Falling crop prices are leaving agriculture equipment sellers with an excess of unsold tractors and combines. To cope with the surplus, dealers are discounting machines, suspending new orders, and even auctioning off equipment at reduced prices.
DEKALB, Illinois, May 9 -
In April, inventory levels of high-horsepower tractors in the U.S. surged by almost 107% year-over-year, with combine inventory experiencing a 17.63% increase, according to Sandhills Global, a market research firm specializing in tracking used inventory for industrial manufacturers. During the peak years of the pandemic, Robinson said, the combination of supply chain troubles and rising demand made getting everything from parts to equipment to farmers "a nightmare."
"If you can get a good interest rate, that's what's driving the market right now," he said. Offering lower financing rates to sell inventory can result in a loss for dealers, but carrying unsold machinery can prove costlier. "Some of the stuff that is being put to auction is because dealers can't afford to keep the floor plan," Seymour said. "They can't have millions of dollars worth of inventory sitting around at a floor plan 7.5% interest rate."
Used agriculture machinery inventory, the bulk of machinery sold in the United States, is on a steady increase that is forcing dealers to auction equipment at a lower price point, said Mitch Helman, a sales manager at Sandhills Global.
EREP CFOCUS AGMACH AGRI ANLINS BULDOZ CEN CMPNY COM ECO ENV GEN GRA HMAC HMAC1 INDG INDG08 INDS INDS08 INT MACH MACH08 MCE NEWS1 PUBL WEA GB WEU AMERS US EUROP NAMER EMEA PACKAGE:US-TOP-NEWS TOPNWS TOPCMB
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