Inventories for most used equipment categories, including 100-175hp tractors and planters, have declined by 20-25% over the last year. This tightening supply is causing equipment values to bottom out and begin climbing, defying the expectation of a continued downturn.
The equipment market is not monolithic. While row crop tractor and planter supplies are tightening, a lingering oversupply of high-horsepower four-wheel drive tractors and semi-trucks has created distinct buyer's markets for those segments.
Lingering effects of COVID-era supply chain disruptions and higher interest rates are compelling equipment dealerships to maintain tighter inventories. This marks a structural shift away from holding large amounts of aged inventory on the lot.
Historical production booms, like the one for planters in 2012-2014, create multi-year "washout" cycles for used equipment. By analyzing these past cycles, it's possible to forecast that a significant manufacturing rebound for planters is unlikely until the 2026 or 2027 model years.
The analysis shows a strong historical correlation between used row crop tractor auction values and USDA net farm income. In one instance, the auction data correctly predicted a downturn in farm income when official USDA projections initially suggested an increase.
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