Used Tractors and Thrifty Growers Dominate Biggest US Farm Show

Fancy new technology usually is the star at trade shows. But at the Farm Progress Show, the largest outdoor agriculture event in the US, used tractors are the big attraction.

Farmers at the Boone, Iowa, gathering this week strolled among pre-owned John Deere machines and other equipment lined up under a clear blue sky, looking for bargains. BigIron Auctions, a provider of used farm machinery and one of the exhibitors at the show, had its biggest-ever offering, about four times the normal amount of machines.

We’re seeing “tremendous interest,” said Mark Stock, BigIron chief executive officer. A farmer from Quebec purchased a crop sprayer while other shoppers traveled from Argentina, Brazil and Israel, he said.

American farmers are turning more thrifty as ample crop supplies and weak demand have pushed grain prices to the lowest levels in four years. That’s weighing on growers’ incomes, forcing them to cut back on everything from fertilizer to equipment. AGCO Corp., whose brands include Fendt and Massey Ferguson, last month cut its full-year sales outlook by $1 billion because farmers are buying fewer tractors.

Combine harvesters, which can cost $1 million new with a full package of features to collect crops, have been under acute pressure. Back in 2022, farmers couldn’t find a new combine as prices for corn, soybeans and wheat soared due to disruptions in the wake of Russia’s invasion of Ukraine. Now, as global crop supplies have swelled, so have stockpiles of farm equipment. 

“A $300,000 combine during the pandemic is bringing $265,000 to $275,000 now,” Stark said in an interview at the show’s sprawling fields about an hour north of the state capitol Des Moines. “Is that a disaster? No, but it’s still backed off.”

On the used side, a price decline started accelerating in July, according to Greg Peterson, known as Machinery Pete and the author of a used-equipment index by the same name. “We’re relatively early yet in the current drop,” Peterson said in an email.

He says it can seem shocking when a combine that was in the $800,000-range when new sells for $400,000 at auction.

There’s also increased churn of machines only one or two years old going to auction more quickly. 

“In Brazil, some of those machines are considered almost new and the price is also much cheaper,” said Matheus Capitanio, who farms in Sorriso, Mato Grosso.

John Lawless, who farms 6,000 acres in Iowa, was checking BigIron’s auction with his two children. He hasn’t purchased any new machines for two years and has continued to cut costs. “We waited simply because it was too high to buy new ones,” he said.

The cost-consciousness trend comes just as machinery is undergoing a revolution, with increased autonomy taking over operations such as spraying and hauling crops. That’s caused costs for new farm machinery to surge to the highest ever. 

But one option for cash-strapped farmers to keep up with innovations is to upgrade their existing machines. Equipment makers including world leader Deere & Co. and AGCO are trying to accommodate farmers by offering high-tech attachments and other solutions for improving yields.

“A lot of customers are making that trade-off this year of retrofit versus buying new,” AGCO Chief Executive Officer Eric Hansotia said in an interview. 

Many attendees at the Farm Progress Show weren’t optimistic of relief for growers anytime soon. “You have a world that’s awash with grain and we don’t see how we’re going to get out of it yet,” said Stephen Nicholson, global sector grain and oilseeds strategist at farm lender Rabobank.

Still, farmers should have more bargaining power. “I think the ability to negotiate it down is going to be a lot easier for growers,” said Sam Taylor, farm input analyst at Rabobank.

This article was generated from an automated news agency feed without modifications to text.