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Preparation heads off equipment concerns

Preparation heads off equipment concerns

Sprayer on lot winter scene

Supply chain issues have farmers concerned about sprayers and planters for the 2022 season, causing many to order well ahead of normal. In instances where supply has been available, prices for equipment have skyrocketed as demand has grown as well.

When Jim Cuddeback had to prepare for the 2022 season, he knew it would take a little extra time.

The Washington, Iowa, farmer said he traded in John Deere corn heads for next fall and had to place the order in November. If he was late, he wasn’t likely to receive the new equipment in time. Cuddeback also said a dealer told him a planter from Case IH needed to be ordered back in August to ensure springtime delivery.

Tim Burrack, a farmer in Arlington, Iowa, said supply wasn’t going to be an issue for his planter rebuild this spring, but his main worry was about increased cost.

Supply also hasn’t been an issue yet for northeast Iowa farmer Ryan Oberbroeckling. He said while his family was worked through some harvest equipment breakdowns this fall, all parts were able to be replaced in a couple of days.

However, there is still some hesitation when it comes to the upcoming season.

“This fall we went through many breakdowns with major things like combine transmission,” Oberbroeckling said. “We had parts within a day or two. We are somewhat worried about parts, but John Deere seems to be working hard through the pandemic.”

Kyle McMahon, founder and CEO of Tractor Zoom, an online agriculture equipment marketplace said the delays this year is going to be tough for many equipment manufacturers.

“OEMs are backed up 12 to 24 months on delivering new machinery,” McMahon said. “It’s going to be hard for them to oversupply the market today to satisfy that demand. We believe that will bring more strength to the used equipment market.”

But where supply is available, prices are up. Equipment costs have been higher, as well as costs for herbicide and fertilizer. Cuddeback said he is spending nearly five times the amount on glyphosate that he spent on the same amount last year.

McMahon said used equipment is rising in price at an unprecedented rate, with row-crop tractors up 27% in value.

“In the last 10 years, this is the fastest growth we’ve seen in used equipment prices,” McMahon said. “When we had the rally in 2012 and 2013, the biggest difference was OEMs were able to supply the market with used equipment.”

With the increase in prices and possible delays, McMahon said farmers may also be looking into keeping their existing equipment longer. That means looking for individual parts for their current machinery, which has caused other booms. One equipment upgrade, the GPS receiver, has been going for nearly 46% more than in previous years.

“People are not willing to pay large new prices,” McMahon said. “So they all end up paying more for used equipment prices because there just isn’t enough to go around.”

McMahon said this could be a great time to trade in or sell machinery, as many customers are paying top dollar for the equipment. But farmers need to have a backup plan.

“This is definitely a time that if you have equipment you don’t use all the time and you have considered selling, this is the best market to sell into right now,” McMahon said. “Self-propelled sprayers are in really high demand right now.”

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