As news of large layoffs at ag equipment manufacturers make headlines and auction prices continue to soar, producers are hesitant to invest in new machinery. But is the current situation actually a good time to buy? On the latest Unscripted podcast, host Tyne Morgan brings in Greg Peterson (AKA Machinery Pete) to help unravel what’s happening.
He says that manufacturers aren’t the only ones downsizing their inventory. Farmers are also looking at their equipment with an eye toward reducing their fleet. The situation is complicated by low commodity prices. Data shows that in 2023 and 2024 we’ve seen the largest decline in farm income in history. Peterson advises producers to keep things in perspective. “We need to remember that ’21 and ’22 were the highest years ever,” he says, adding that the drop is “nowhere near what we saw in 2013 and ’14.”
Still, he understands the “silent stress” and “knots in the stomach” that many farmers — and equipment dealers — are feeling. At a recent auction in Missouri, he saw the most late-model equipment for sale than he’d ever seen before.
“The big underlying issue is the cost of new right now,” he explains on the podcast. “They’re all tremendous products, but we might have found the end of the rainbow as far as price.” Morgan and Peterson agree that at this year’s Commodity Classic in early March, the mood was upbeat as manufacturers displayed the latest models. “There was so much excitement,” Morgan recalls. “There was no angst. That’s changed.”
Peterson concurs, adding that he noticed a shift in tone — and pricing — in early June. While prices for corn and soybeans have continued to decline and producers watch their margins tighten, the cost of new equipment seems more and more prohibitive, even as dealers take pains (and make reductions) to move inventory. Peterson sees an opportunity for producers brave enough to buck the trend.
“When things get challenging, there are opportunities,” he explains on the podcast. “While others are pulling back, I’d go pedal to the metal. That’s what I recommended in 2015. Everyone was pulling back. That signals that you should be aggressive.”
Listen to the full interview on Unscripted.
