Machinery Pete: Demand Tops Supply in Sprayers
I’ve seen the same trend for the past 10 months with used mid- to high-horsepower tractors, combines and planters. Now, the trend is in self-propelled sprayers.
What trend? Aggressive farmer buying behavior. Farmers are buying nice used options as a hedge against potential:
- Downtime
- Parts issues
- Scarcity
The entire scarcity issue has also pushed farm equipment dealers to smash into the used market as aggressive buyers. They are short on used sprayer inventory and back-up machines for key customers.
In this ultra-heated farm equipment market, farmers have adroitly adapted on the fly to this new and needed aggressive mindset.
When any market becomes focused on availability, price becomes secondary. Only twice in my 32 years of covering the used equipment sector have market forces aligned this way, prompting me to advise farmers of the “Find it. Buy it. Now.” mindset.
The first time was November 2007 as ethanol ramped up. That buying push was short lived, from late 2007 into early 2008.
The second time was February 2021, and we haven’t seen the market cool. Used farm equipment values have gone up and up.
SPRAYER SURGE
Let’s get back to sprayers. Six of the seven highest auction sale prices ever on sprayers have come in the past nine months.
At the top of the list is the first sprayer at auction to crack the $400,000 barrier. A 2021 John Deere R4044 with 463 hours sold for $402,750 on May 4 in Arkansas.
In addition, a 2019 John Deere R4038 sprayer with 1,420 hours sold for $257,000 on March 2 at an auction in Finger, Tenn.
Why does this matter? Whenever record prices start pouring in from the southern U.S., it’s a telltale sign of a heated market.
Check out the chart below. Note how many sold last December. Obviously, the year-end buyers motivated by tax avoidance came out in force in late 2021.
There’s little doubt they will be in the market once again this year. Stay tuned.
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