Propelled by tariffs, new-equipment prices are spiking, and buyers are pivoting to the next best thing: used farm machinery.
“These factors, coupled with elevated interest rates and diluted commodity prices, have made used inventory a more appealing option,” says Jackie Glassman, president and CEO of BigIron.
With more farmers browsing auctions, used-equipment prices are likewise ticking upward — at least in the short term.
“At BigIron and Sullivan Auctioneers, we’re seeing that shift in real time,” she says. “In May, nine of our 10 highest-selling machines were sprayers, with multiple 2024 John Deere models selling for $415,000.”
Glassman says these higher-than-average prices reflect emerging trends: Top-notch used equipment is in demand, and buyers are adapting to the economic uncertainty by shifting their shopping habits.
“Farmers and fleet managers are adapting by turning to online auctions, where they can quickly evaluate options nationwide and make competitive purchases without the long lead times. The market is evolving fast, and the value proposition of used equipment has never been clearer,” she says.
On the other hand, the time to buy may be now for a farmer in the market for a certain piece of new equipment. That’s because the current market slightly favors buyers. Demand is declining, and late-model inventory is rising. It’s been five years since the pandemic halted supply chains. With back orders filled, dealers have plenty of inventory.
Given this surplus, Eric Wareham, senior vice president of government affairs at the North American Equipment Dealers Association, says machinery brands are “clamping down on manufacturing” and pushing late-model machines off the lot.
Used market stabilizing
But while tariffs inject uncertainty, Jordan Clarke, senior vice president for Canada sales at Ritchie Bros., highlights a longer-term North American pricing trend. Since spiking in 2020, used-equipment prices are flattening out.
“We’re seeing a bit of a cooling off over a four- or five-year period, for sure. Nothing that’s necessarily drastic. But from the information that we track, there’s been a steady decline in pricing,” he says.
Compared to other equipment markets, agriculture is relatively stable and less impacted by geopolitical influences such as the Russia-Ukraine war and trade disputes.
For farmers considering the cost-benefit of temporarily streamlining overhead due to economic uncertainty, off-loading a high-quality machine now might not be a bad idea. It might fetch a decent price, and Clarke expects this might be as good as it gets for a little while.
“If there are assets a certain customer wants to bring to market, I would suggest they do it now rather than later. I don’t see any kind of increase or spike that would bring pricing up six months from now or a year from now,” he says.
High prices sticky
U.S. farmers face double jeopardy: Prices and inflation are heading up, while projected revenue is down.
The Bureau of Labor Statistics’ latest Consumer Price Index indicates that prices rose 2.3% over the last year. Wareham expects this combination of increasing machinery costs and reduced revenue to cause farmers to delay purchasing. “We’re still in a limbo of not knowing or having certainty about what the future is going to look like,” he says.
Clarke agrees. Holding off purchasing might be the best call.
“I would call this probably a neutral market more than anything. It’s a good time for buyers to buy and a good time for sellers to sell. If you are definitely not in the market to buy right now and you can hold off six months, it might be OK just to stand on the sidelines,” he says.
Eventually, Wareham expects these higher new-equipment prices to stick around. History shows once prices pop up, they likely won’t drop.
“At some point, people will need to move forward regardless. We still have to produce. We still have to farm. We still have to go out and make our living regardless of what the circumstances are,” he says.