New Tractor Sales Are Declining

[ultrarunner]

Several put off tractors because of the take it or leave it nothing on the lot and now they have decided just to keep what they have...

It does seem we have more cycles of feast or famine than I remember...

Couldn't get contractors for love or money a year ago and now they are calling me looking for work...

 

[jyoutz]

Precious metals, too. Real estate market poised to collapse. Every investment is in the toilet, unless you’re an “insider”.
Add to that 41 year high inflation and the highest fuel prices in history and we have the worst economic forecast of my lifetime.

It’s happening worldwide.

 

[EddieWalker]

I have no idea what will happen with tractor buying over the next couple of years, but what I have learned is that you can get a much better deal once "tractor season" is over and before "tractor season" begins again in the Spring.

Last year, I noticed that prices where starting to jump on used tractors, which is what I was looking at. Reading posts on here about other brands, and deals that where being offered, convinced me to look at buying new. I was able to lock in my price for a brand new Massey Ferguson last November that was what they where advertising as a "Sales" price the beginning of the year. That with zero percent interest convince me to take the plunge and sign the papers. My tractor arrived in June. I waited 7 months for it, and ended up with a 2022 model instead of a 2021, which turned out to be very fortunate for me since they upgraded a few things, like the AC. By the time I got my tractor, the "Sales" price that I was seeing advertised in Missouri and Mississippi was $9,000 more then my price.

I haven't kept up with pricing, but I think there was a spike that may or may not continue. I haven't seen any indication that materials or labor is declining. If I was buying now, I don't think I would be comfortable paying that much money for a new tractor, but when I started looking, I wasn't comfortable with paying $55,000 for a tractor either. I'm still not comfortable with that amount, but it is what it is, and sometimes you have to go outside your comfort zone to get what you want.

Since buying the tractor, I've been amazed at how much more I can get done. My other tractor is half the size of this one and probably a quarter of the speed at getting my place mowed. It's really night and day different. Pay now for what you can use now is probably the most important part of tractor buying. With Winter coming, it's probably the best time to buy!!!

 

[Cahaba Valley Farm]

Just drove past 3 Kubota dealers between eastern PA and central Ohio. Saw 4 Kubota dealerships. Lots were very full of orange steel & plastic.

Same here in my neck of the woods. I drove down to my local dealer in the spring of this year to get a price on one of his tractors and he was practically asking MSRP minus $700 which was a rebate from Kubota. Told me how if I wanted one I better buy that day because he already had all the other ones in the crates sold. Something in my intuition told me he was lying so I waited him out to see if he was telling the truth. 6 months later and he hasn't sold a one of those tractors. They're all sitting outside his new place with for sale signs.

 

[ArlyA]

Same here in my neck of the woods. I drove down to my local dealer in the spring of this year to get a price on one of his tractors and he was practically asking MSRP minus $700 which was a rebate from Kubota. Told me how if I wanted one I better buy that day because he already had all the other ones in the crates sold. Something in my intuition told me he was lying so I waited him out to see if he was telling the truth. 6 months later and he hasn't sold a one of those tractors. They're all sitting outside his new place with for sale signs.

So did you make him an offer on the one you'd like?

 

[2manyrocks]

Suspect you're going to wait the dealer out since Powell said the Fed would raise the Fed funds rate another 1-1.25% by year end projecting the rate to be "restrictive" through at least 2023 to get back to the inflation target of 2%.

Once we get though this year's holiday sales, will be interesting to see where the economy stands in February, 2023.

 

[CloverKnollFarms]

They are also predicting historically low GDP gains for years to come. This will be a long lived downturn. 2023 will be the beginning. Unless you believe some pundits who say “there is nothing to see here, this is the best we have ever seen”.

 

[Cahaba Valley Farm]

So did you make him an offer on the one you'd like?

There was no point at that time. When you have a dealer talking like that they are firm on their asking price so all you can do is wait them out. He just built a big, new place just a few miles down the road from the old one. I bet he spent somewhere around $7-8 million on it so you combine that with cooling and maybe freezing market conditions next year and he will be left with only one option.

 

[Jchonline]

Tractor lots in my area are starting to overflow....Industry is just too slow to ramp up. By the time they have the machines to the dealer the economy has completely shifted in a different direction.
That GA factory is going to scale back quickly....

 

[Jchonline]

They are also predicting historically low GDP gains for years to come. This will be a long lived downturn. 2023 will be the beginning. Unless you believe some pundits who say “there is nothing to see here, this is the best we have ever seen”.

The only diamond in the rough is rising interest rates on short term, low risk investments. I can throw money in 3 month CDs now and make almost 4%. Hoping they get up to 8% soon!

 

[2manyrocks]

Except that inflation is eating up purchasing power much faster than interest rates are rising on CDs.

