By Jennifer Whitlock
Almost a year and a half after the coronavirus first invaded US coasts, farmers and ranchers continue to feel the effects of a near-global shutdown.
Used farm equipment is just one of the many agricultural sectors affected.
âThe market for used equipment in good condition is the hottest I have ever seen,â said Greg Peterson, founder and auctioneer of Machinery Pete. Red River Agricultural Network. âHistorically, mid to late summer has been a slow period. In 2021, if it is in good condition and used, the prices are rising sharply.
Uncertainties in the world market and stagnant commodity prices have led farmers and ranchers to curb purchases of new equipment in recent years.
But the recent influx of trade aid and pandemic assistance, combined with better prices and larger foreign purchases of commodities, has resulted in increased demand for new equipment. In the first quarter of 2021, sales of new farm tractors increased by more than 50% in the United States, according to the Association of Equipment Manufacturers (AEM).
Increased demand for new equipment has collided with tight global supply chains, slowed by closures and restrictions related to COVID-19.
After a recent agricultural show in Pennsylvania, Mike Galbreath, H&S Manufacturing Territory Manager, said rising demand had caught many off guard. Even his company, which manufactures its products in the United States, is behind schedule in fulfilling orders.
âI’ve been in this business for 20 years, and no one has ever seen anything like it,â Galbreath said in an interview with Lancaster Agriculture. âFor this year, we ordered components in advance – steel, hydraulic lines, hydraulic motors – everything. Now we are ordering again and are seeing delays and price increases.
H&S Manufacturing has expanded its production lines to keep up with the boom, but finding enough manpower to fill the lines remains a challenge. Galbreath noted that they bought three factory robots to help keep production lines moving.
Now, the pressure felt by manufacturers is shifting to the used agricultural equipment market.
âIt has a lot to do with what’s going on with the new equipment. With the supply issues from the COVID-19 pandemic, the computer chip issues and the price of steel, it has become problematic for manufacturers to get enough product, âsaid Peterson, the auctioneer. . âThey hadn’t expected a strong buying demand a year ago. Then, the inventory on the lots of agricultural equipment dealers is tight.
When farmers and ranchers can’t find the new equipment they need, they turn to used tractors and implements. As a result, the prices of used equipment have increased significantly.
A store manager for a tractor dealership said Lancaster Agriculture it was very difficult to get second-hand equipment. Without paying a premium, he just can’t get enough trade to keep inventory on the lot.
It’s the same story across the United States, with dealers and auctioneers reporting record inventories of used farm equipment.
Another issue is the availability of parts. Shawn Harmon, General Manager of Southwest Kansas Farm Equipment Dealer Bucklin Tractor & Implement, noted While coins aren’t that rare, they can take longer than usual to arrive.
âWe all try to work together and not keep too much on hand,â he said. âWe are working with other dealers to keep the farmer operating.
And things are showing no signs of slowing down.
About 76% of agricultural equipment manufacturers saw growth in the second quarter similar to that of the previous quarter, AEM reported.
With 90% of those saying they believe growth will continue over the next 12 months, the resulting campaign for used farm equipment is likely to continue as well.