Demand for pre-def tractors is “still strong,” according to Machinery Pete - Greg Peterson, and there are some in the market that think farmers should maybe consider the potential to score attractive sales promos later in the season.
“Pre-def” is a term used to refer to tractor models that do not have government mandated selective catalytic reduction (SCR) systems that require Diesel Exhaust Fluid (DEF). Models containing these systems are often more complex to repair and troubleshoot.
“The demand is still strong, but I would say that maybe the edge is a little bit off (that market),” Peterson tells AgriTalk Radio fill-in host Michelle Rook during his weekly appearance on Monday. “Pre-def tractors – the very, very nicest ones – are still attracting tons of buying interest.”
Speaking of interest, high interest rates combined with low commodity prices are among the factors that may entice equipment dealers to roll out some aggressive special offers later this summer.
Also consider that brand new equipment remains expensive and will stay that way for the foreseeable future, and farm equipment sales are cooling down as farmers focus on planting, spreading, and spraying with what they have on the farm. And then seemingly before anyone can blink – BOOM – the summer’s over and the time crunch of harvest season is here. For some, the local dealer lot is the furthest thing from mind during that all-out-sprint.
With some dealer lots reportedly stocked full of shiny like-new and new iron that has just been, well, sitting around most of the summer and into the fall, there is a sense that dealers could try to reprime the market by incentivizng buyers.
“Some of these larger (dealer) groups, they’ve quickly pivoted,” Peterson says. “They’ll still sell you the new stuff, but I mean, their head is on moving used. That’s clear.
“They know that one of the levers they have available is maybe some attractive financing offers, whether that’s on a used combine, used tractor, high or small horse,” he adds. “So, I think we’re seeing more of that now and I think we’re going to see a lot more of that for the rest of 2024. And then beyond that, you know, as ‘24 plays out and dollars are tighter on the ag side, we’ll get this recalibration of used values and auction prices.”
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VIDEO UPDATE FROM MACHINERY PETE:
