Farm equipment sales remain high heading into spring
Across the state of Wisconsin, farm equipment dealer inventory levels remain at all-time lows. This record-low inventory, coupled with high demand, continues to drive machinery prices through the roof.
In a recent report from the Association of Equipment Manufacturers (AEM), total tractor sales were up over 9% in the United States for the month of February, compared with sales data from February 2021.
“February is another positive month for ag tractor and combine sales, up overall in both North American markets,” says Curt Blades, senior vice president, industry sectors & product leadership at AEM. “Strength in the commodities markets is continuing to drive a lot of the sales growth, which we see in that continued growth in bigger row crop units. And with fuel prices seeming to be on their way up for the foreseeable future, it’s possible even more farmers will want to get in on the efficiencies that new equipment has to offer.”
Dealers and auction sites in the state of Wisconsin are also noticing the increased demand for farm equipment.
According to Ken Stauffer, Premier Livestock and Auctions in Withee, Wis., sales are as high in Wisconsin as anywhere across the country.
"Dealer lots are almost bare and it's nearly impossible to buy anything new," said Stauffer adding, “the margin between new and used equipment is lower than we've seen in 40 years."
Steve Swiderski of Swiderski Power in Appleton has also seen exceedingly strong interest for all types of equipment. He says that demand has been extremely strong and inventory is very low at their dealership, which offers primarily New Holland new and used machinery.
In addition, he says lead times are extremely long for ordering new equipment, at least 10 to 11 months or possibly even longer, depending on the make and model. So much so, that most farmers are making new purchases before the machinery has even been built.
“Inventory is very low,” says Swiderski. “New Holland can't keep up with all of the demand we have for their products.”
Even inflation and price increases due to supply limitations have not killed demand.
"There have been a lot of price increases due to supply and demand factors. We do our best to keep prices down," Swiderski says. "But, if the cost of fuel stays high we may see even bigger price increases."
With the very limited used farm equipment inventories on farm equipment dealer lots, there are record auction prices on all types of used farm equipment, as reported on machinerypete.com. In addition, dealers have been jumping into the auction market the past six months because they don’t have enough used inventory to sell..
"This is as crazy a market as I've ever seen since I have been selling farm equipment," Stauffer says.
At Premier Livestock and Auctions, Stauffer is seeing all mid-to-late model machinery (not just tractors and forage equipment) in high demand, as well as anything manufactured within the past 20 years that still holds value.
He says that skid loaders are an especially high commodity at the moment. Stauffer also mentioned that 60-70% of the auction inventory will get sold in the state of Wisconsin. and the rest goes to various places across the country, as well as Canada and Mexico.
In addition to equipment, replacement parts for repairs are highly sought after. And, the lead time on ordering parts can be very long, Swiderski says, which impacts scheduling availability and repair time.
"Our shop has been very busy doing repairs getting equipment ready for spring. We are also scheduling combine repairs, which is smart, since we never know how long it might take to order replacement parts."
Part availability is also very low at auctions, Stauffer says, so any parts that are on the market definitely bring a premium.
All in all, Swiderski suggests that it is extremely important to think long-tern in regards to your machinery needs.
"I can't stress enough how crucial it is to plan ahead and work with your dealer to understand all of your equipment options. Also, it helps the manufacturers plan better and hopefully means we can offer our customers a better deal."
Machinery Pete adds, "If you sit back and wait, you will have fewer, less appealing and more expensive machinery options."