An Oversupply of Used Equipment Offers Opportunities in a Tough Market

The U.S. agriculture economy in 2024 is facing an unusual combination of events, leading to an unpredictable machinery market. Despite this, farmers can still improve their equipment fleets if they know where to look. Options are available, and in some cases prices are approaching historic lows.  

“I think we’re going to be in the middle of 2026 before we level out into a new normal,” says Moving Iron podcast host Casey Seymour. “I’m anticipating a very active auction time frame through December where if you have the money, you’re going to be able to get some bargains. And I think that will hold true for the next two years.”

Farmers will have the opportunity to spend this year, but probably on what they need, not what they want, says Andy Campbell, director of insights at Tractor Zoom. He believes the ag economy is entering a valley, not a “V.”

“I don’t think we’ll hit bottom and then rebound back up,” Campbell says. “As farmers, we are exploring how we do things differently. I’m talking to farmers who are looking at ways to work more efficiently, because short of a ‘black swan’ event [a highly unusual occurrence], I think we’re in a multi-year lower cycle.”

Mark Stock, CEO of BigIron Auctions, says the auction market has always ebbed and flowed with interest rates and commodity prices. But this one could lead to a farmer exodus. 

“We’ll see the largest amount of people exiting agriculture in the next six years,” he predicts. “As the baby boomers retire, there’s going to be a lot of machinery hitting the market.”

He already notes an uptick in the number of farmers looking to retire in 2025 because it’s “just not any fun.”

“When you go out and work all year, and realize you’d have been in better financial shape from cash-renting your ground, you think about why you’d want to lose equity at that stage of your career,” Stock continues. “Why not sell the machinery, rent the farm ground, and be available to help somebody else run a planter or a sprayer?

“Everybody calls up these guys after their sale and says, ‘Hey, can I use you for a couple days a week?’ And that’s what they do.”

How Did This Happen? 

Part of the issue is how COVID lockdown supply chain interruptions clogged the normal trickle-down of used equipment. 

“Every year, you should have so many 1-year-old machines come into the market, so many 3-year-old machines, so many 7-year-old machines, all the way down the line,” Seymour says. “But right now we don’t have that, and there’s not enough buyers out there because commodity prices aren’t good and inflation is through the roof.”

Campbell says we’re still seeing the pandemic supply chain’s “bullwhip effect” causing more dramatic fluctuations in the equipment market. 

“Once that gets streamlined we’ll be at a more steady state, more like 2017 through early 2020,” he says. “There won’t be massive fluctuations in equipment values, and there will be more predictable depreciation schedules.”

Manufacturers are slowing new production, based on lower dealership orders. Seymour shares a conversation with a dealership that normally sells 60 to 100 combines a year but did not have a single order on the books when orders opened in 2024. 

“Usually, by the time orders open, you have 75% of what you’re going to do for the year on contract,” he says. 

Campbell says export markets are another unpredictable factor. The exit of equipment is important to keeping the flow steady in the United States. 

“Right now Ukraine is not an export market, and China is slowing down their importing of machinery,” he says. “If there was an end to the Ukraine war, and they needed to replenish their agricultural equipment, that would also shock the system.”

Next Steps in Technology 

The availability of upgrade kits and retrofit options also affects the frequency of equipment trading. Now, you don’t always have to buy a new machine to get the latest technology. 

“We’re about three to five years away from a day when a machine’s worth is completely based on how upgradable it is,” Seymour says. He also believes the next big game changer will be when older equipment can be upgraded with autonomy. 

“It won’t happen immediately,” he says. “But the first time a farmer goes into the coffee shop and his neighbor says, ‘Hey, that autonomous grain cart I used during harvest saved me enough time, money, and labor that it paid for itself in a season!’ his ears will perk up, and he might change the way he thinks about what he’s doing.”

Seymour likens autonomous technology adoption to when auto guidance first came out, in the early 2000s. 

“It was laughed at, it was a toy, and unnecessary,” he says. “But today you’d be hard pressed to find somebody who doesn’t use it, and a lot of guys won’t even operate if their A-B lines are messed up.”

Look for the Bright Side

Seymour notes that one positive is interest waiver deals, especially at dealerships. 

“This could be a saving grace, because you could buy a combine at auction for $380,000, but you can also get a $475,000 or $500,000 combine from a dealer at 1.9% interest for six years,” he points out. “I’m not saying you’ll save $200,000 in interest, but you might be able to afford more machine, and you’ll have a partner in your dealership if something blows up.”

While it’s been a tough year, Stock says November and December likely will remain the best time to take action on machinery.

“Farmers will still see their tax man and have to make a decision to pay this much tax, or spend some money,” he says. “Some pay the tax; others spend.” Spring 2025 also is filling up with farmers looking to schedule sales. 

With the abundance and familiarity of online auctions, people are used to buying and selling equipment anytime, anywhere. 

“The average piece of machinery sold on BigIron travels more than 300 miles,” Stock says. 

Campbell cautions farmers not to overreact and go into a shell, where they don’t buy anything or talk to anyone, because that can lead to missed opportunities to improve operations. 

“I see dealerships becoming more efficient, more effective with their communications, and shifting from not only being a supplier but a partner to farmers,” he says. “I’m seeing farmers work more openly with their seed salesmen, their local dealers, their bankers, all of their partners to say, ‘Here’s where we want to go, how can we work together to right-size our operation.’

“Be prudent in your purchases, but be open,” Campbell sums up. “In challenging times, we always improve.”