Tractor lots are full

[Tinhack]

Going off the gold standard allowed the US to print more money. It wasn't long after that the rest of the world followed. I can remember when gold was $35 an ounce. That's what I paid for some US gold coins. I sure wish I had those coins now.

Oil and gas is also used as currency. That's another reason the dollar has fallen since 2020.

 

[2manyrocks]

I was looking at some youtube video reviews of the Branson 2515 and got a shock when one of the reviewers said the price was something like $16,000 in 2019. I think it's up to $20,900 now.

I am seeing more used farm equipment for sale now than last year.

 

[rScotty]

Why am I not surprised when a TBN thread about "Tractor lots are full" smoothly pivots into a a discussion of the history of currency? It's not only unsurprising, it makes sense.
rScotty

 

[2manyrocks]

It's frustrating to work and save money and then see runaway prices on tractors and equipment because of fiscal irresponsibility and money printing to fund it. Tractors, cars, houses....all much more expensive now because of an unending trail of someone else's stupid decisions.

 

[scootr]

It's frustrating to work and save money and then see runaway prices on tractors and equipment because of fiscal irresponsibility and money printing to fund it. Tractors, cars, houses....all much more expensive now because of an unending trail of someone else's stupid decisions.

There has certainly been some financial irresponsibility and short sighted control which has weakened the economy, weakening not only the consumer but the manufacturer as well. But hey - somebody got rich and somebody got the vote and that's all that matters at any cost right?

 

[2manyrocks]

All that matters to them is doing whatever it takes so they can spend and print $ to suit their own purposes.

 

[rScotty]

All that matters to them is doing whatever it takes so they can spend and print $ to suit their own purposes.

If that was a tractor, I'd say it needs a tune up. But honestly, I doubt that is "all that matters to them".

 

[Tinhack]

I am seeing more used farm equipment for sale now than last year.

In 2021 and 2022 dealers were buying any good used tractor because they couldn't get new stock. The prices of used tractors skyrocketed in a hurry. So now that new tractors are flowing in the supply chain, the prices have to surpass the used tractors once again because they're "new". The used tractors are not going down in price because of the high cost of the new tractors. They will keep chasing the tail until the market simply stops because nobody wants to pay the new tractor prices. That is until the used prices get bumped again due to the supply. One thing for sure, I don't see the prices of new equipment going back down unless there's a full out failure of new equipment dealers and/or manufacturers. The only dealers to hold their heads above water will be the ones who sell "real farm tractors", not the weekend warrior dealers. That's my thoughts.

 

[rScotty]

In 2021 and 2022 dealers were buying any good used tractor because they couldn't get new stock. The prices of used tractors skyrocketed in a hurry. So now that new tractors are flowing in the supply chain, the prices have to surpass the used tractors once again because they're "new". The used tractors are not going down in price because of the high cost of the new tractors. They will keep chasing the tail until the market simply stops because nobody wants to pay the new tractor prices. That is until the used prices get bumped again due to the supply. One thing for sure, I don't see the prices of new equipment going back down unless there's a full out failure of new equipment dealers and/or manufacturers. The only dealers to hold their heads above water will be the ones who sell "real farm tractors", not the weekend warrior dealers. That's my thoughts.

I'm not surprised when new anything costs more after not being available for awhile. Some of the manufacturers will have used the down time to make improvements on their new models. Those are interesting. The brands that did nothing more than raise prices stand out in a different way.

Not saying that new features alone would make my buying decision. But new features are part of what we notice. It's not all that often that we get an inside look at manufacturing priorities.
rScotty

 

[Torvy]

Used prices will fall first and furthest. If you have a 5 year old tractor, for which you paid $10k that was suddenly worth $15k due to the 'problems', you are not really out anything if you sell for $12k...or even $8k. A dealership with new inventory cost wholesale $10k and retailed for $15k. They have to pay interest on the Floorplan and other overhead does not give them much room to cut prices without losing real money. Unless ownership has deep pockets to ride it out, they cannot lower prices. That is why interest rate deals are popular. Eventually, they will hit a tipping point and will go out of business. There will be surprises to some who bought big brands because of dealer network as those networks cannibalize each other. The advantage to lower cost brands is that they are more attractive as the economy worsens. Some small dealers are also at risk, but that is lessened as they also tend to carry less inventory, have lower overhead and fewer in-brand competitors.

