peterson. “Small equipment has been doing the best generally, if you’re talking mid to small size tractors.”
Just as Dave Kanicki cited above, Peterson notes the strengthening of the smaller tractors.
It’s the value of smaller tractors that continues to stand on solid footing for P&K Equipment.
“I would say we sell a lot of 200 horsepower tractors and down,” said Clifton. “We’ll sell lots of lawn and garden machinery and then we’ll a lot of used combines and 4WD tractors.”
Further generalizations about the market by Shane Clifton substantiate Kanicki’s sentiments about the gently used market as well.
Clifton says interest in older equipment is gaining strength.
“Anything that’s got a little age to it—we’ve noticed a big uptick in that,” said Clifton. “That’s really been a high seller for us and a good mover.
“Combines, we’ve seen some amazing strength on one-model or older,” said Clifton.
The agriculture equipment market is not on fire but it is showing signs of improvement. Equipment dealers are seeing smaller and gently used ag equipment moving at an increasing clip.
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