 

[5030]

A local credit union ad all week.

11 month CD at 3.5%

What good is that when the current rate of inflation is 2 times that? You are still going backwards no matter what.

 

[ddbackhoe]

There are plenty of subcompact tractors in my area, but things in the 40+ with cabs, not so much. I decided on a Kubota MX 5400, yep tractor is available but a loader wont be available until Decemberish (maybe).
I keep hearing about manpower shortages at the factory. What happened to all the people that got laid off by covid?

 

[Hay Dude]

I have no idea what will happen with tractor buying over the next couple of years, but what I have learned is that you can get a much better deal once "tractor season" is over and before "tractor season" begins again in the Spring.

Last year, I noticed that prices where starting to jump on used tractors, which is what I was looking at. Reading posts on here about other brands, and deals that where being offered, convinced me to look at buying new. I was able to lock in my price for a brand new Massey Ferguson last November that was what they where advertising as a "Sales" price the beginning of the year. That with zero percent interest convince me to take the plunge and sign the papers. My tractor arrived in June. I waited 7 months for it, and ended up with a 2022 model instead of a 2021, which turned out to be very fortunate for me since they upgraded a few things, like the AC. By the time I got my tractor, the "Sales" price that I was seeing advertised in Missouri and Mississippi was $9,000 more then my price.

I haven't kept up with pricing, but I think there was a spike that may or may not continue. I haven't seen any indication that materials or labor is declining. If I was buying now, I don't think I would be comfortable paying that much money for a new tractor, but when I started looking, I wasn't comfortable with paying $55,000 for a tractor either. I'm still not comfortable with that amount, but it is what it is, and sometimes you have to go outside your comfort zone to get what you want.

Since buying the tractor, I've been amazed at how much more I can get done. My other tractor is half the size of this one and probably a quarter of the speed at getting my place mowed. It's really night and day different. Pay now for what you can use now is probably the most important part of tractor buying. With Winter coming, it's probably the best time to buy!!!

Getting oneself out of their “comfort zone” is the BEST way to improve. We get into routines and stop trying to do new things, or we don’t do things with faster stronger equipment as we evolve.

I had a VERY expensive year. I spent a lot on upgrades and fix ups, tires, repairs, you name it. It seemed like it would be a down year with the outrageous fuel expenses and parts expenses. I still made more money than previous years because I was able to do more in less time with faster, stronger equipment.

 

[ovrszd]

Getting oneself out of their “comfort zone” is the BEST way to improve. We get into routines and stop trying to do new things, or we don’t do things with faster stronger equipment as we evolve.

I had a VERY expensive year. I spent a lot on upgrades and fix ups, tires, repairs, you name it. It seemed like it would be a down year with the outrageous fuel expenses and parts expenses. I still made more money than previous years because I was able to do more in less time with faster, stronger equipment.

Ummm, then you had an inexpensive year...

 

[Hay Dude]

Ummm, then you had an inexpensive year...

No, I had an expensive year. Of course I’m referring to expenses that were 2-3 times my previous worst year of expenses. Separately, I had acquired more farmland and more customers, plus was able to do more work by replacing slow, small equipment with faster equipment that can handle more work load. Was able to reduce the amount of man hour help I needed and replaced it with mechanization, too.

Point is, I am agreeing with Eddie Walker’s point that you have to get out of your comforts zone and take some risks, or nothing changes.

Lots more expenses, but more gross income.

 

[ultrarunner]

What good is that when the current rate of inflation is 2 times that? You are still going backwards no matter what.

I guess I will just keep my cash in the mattress?

Been going backwards for a very long time… inertia?

Open to better suggestions on where to keep essential cash for a home bound 88 year old?

 

[buckeyefarmer]

I made what I thought was a low cash offer on some land and it was accepted. I guess I wasn’t too low.

 

[nova3930]

What good is that when the current rate of inflation is 2 times that? You are still going backwards no matter what.

Shoot, now's the time to borrow $ in the long term given that interest rates haven't caught up with inflation. For my new tractor a local credit union is giving me the full purchase price for 84 months at 4.5%. With the official inflation rate at 8%+ and shadowstats inflation at double that....well that's basically free money.

Same reason we're looking to expand my wife's medical practice by buying a building for a second location. 5% down and 5.5% interest on a 30 year amortization. Again basically free money....

Also the same reason I have no intention of paying the mortgage off (3.125%) or her med school loans (2.25%). Sit on em and pay back pennies on the dollar....

ETA

I think the inflation is also a big part of the reason sales are declining like almost every other discretionary consumer good out there. Staples like food and fuel are eating up people's disposable income....

 

[Cahaba Valley Farm]

Open to better suggestions on where to keep essential cash for a home bound 88 year old?

Well that depends on how much money you're talking about