Tractor News What is driving up the demand for tractors?

[CloverKnollFarms]

We are likely holding off on a tractor and pole barn build at this juncture, as our investments have lost 10% or more in the past few weeks. A weak economy, plus inflation, isn’t making likely those will recover soon. The idea was to use $120k cash from those to fund the improvements... but selling those now accepts a $12k loss. We could finance to avoid some opportunity cost, but as a rule we typically don’t borrow for anything. Still on the fence.
Historically after a correction, we recover 17% or so, over 12 months... but this situation may be different.

 

[rScotty]

Costs of everything are all going up, trickle down the end product price has to go up. Deals are getting dang hard to find.

In hindsight, the economists of the 1980s got it half right. Costs do trickle down; but not profits.

One type of deal that is still available to the retiring generation are older tractors that need simple repairs. The retiring generation still has a lot of do-it-yourselfers who know how to fix things. Some even enjoy it.
But they also have cash, lots of credit, and spare time now..... I'm part of that generation, and we are aware of our strengths.
So far we prefer to buy new rather than fixing something up. If the new manufacturers can't fill the void, that might change.
rScotty

 

[Hay Dude]

In hindsight, the economists of the 1980s got it half right. Costs do trickle down; but not profits.

One type of deal that is still available to the retiring generation are older tractors that need simple repairs. The retiring generation still has a lot of do-it-yourselfers who know how to fix things. Some even enjoy it.
But they also have cash, lots of credit, and spare time now..... I'm part of that generation, and we are aware of our strengths.
So far we prefer to buy new rather than fixing something up. If the new manufacturers can't fill the void, that might change.
rScotty

Even those are getting expensive…..
But I am doing just that. Replacing a leaky front cover and some other odds & ends on the MX270 before I fell.
Sure cheaper than a 1/4 mill for a new tractor!

 

[ovrszd]

I've spoken with two local farmers recently that are seriously considering not planting this year because margins are so tight that lack of rain or a storm at the wrong time would put them at too much of a loss to justify the work. It's a hard spot to be in I'm sure. I think a lot of small or 1st generation farms are going to fail this year and some farmers aren't going to plant or are going to plant more economical crops which may not be human food and next fall/winter the country is really going to start feeling that.

Just one wannabe's opinion.

I think that dilemma would be location specific.

Here there's no discussion of not planting. Grain farmers had a very good 2021. That gave them financial leverage to purchase most of their fertilizer and chemicals for 2022 last month.

No doubt the increased cost of production will squeeze their profit margin. But I've not talked to any that aren't going to plant. For the small or 1st generation farmer his problem may be securing financing to get the seed in the ground.

Farmers need stability. And we certainly don't have that now.....

 

[sea2summit]

In hindsight, the economists of the 1980s got it half right. Costs do trickle down; but not profits.

One type of deal that is still available to the retiring generation are older tractors that need simple repairs. The retiring generation still has a lot of do-it-yourselfers who know how to fix things. Some even enjoy it.
But they also have cash, lots of credit, and spare time now..... I'm part of that generation, and we are aware of our strengths.
So far we prefer to buy new rather than fixing something up. If the new manufacturers can't fill the void, that might change.
rScotty

Funny you say that, I brought back trailer loads of equipment last spring from an estate. I fixed a single piece (5' brush hog) to sell and it covered the entire cost including fuel. I've been slowly fixing everything else up for me. It's a lot of time on some of these pieces though. Sometimes time alone, at lest for me, the issue not the will or motivation.

 

[sea2summit]

I think that dilemma would be location specific.

Here there's no discussion of not planting. Grain farmers had a very good 2021. That gave them financial leverage to purchase most of their fertilizer and chemicals for 2022 last month.

No doubt the increased cost of production will squeeze their profit margin. But I've not talked to any that aren't going to plant. For the small or 1st generation farmer his problem may be securing financing to get the seed in the ground.

Farmers need stability. And we certainly don't have that now.....

Both were small(ish) cotton guys, I don't know what the market is but I think that market has also taken some hits on the domestic side? Could be wrong.

 

[Root Cause]

I think you are right, but strangely see opposite trends, too. I see less people working on their properties and hiring me to do the work for them. Now these are very wealthy people who bought up huge chunks of fam land and have no clue what they are doing so theyre in rare air.
However, also see smaller property owners (1-5 acres) sell the lawn tractor and hiring out lawn service. I live on a private road of 15 homes on very large lots and me and one other guy are only ones who cut our own grass. All others hire it out.

I see about 1/2 my neighbors hiring out weekly lawn maintenance as well. But I obviously don't live in rare air either. I only live in this neighborhood because of my willingness to do physical labor while I had a full-time job. My thoughts come more from the lack of SCUTS and CUTS on the dealer lots. There used to be 15-30 and last year nothing, nowhere. I don't know where they went but they sold a lot of SCUTS in my area and in all colors.

 

[nybirdman]

Same as :trucks,cars,atv's,guns ,ammo ect.;a lot of demand and no products to sell.
Dealers are making MORE profit with less inventory.

 

[finn1]

Your investments have gained probably well over fifty percent over the past twelve or thirteen years. It’s nonsense to look at a four week period and start fretting and wringing your hands.

Markets go up, and they correct and go down. Look at stock charts over the past fifty years. If you can’t deal with that fact from an emotional standpoint, you should probably stick with safer investments and stay out of the markets.

No risk, no reward, though.

 

[ddbackhoe]

I think that dilemma would be location specific.

Here there's no discussion of not planting. Grain farmers had a very good 2021. That gave them financial leverage to purchase most of their fertilizer and chemicals for 2022 last month.

No doubt the increased cost of production will squeeze their profit margin. But I've not talked to any that aren't going to plant. For the small or 1st generation farmer his problem may be securing financing to get the seed in the ground.

Farmers need stability. And we certainly don't have that now.....

For me it was, 430/ton for fertilizer last year, today I was told 620/ton. Last 2 years have seen significant increases and has me second guessing alternatives. Fertilizer rep is thinking they may out of work shortly due to lack of demand.