Concerns regarding higher input prices and rising interest rates continue to create some uncertainty when it comes to planning for farm machinery purchases.
According to the latest Ag Economy Barometer report, the increase in prices for farm equipment is the primary reason some producers are holding back on large capital investments.
As a result of higher price tags and limited availability of new equipment, the used equipment market has been picking up steam.
“We’re seeing really strong buyer demand for good, low-hour used equipment,” says Mark Stock, CEO and co-owner of BigIron Auctions. “Our lot quantities are up 30% and we’re conducting more online equipment auctions than ever before.”
Momentum of used equipment sales grew in 2020 amid the surge of online buying activity. Since then, the used market has continued to strengthen.
“The unprecedented growth has been completely commodity price driven,” says Stock. “Competition for used equipment is high and we expect to continue to see strong buyer demand for used equipment through Q2 of 2023.”
Record retirement sales
Strong demand for used equipment combined with tight farm machinery inventories on dealer lots has made 2022 a good time to be a seller.
“We’ve seen a record number of retirement sales coinciding with the baby boomer generation who are now in a position to recapture a majority of their original purchase price,” says Stock. “The items are well-cared for, and in some cases, the equipment is bringing more than what the owner paid for it.”
Stock says this trend applies across all equipment categories including agriculture, construction and transportation.
“The bonus of these farmers retiring at a time when the market is really good is that many are generously donating their proceeds to their local firehalls or hospitals or reinvesting it in other community spaces,” he adds.
Recent auction activity
While inflation, energy prices and rising interest rates have spurred speculation of a recession on the horizon, Stock says he hasn’t seen these factors affecting used equipment purchases.
“Many established farmers are upgrading their machinery with cash, so we haven’t seen much pullback yet,” he explains. “For younger buyers who need to borrow money it’s a different story. Interest payments add up and there’s more risk involved, so we may see them making do with their current equipment.”
In terms of recent sales, Stock says planters and drills have sold extremely well, despite the fact they won’t be in the field until nine to ten months from now. With the heavy harvest auction season approaching, combine purchases are ramping up as well as interest in draper heads and grain carts.
“Online auctions are all we do and both buyers and sellers benefit,” says Stock. “The equipment stays at the owner’s property helping them to avoid freight costs, and all parties are saving time and fuel both directions.”
BigIron Auctions has served as an industry leader for over 38 years, reinventing the way used farm, construction, and transportation equipment is sold by featuring weekly online auctions every Wednesday. BigIron’s recent acquisition of Sullivan Auctioneers will grow it to one of the largest unreserved online auction businesses serving rural America, selling tens of thousands of items weekly to registered bidders representing a global marketplace.
Used equipment financing
No matter how you choose to acquire machinery, AgDirect has attractive rates and ag-friendly financing options to meet your needs.
“As the used equipment market continues to evolve, more and more producers are looking to make purchases at auctions, both traditional and online, and through private party transactions,” says Cory Nordhausen, vice president of AgDirect sales in the western region.
“AgDirect works with customers buying used equipment through these channels in addition to the traditional dealership model,” he says. “From financing terms to interest rates, we have the tools and resources, like our online financing application or AgDirect Mobile app to help you look at each scenario independently, compare options and move quickly on a sale.”
Get started with AgDirect equipment financing today by asking for AgDirect at the dealership, applying online, locating your nearest AgDirect territory manager or contacting the AgDirect financing team at 888-525-9805.