The used agriculture equipment market tallied a victory last month as dealers found pricing sweet spots and the auction market stabilized.
Used inventory declined month over month and year over year in every major category in May, with dealers seeing increased sales of equipment priced below $100,000, Sandhills Global Equipment Lease and Finance Manager Jim Ryan told Equipment Finance News.
“There’re buyers there, and stuff is moving, and there is some optimism in that range,” he said. “The problem you’re getting into is everything over that — your 300-horsepower tractors, your larger combines.”
Dealers should liquidate these types of equipment in the coming weeks before they flood resale markets and new models arrive, Ryan said.
“That whole dealer dump will typically happen in August, September, at the end of the year,” he said. “You’re going to see that in July this year, 100%. … I would dump now because that market is going to get saturated very quickly here in the next 30 to 60 days,” he said.
Nonetheless, decreased used inventory across the board is a positive sign for a market that’s been hampered by high interest rates, aggressive new equipment incentives and low farm income since last year.
The used compact tractor and planter markets saw the largest inventory declines in May, according to Sandhills Global’s June 4 report.
Used tractors, 100 horsepower or more
- Inventory fell 0.7% YoY and 2.5% MoM;
- Asking values decreased 6.4% YoY and 1.9% MoM; and
- Auction values fell 4.1% YoY and 2.1% MoM.
Used planters
- Inventory dropped 13.5% YoY and 3.7% MoM;
- Asking values declined 2% YoY and 3.5% MoM; and
- Auction values decreased 6.7% YoY and 6.1% MoM.
Used combines
- Inventory fell 5.5% YoY and 0.1% MoM;
- Asking values rose 0.2% YoY and 1% MoM; and
- Auction values jumped 7.7% YoY and 2.4% MoM.
Used compact and utility tractors
- Inventory dropped 24.1% YoY and 3.8% MoM;
- Asking values increased 1.2% YoY and 0.1% MoM; and
- Auction values rose 0.3% YoY, but fell 0.4% MoM.
Dealers see stabilizing auction market
Dealers are seeing continued improvements in the auction market in terms of pricing stability, but it’s important to recognize that it varies based on the equipment type, Josh Gruett, general manager at Waupun, Wis.-based Waupun Equipment, told EFN.
“There are certain categories that have strengthened, but then there are some that are weakening a little bit, but nothing is plummeting,” he said. “Last year, a combine, row-crop tractor, self-propelled sprayers, some of this stuff every month was 5% lower than the previous month. Now, there’s a lot more stability. It’s kind of reached a plateau of sorts.”
