Sticker shock

[sea2summit]

Right now demand exceeds supply so there will be more supply in the works

If they can, since they can’t prices will go up.

Also, raw goods right now are skyrocketing. I think the days of seeing tractors flooding every size acreage are probably coming to a close for now. It’s just not going to make financial sense for as many people at the new prices.

 

[JJZ 109]

But, the RESALE value is amazing.

I haven't tractor shopped in over a year so I'm out of that loop. But I did just order a new truck. Trade in value on my current truck was about $600 less than the sticker price, which I did not pay when I bought it. Combined with Ford's X Plan I couldn't afford NOT to get a new truck!
As far as tractors I'm glad that I found a low (24) hour used BX2380 in 2020 and grabbed it. Saved thousands over new, even with a reasonable $600 charge to ship it from Kentucky to the NY/Canada border.

 

[Hay Dude]

On the bigger iron scene, new equipment is pretty much unaffordable and unavailable. That increased the demand for used equipment. Now used equipment has gone up 20-30%. Just purchased another large square baler based on farm machinery prices are increasing at a rate unsustainable for my operation and are actually becoming scarce. Local Krone dealer has no rakes or tedders available until April/March next year. Used farm equipment lots are picked over or almost empty. Looking for another Deere CX-20 bush hog. Dealers have them, but cant sell them. Why? because their customers new machines are back ordered and they cant turn in their used equipment.
On the smaller side, lubricants, filters, small tools have also increased. I buy cases of Lucas grease at Walmart. Last year, a tube of the green grease was $4.98. Yesterday we paid $6.98. Diesel fuel up .75 to 1.00 all day around here. All these extra expenses are going to result in increased food prices.

 

[Paystar]

I'm just glad I got my new truck before the world caught covid and that my Kubota dealer honored a year old quote on my RTV.

 

[Milo]

Demand (for most everything homes, trucks, tractors, SxS's, etc.) is high primarily due to people w/o money being able to buy at very low interest. Now that inflation is really ramping up, higher interest will have to follow, which should slow demand therefore increase supply. But at higher cost.

 

[lman]

Apparently they're content with current inflation rates or the interest rates would have already been going up. I heard a comment the other day that current inflation is fine because everybody has more money thanks to the govt. That is false, my pay went up very little this year and I don't have kids so I'm not entitled to the govt. handouts.

 

[Torvy]

Interest rates are only one of about 3 primary ways the Fed can affect the money supply, which is the biggest influence on inflation. While I agree they will need to increase rates, lower demand does not increase supply. The fed did take a small step to reduce the money supply. I generally prefer these smaller step to the rapid pendulum swings of reactionary policy.

The latest move by the Federal Reserve - May 1, 2024

HSH.com's review of the latest Federal Reserve policy-setting (FOMC) meeting.

www.hsh.com

As to increased demand increasing supply...not directly. Increased demand increases prices. Increases in price tend to motivate producers to increase supply. At this juncture, suppliers don't need more motivation. The supply problems are what economists would call a market failure. (We can forgo the dialogue about the root causes and focus on the Econ). Another key piece of supply and demand is elasticity. Some things are less elastic (think insulin). Prices have little effect on demand of inelastic goods. Elastic goods are much more price sensitive. If prices go up, demand shifts to alternatives or will be deferred. The problem today is widespread and alternatives are difficult to use in tractors. It would take reengineering to develop a viable alternative to steel. Even that would only help one of the many current issues.

 

[newbury]

As a retired couple of modest means we missed all the gov't handouts. While most of our neighbors in Mississippi were getting an extra $600/week for not working we just plugged along.
Now as higher prices hit many have a substantial cushion of cash to soften the blow.
At least I can now afford 2x4's again.

 

[oosik]

I'm just glad beans and rice haven't gone crazy. I took so long considering a new brush hog - supply is beyond sight. This craziness has to level out - sooner or later.

 

[crazyal]

Anything coming in a container from overseas is going to get extremely expensive. Someone is going to pay for all those ships sitting waiting to be unloaded, all the fines for containers sitting on the dock waiting to be transported, and for storage at the next place they get stored. Everybody is blaming someone else. Each one is coming up with a plan, like fining companies for not removing containers from the dock quick enough, that ignores reality. Money is being thrown around like crazy with the idea that it'll fix the problem. So even if a tractor is built here the parts that are needed to build it still need to get shipped here.