Elevated inventory persisted in nearly all segments of the used agriculture equipment market, with the used-tractor category seeing the largest year-over-year increase.
Auction values continued to fall at an unprecedented rate in July amid the high inventory, which spells trouble for agriculture equipment dealers, Sandhills Global Equipment Lease and Finance Manager Jim Ryan told Equipment Finance News.
“The gap right now between the retail number and auction number is extraordinary, which tells you obviously that dealers are having a hard time adjusting to the pricing,” Ryan said. “Once that retail starts coming down, we’re going to see that retail number across the industry drop pretty heavily between now and year end.”
While mounting inventory remained a challenge facing dealers, the used-equipment market showed some improvements in July, according to Sandhill Global’s monthly report.
Used-tractors, 100 horsepower or more
- Inventory rose 37% YoY and 1.4% month over month;
- Asking values rose 3.8% YoY while falling 0.3% MoM; and
- Auction values dropped 6.8% YoY and 1.3% MoM.
Used planters
- Inventory increased 11.1% YoY and 7.6% MoM in July;
- Asking values declined 2% YoY but rose 0.8% MoM;
- Auction values fell 18.5% YoY but climbed 3% MoM; and
- EVI spread, the percentage difference between asking and auction values, remained at a historic high of 70%.
Used combines
- Inventory jumped 9.5% YoY while dropping 3.2% MoM;
- Asking values were up 8.1% YoY but down 1.9% MoM;
- Auction values climbed 0.8% YoY but fell 0.5% MoM;
- EVI spread stood at a near-historic high of 54% despite falling slightly.
Used compact and utility tractors
- Inventory continued to fall in July, with declines of 6.1% YoY and 3.7% MoM;
- Asking values were down 2.8% YoY and 0.4% MoM; and
- Auction values dropped 5.3% YoY and 2.3% MoM.
Harvest season provides boost
As harvest season approaches, there’s expected to be an increase of combine sales and related equipment, particularly in the Midwest, Ryan said.
“There’s a lot of that stuff hitting the auction block, hitting the market,” he said. “Guys are looking to buy harvest equipment for the next couple months. So, part of the seasonality with the combine market is what’s happening right now.”
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