(Note: numbers are completely made up for illustrative purposes only)

 

[rScotty]

Used prices will fall first and furthest. If you have a 5 year old tractor, for which you paid $10k that was suddenly worth $15k due to the 'problems', you are not really out anything if you sell for $12k...or even $8k. A dealership with new inventory cost wholesale $10k and retailed for $15k. They have to pay interest on the Floorplan and other overhead does not give them much room to cut prices without losing real money. Unless ownership has deep pockets to ride it out, they cannot lower prices. That is why interest rate deals are popular. Eventually, they will hit a tipping point and will go out of business. There will be surprises to some who bought big brands because of dealer network as those networks cannibalize each other. The advantage to lower cost brands is that they are more attractive as the economy worsens. Some small dealers are also at risk, but that is lessened as they also tend to carry less inventory, have lower overhead and fewer in-brand competitors.

(Note: numbers are completely made up for illustrative purposes only)

I don't know what will happen with new prices. But I don't see good used tractor prices going down at all. Why should they? Part of the value of used tractors can be traced to people noticing that tractors don't suddenly get old, out of date, or quit working like old cars or other old appliances do. Tractors are a different type of manufactured good. It's a tool vs toy thing.

What may happen is that dealers find that they are overstocked without the ability to lower prices. The public may not be willing to buy at the higher prices. And people with used tractors will begin to notice that their used tractors work for them as well as a new one would.

rScotty

 

[5030]

That's me Scotty. No way would I even consider a new tractor. Mine will outlast me with proper care and feeding.

 

[deezler]

Why am I not surprised when a TBN thread about "Tractor lots are full" smoothly pivots into a a discussion of the history of currency? It's not only unsurprising, it makes sense.
rScotty

Not surprised either. I forgot about this thread, got a like for a post back on an early page so was checking it out again. Jump to last page annnnd.... oh of course the guys are talking about currency and economic policy LOL.

 

[Paystar]

I'm not surprised when new anything costs more after not being available for awhile. Some of the manufacturers will have used the down time to make improvements on their new models. Those are interesting. The brands that did nothing more than raise prices stand out in a different way.

Not saying that new features alone would make my buying decision. But new features are part of what we notice. It's not all that often that we get an inside look at manufacturing priorities.
rScotty

And that's what really P'd me off with Kubota and why I quit buying and walked away from the deal I had in progress.
The M7060 cab I was in the process of purchasing.....it's the "now economy model" that has been superseded by the M4. It has had no changes or updates since 2012. Then new years day comes and it goes from 66 thousand Canadian to $72,400.

Now the price of an MX 5400 cab here is what the M7060 used to be.

 

[5030]

Inflation is alive and well in Canada and here.

 

[rScotty]

Inflation is alive and well in Canada and here.

The best explanation for inflation I've heard is this:
That a small amount of positive inflation is always built into goverment run economic systems to avoid the alternative direction from zero - which would be "deflation".

Inflation is something we may not like, and is a political headache - but at least it is familiar and economists have some idea of how to deal with it. Deflation is unknown territory.

rScotty

 

[RobertEH]

And that's what really P'd me off with Kubota and why I quit buying and walked away from the deal I had in progress.
The M7060 cab I was in the process of purchasing.....it's the "now economy model" that has been superseded by the M4. It has had no changes or updates since 2012. Then new years day comes and it goes from 66 thousand Canadian to $72,400.

Now the price of an MX 5400 cab here is what the M7060 used to be.

I went LS over Kubota mainly because when I talked to the Kubota dealer, they said they could not promise a delivery date (annoying but understandable), and until it shipped, they could not tell me what price it would be (unacceptable).

 

[Snobdds]

There is going to be a lot of dealers that were making money hand over fist during and right after covid, to bankrupt.

High inventory costs and prices that people won't pay anymore is a going to take them out. Supply and demand shocks create this. Stable growth and stable prices prevent this. Depressions, not just a recession, reset this.

Get liquid and stack stacks of cash...

 

[Williy]

Well taking a cow to the grocery store could be a
crappy situation and there will be a big stink!

willy

 

[Hay Dude]

There is going to be a lot of dealers that were making money hand over fist during and right after covid, to bankrupt.

High inventory costs and prices that people won't pay anymore is a going to take them out. Supply and demand shocks create this. Stable growth and stable prices prevent this. Depressions, not just a recession, reset this.

Get liquid and stack stacks of cash...

I have seen some wobbly dealers getting bought out by stronger dealers and mergers, too. If it goes that way, then we end up with less, but larger dealers.