Price Check What did you pay for your tractor

[Doughknob]

Nice change. We were talking about inflation.

Yes, inflation of tractor prices because of supply chain issues causing no supply, thus short term prices go up if demand stays put or increases. I dont know how else to say it.

 

[Torvy]

Inflation is not just about tractors. If prices were just up on tractors it would not be called inflation. Inflation is mostly about the money supply. The tractor prices are rising even faster because of demand, not supply. Demand is increased because, among other things, people see prices rising across the board and are trying to get assets before the next increase. Inflation spirals. The supply chain issues are less about Supply (here I mean the Economics term) than about logistics delivering that supply. Tractors are being built and sold in record numbers. There are a few ancillary products that are delaying delivery...tires, for example.

In short, the Economic inflation is the problem. The supply chain issues are being used as a diversion to mask serious problems in the economy due to monetary policies. It is rather like focusing on a black eye and ignoring a gaping chest wound.

 

[lman]

Look like? what does that mean? No one can tell future reality by “ look like”. History says when supply goes up enough to beat demand, prices will retreat. May take years, but will happen.

Will wages come back down also. Don't think so. Higher wages are feeding inflation.

 

[mo1]

Will wages come back down also. Don't think so. Higher wages are feeding inflation.

In general wage increases are to catch up with inflation that already happened and not the driver of inflation. Overall wage growth is lagging inflation by quite a bit. In general entry level has seen a pretty big increase in wages but above entry level has seen far less of an increase in wages, if they have seen any at all. In my field, entry level has seen a pretty decent bump but above entry level has really not, execs excluded of course. A ton of people have permanently left and those of us remaining are really only seeing "higher wages" by having more overtime, the regular wages haven't budged. I expect as more people continue to quit due to effectively declining pay in the face of the inflation, and the conglomerates we work for finding it ever harder to have enough staff to remain open, they will be forced to raise wages. We are starting to see this as "temporary emergency bonus pay" for some very specific positions and very specific situations, but with the general short-staffing, pay increases will become more widespread as more positions become short-staffed and will be paid more to get them filled.

I don't think pay will come down much after it goes up to catch inflation as the inflation doesn't go away. The money supply was permanently increased in size by about $5,000,000,000,000- that money doesn't just go away. The only reason wages will go down is if a bunch of people who had quit suddenly come back into the workforce and there is a glut of workers. At least in my field I don't see this happening as the ones who left were typically later-career who retired early or people who left the field entirely.

 

[mikester]

I paid more than I wanted to 7 years ago, but much less than I would if I bought it now.

"The best time to plant a tree is 10 years ago. The second best time is today."

 

[oosik]

2009 - brand new open station Kubota M6040 with rear blade, FEL & HD bucket, Rim Guard in rear tires - - $32,000.

 

[Reddogs]

This is correct at its most basic level. The problem is how they are building cars/trucks today. All I need is a truck with a Chassis, Gear Box, Engine, and Body. Give me manual seats, windows/locks and an OK radio and that's all need. This business of tailgates that open in 5 different directions, back-up cameras, state of the art computers, 20" wheels and tires, and the list goes on. My Very Basic 2019 F-150 XLT 4x4 had a Sticker Price of $42K, I bought it new in April of 2020 for $28,500. Ford did NOT lose money on it, for sure. It just shows you the mark-up on the trucks these days. My 1994 F-150 XL had a Sticker of $15K, I got it for $12K. Considering inflation $12K = $24K today. The cars/trucks are just like everything else today. . . Bigger - Better - Fancier - More Expensive.

Never in my life did I dream the BIG Selling Point of a pick-up truck would be the stinkin' Tailgate! ! !

Arrrrrrgh! ! !

And you have to get those heated seats.........

 

[Torvy]

In general wage increases are to catch up with inflation that already happened and not the driver of inflation. Overall wage growth is lagging inflation by quite a bit. In general entry level has seen a pretty big increase in wages but above entry level has seen far less of an increase in wages, if they have seen any at all.

I don't think pay will come down much after it goes up to catch inflation as the inflation doesn't go away. The money supply was permanently increased in size by about $5,000,000,000,000- that money doesn't just go away.

Wages, usually do not start the drive in inflation. Wages do continue inflation into an upward spiral. You are correct in identifying the root cause, but wages will continue to fuel that fire until we get an adjustment.

Non-wage inflation will typically show lagging wages, especially when people are in denial that inflation is even happening. Foolish positions like assuming covid or supply chain issues are causing a temporary up tick leads to delays in addressing wages and in addressing the root causes.

Wages could cause inflation, but it would mean a significant artificial increase in wages at a national level.

 

[Doughknob]

Will wages come back down also. Don't think so. Higher wages are feeding inflation.

Wages do not typically come back down like prices do. But in certain pockets/sectors/areas wages my very well drop periodically if there are a lot of people looking for the work.

Someone please show charts/data where there is such an increase in demand of things that that is the reason for inflated prices. I have heard of no such drastically increased demand. It is due to supply shortages.

 

[Root Cause]

Last June
Used Mahindra CUT, 38 hp, 2638, LN
FEL 1k lb lift, looked new
New, Backhoe/ 21k force
Had 80 hours on clock
$28,500