The used agriculture equipment sector showed resilience in February as auction values ticked up in most categories, but dealers still face challenges.
Used inventory fell year over year nearly across the board for a second straight month in February, signaling stability for a market that dealt with volatile pricing and subdued sales for much of 2024.
With farmer sentiment rising and OEMs scaling back production, dealers are better positioned to offload used equipment as pressure to take in inventory eases, Sandhills Global Equipment Lease and Finance Manager Jim Ryan told Equipment Finance News.
“Dealers are not taking trades right now,” he said. “There are a lot of dealers that are not taking any new inventory in.”
While dealers’ resistance to taking trade-ins requires more businesses to sell used gear on their own, this trend could yield more favorable outcomes for consumers, Ryan said.
“A lot of these farmers and producers and things like that that have equipment, typically their channel is to go back to the dealer,” he said. “Now they’re not. So, those guys are hitting the open market on their own and probably asking a little bit more than what they were to get for a normal trade in.”
The inventory decreases in February came amid mild improvements in both auction and retail markets, according to Sandhills Global’s March 5 report.
Used tractors, 100 horsepower or more
- Inventory rose 6.1% year over year and 0.8% month over month;
- Asking values dipped 4.6.% YoY and 0.1% MoM; and
- Auction values declined 6.3% YoY and 0.1% MoM.
Used planters
- Inventory fell 8.6% YoY and 5.6% MoM;
- Asking values fell 3.7% YoY but rose 0.9% MoM; and
- Auction values dropped 1.1% YoY but increased 0.8% MoM.
Used combines
- Inventory fell 5.8% YoY but rose 1.6% MoM;
- Asking values dipped 0.4% YoY and 0.3% MoM but are trending upward; and
- Auction values jumped 1.1% YoY and MoM.
Used compact and utility tractors
- Inventory decreased 24.1% YoY and 2% MoM;
- Asking values fell 3.4% YoY, but rose 0.1% MoM; and
- Auction values were down 2.9% YoY, but up 1.8% MoM.
Online auctions bear fruit
Many dealers have avoided dumping equipment via auctions in recent years due to their unpredictability.
However, online auctions have led to improvements in this market due to the transparency and convenience they offer, Derek Weaver, sales manager at Leola, Pa.-based Agriteer, told EFN. The dealer has primarily used auctions to purge smaller hay equipment, but that is starting to change, he said.
“This year, we’re starting to try to move some of our big equipment at auction,” he said. “For the last four years or so, we’ve been selling online. Thanks to COVID, online auctions have become very popular.”
While the auction market may be stronger than previous years, the dealer still typically holds onto large agriculture equipment for as long as possible, gradually lowering prices before taking that route, Weaver said.
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