New Tractor Sales Are Declining

[Cahaba Valley Farm]

Big units will always sell because most producers I know, turn over equipment at least every 5 years or when a unit is completely depreciated and there is no tax advantage in keeping it.

I was just having this conversation with my CPA yesterday. It seems to me there is a correlation between the 5 year tax depreciation and the 5 year powertrain warranty but he didn't think so, what's your thought about this?

 

[Cahaba Valley Farm]

Neil discusses inventory coming back up to more normal and acceptable levels now.

 

[Megawisdumb]

I stopped by this morning to take a look at an LX2610 to upgrade from my BX25. They probably had a hundred Kubota's on the lot but zero LX's and when I mentioned a Bh77 they made it sound like 2024. And the quote was north of $40k. Think I'll putt around on my BX for a tad longer.

 

[5030]

I was just having this conversation with my CPA yesterday. It seems to me there is a correlation between the 5 year tax depreciation and the 5 year powertrain warranty but he didn't think so, what's your thought about this?

I think you are on to something actually. Keep in mid that ag tractors and powered implements like combines and silage choppers accrue a lot of hours every year, many times more than any hobby tractor accrues.

I do the 5 year depreciation myself but not on my tractors because I have no inclination to sell or trade them for something with all that electronic and emissions stuff.

 

[buckeyefarmer]

Neil discusses inventory coming back up to more normal and acceptable levels now.

I went by one of Messicks locations today and noticed a good inventory.

 

[Hay Dude]

I went by one of Messicks locations today and noticed a good inventory.

I stopped in E-town Messicks and the lot is loaded. They have a nice 8970 there, but man are they pricey on used stuff!

 

[Cahaba Valley Farm]

They have a nice 8970 there, but man are they pricey on used stuff!

You're not the only one I have heard this from. They got to pay for that 30 million dollar facility some how.

 

[Torvy]

Jeeps or Samurai do not do what a SxS can do. If I just want to get around on my property, my Outback can do that. The SxS has a dump bed AND can pull a trailer. Sure, I think they are overpriced, but I also understand supply and demand.

As for tractor demand, you still see some people purchasing because they see rates rising and are fearful that will continue (rightly so). There is also pent up demand due to previous inventory problems. On the flip side, rates have already stopped others from considering a tractor (especially where it is more want than need). Other think prices will fall as the recession builds and are waiting to buy until that happens. In our case, we will soon have a need and will make the best deal we can at that time.

 

[5030]

You're not the only one I have heard this from. They got to pay for that 30 million dollar facility some how.

The glitzer the retail outlet is, the more overhead is realized, consequently, the cost of the sold products increases commensurate with the overhead cost.

If you saw my dealer's place (compared to Messicks), you'd probably run the other way. It's not much but it's paid for (other than RE taxes) and he sells volume and always has plus his service department well respected around here. In fact, I'd say he sells the largest volume of Kubota and Cub Cadet equipment of any dealer within 100 miles of here.

 

[newbury]

Are people still seeing steel surcharges or have they been absorbed into the regular pricing

Steel has come way down in pricing on the futures. Think it's less than half of what it peaked at

Far from it

It still would have a ways to go

 

[hiddentacocatneddih]

Sheet steel. Not reber

Sheet was around 750and it's high was about 2000 per ton. Hot band sheet

 

[5030]

Rebar is the cheapest grade of steel made. Usually made from scrap and the content of various ingredients is always questionable anyway.

 

[hiddentacocatneddih]

Reber is down to 3800 ish from 6000 high

So it's down a lot as well

 

[5030]

Sheet steel. Not reber

Sheet was around 750and it's high was about 2000 per ton. Hot band sheet

It's rebar btw and it's not hot band sheet either. It's either hot rolled or cold rolled coils. Sheet steel is a process of levelling coils of steel and cold rolled is more costly than hot rolled. I retired from the steel industry after 35 years. Mills roll steel in master coils which are then processed onto many items, mostly AKDQ steel coils because Aluminum Killed Drawing Quality steel is easier to work with.

 

[hiddentacocatneddih]

hot rolled coil is a pretty good standard for steel pricing.

Tractors arnt made of reber anyway

 

[newbury]

Well you all talk about it but I've got links for rebar and lumber etc.
Do you have good links to the sheet steel prices that are publicly and easily available?

 

[hiddentacocatneddih]

US Midwest Domestic Hot-Rolled Coil Steel Futures Historical Prices - Investing.com

US Midwest Domestic Hot-Rolled Coil Steel Futures historical prices: closing price, open, high, low, change and %change of the US Midwest Domestic Hot-Rolled Coil Steel Futures for the selected range of dates.

www.investing.com

 

[5030]

Kind of sad that the majority of domestic mills are now owned by offshore entities.

 

[hiddentacocatneddih]

Kind of sad that the majority of domestic mills are now owned by offshore entities.

Not sure if that is true or not.

Arcelar sold their stuff to Cleveland cliffs

Then you have nucor, SDI and us steel

 

[newbury]

US Midwest Domestic Hot-Rolled Coil Steel Futures Historical Prices - Investing.com

US Midwest Domestic Hot-Rolled Coil Steel Futures historical prices: closing price, open, high, low, change and %change of the US Midwest Domestic Hot-Rolled Coil Steel Futures for the selected range of dates.

www.investing.com

Thanks, good link, prices tend to track the rebar prices.