New Tractor Sales Are Declining

[2manyrocks]

Back on topic:
One of my local dealer’s lots is stocked full of new Fendts and a couple of new Masseys. Plenty of them, but very few used tractors. I think when the supply chain interruption happened, buyers of new tractors had no new tractors to buy, so they bought up the nations supply of used tractors.

I am looking for a used 150HP loader tractor and they are non-existent and over priced when you find one.

I don’t know if new sales are declining, but my salesman told me leasing is rapidly gaining popularity.
My theory of why leasing is taking off is mainly 2 reasons.
1. Leasing costs less per month (simplistic, but true)
2. New tractors are fully computerized and the typical wrench & grease farmer can no longer fix them. Leasing solves this because service is included.

Buyers looking to avoid regen on new tractors would tend to buy pre-emissions tractors.

Haven't looked at leasing myself, but I would assume the manufacturers' pricing structure may tend to push buyers towards financing or leasing options for new tractors. There is probably more money for them to make on the leasing and financing side than on the actual sale of the tractor.

 

[CloverKnollFarms]

I know I’ve spoken to dealers who are not taking many trades, because they see the writing on the wall, and those used tractor values are dropping. The current owners want 2021 values, and 2023 won’t support it, so the dealers just aren’t dealing for fear they will take a bath.

 

[WM75Guy]

My neighbor just got this.
View attachment 777985

That's a nice looking tractor.

 

[CloverKnollFarms]

When I see dealers listing a 3year old unit that sat in the sun and rain at the previous owners property, for $2k less than new… I see the problem with trade ins. If the dealer REALLY needs to extract that price on that unit, good luck when you have a lot filled with new units with full warranty and no PO who used it as bulldozer.

 

[5030]

My dealer is very busy and has been right along but then most of his business is ag related.

 

[Hay Dude]

Last weekend, I hesitated on buying another Challenger MT 545B. it was probably the best deal I found on a perfect tractor for my needs. I figured nobody would buy on Saturday New Years Eve.
Man, was I wrong. Called Monday and it was gone.

 

[david46]

Unfortunately, the sales of new tractors will fall because they are quite expensive, who will really need it will buy it and who won't

 

[5030]

My dealer is continuously asking me when I want to sell my pre 4 tractors... Not in the foreseeable future. Someday, I'm sure as they are an investment. Best thing I did was add the Racor / Conus base to remove all the junk that accumulates in the fuel tanks.

 

[5030]

Unfortunately, the sales of new tractors will fall because they are quite expensive, who will really need it will buy it and who won't

Discretionary purchases will become paramount as spendable income wains. At least for smaller units. That don't apply to large ag related units and my dealer tends to sell large units.

 

[Hay Dude]

From a produce, dairy & beef farmers perspective, I would think they are now starting to realize more cash flow. A gallon of milk is now $10. Fresh produce and beef are now double what they were 2 years ago. We were told this would happen as a result of diesel, fertilizer & seed prices.
I think the large scale farmers are now starting to buy newer equipment, probably to avoid paying taxes on the new income from soaring food prices.
End point is new tractors are going to be selling. My AG dealers lots are filling up for spring. Lots of Fendts out on my one dealers lot.

My hope is they trade in lots of perfectly good used tractors, balers, rakes, tedders, spreaders, etc.. Thats where I get my deals.

 

[K5lwq]

What kind of milk are you buying for $10 a gallon?

 

[5030]

Yep, lightly used and well maintained unlike abused and poorly maintained smaller units. Farmers tend to take care of equipment because they look at the trade in value. Kimd f waiting for the seed producer down the road to get his first 'electric' JD utility tractor. That should be a real hoot.

 

[5030]

What kind of milk are you buying for $10 a gallon?

The milk you'll be buying in this upcoming year. Simple answer.

 

[Hay Dude]

What kind of milk are you buying for $10 a gallon?

I’m personally not paying that, but some are. It’ll get there. Trust me.
I am part of a farming community and the ones I know still in dairy are starting to see some really high mailbox prices on their milk.
That means $10 gallon milk is coming.

 

[K5lwq]

The milk you'll be buying in this upcoming year. Simple answer.

The key word you missed is “now”? I paid $2.99 Yesterday for a gallon of whole. I can buy fresh Guernsey milk for $5.

 

[K5lwq]

I’m personally not paying that, but some are. It’ll get there. Trust me.
I am part of a farming community and the ones I know still in dairy are starting to see some really high mailbox prices on their milk.
That means $10 gallon milk is coming.

That make more sense. Not doubting the predictions the now part confused me.

 

[PreacherM]

I'd much rather pay $10 for milk than gas.

 

[5030]

The key word you missed is “now”? I paid $2.99 Yesterday for a gallon of whole. I can buy fresh Guernsey milk for $5.

Not at all. Now don't count. Future does. Being lactose intolerant, I don't consume it anyway.

 

[5030]

I'd much rather pay $10 for milk than gas.

That is coming too. Be patient.

 

[Hay Dude]

That make more sense. Not doubting the predictions the now part confused me.

City folks are paying in the high singles. Look at the overall prices you are paying for fresh food.
Also look at how we have switched from fresh food coming from California and Florida now coming from Mexico. That is helping to combat higher prices, too.

Overall point is that farmers are now seeing the higher prices convert to higher gross profits and buying tractors will once again become strong as the supply chains catch up.