Farming Video | Why Used Farm Equipment Is Surprisingly Tight in 2026

00:00:00 Used farm machinery. It's a bit of a barometer on the overall ag economy. So I'm talking to my friend Casey Seymour here 00:00:06 with the Moving Iron Podcast about what the marketplace looks like. What are we seeing in the used machinery marketplace 00:00:13 and what does it mean about ag, where we're now and where we're going. Casey, what's the deal? 00:00:18 You told me we're at record low inventory. I would've thought the opposite 2026. February, 2026 we're in year three of an ag downturn. 00:00:25 I'm thinking to myself, there's probably a glut of old machinery out there because people are getting out of the business. 00:00:30 You saying not the case? Well, There was a glut and this last couple of years a lot of auction activity, those kind of things are seeing a lot 00:00:36 of auction activity now with folks going through retirement sales and those kind of things. But the biggest leading indicator of what's gonna happen 00:00:42 with farm equipment is always the, the new equipment that gets sold, uh, for the coming year. Right. So in 2024 order adding period for 25 delivery, 00:00:50 it was off by 65%. Right? Meaning there was not new machines being contracted to be delivered in 2025. 00:00:56 Right. So that as everybody saw beginning of a, a crinkle. Right. 24, 25. 00:01:00 Okay. So now there's not that much new stuff on the, our one and 2-year-old equipment on the market right now, which is not feeding down to that three to 5-year-old stuff, 00:01:07 which was a big glut at the time coming out of 23, right out of COVID. Right. That stuff's being sold through pretty fast right now 00:01:13 because of the price pul staying. So as you look where the market is right now, there's about probably a third of the 1-year-old machines on the market 00:01:21 right now that there were at any other given time in history. Right. We have probably about 2,500 used 00:01:26 combines that come to the market every year. Right now we've got less than 900, 1 2500 Used combines come to the market every year 00:01:33 and we've got less than a third of that. Right? Okay. By no means am I saying there's gonna be some explosion in price. 00:01:39 I'm not saying that at all. What I'm saying is I think this is the first time in my career we're gonna have a right 00:01:44 sized inventory for the economy and as we start to heat up, there'll be enough there to keep people in in, in a good position 00:01:50 with their machine. What I Got the question I gotta ask though is those are a lot of like 2-year-old machines. 00:01:55 What happens to the stuff that's 10 years old? Because there's still plenty of usability in a 10-year-old machine. 00:02:01 Yep. 'cause it seems to me we put less hours on, especially tractors, right? So is that marketplace holding up? 00:02:06 Yeah, it's doing great. I mean, you're, you're seeing the amount of machines that are coming off that, that 10-year-old space, you know, eight 00:02:12 to 12-year-old machine is probably the average age of an auction piece of equipment in that range. And older obviously, but about eight to 12 years old, 00:02:19 you see a lot of stuff get in the auction bucket space. Again, we're seeing a lot of that stuff roll through. I think this is gonna be a great time if you are a, uh, 00:02:25 a seller of equipment. If you have something that's five to 10 years old, you're, you're, you're gonna get the 00:02:30 most bang for your buck right now. Okay. So then if I'm a farmer and I've got another five 00:02:34 to 10 year horizon, I'm gonna be in business. Maybe I should be buying new. 'cause it seems to me the new equipment is probably gonna 00:02:40 get, um, maybe a little cheaper because they're looking at this depressed farm economy and saying, we gotta sell stuff. 00:02:45 So should I be buying new? I think it depends on your situation. Obviously if what it looks like, 00:02:51 maximize your discounts wherever you can maximize the amount if you're gonna go down the news 00:02:53 path and take a look at that. But I would say if I'm, if I'm a buyer right now, I'm looking at a one to 2-year-old piece 00:02:58 of equipment before I'm looking at nothing Really, even though the, even though the prices are up because the inventory's tight. 00:03:03 Right. Alright, last thought. What else do I need to know? Barometer of eco of, uh, 00:03:07 the farm economy based on equipment. You've been doing this your whole career, right? What else do I need to know? What 00:03:12 did I not ask you that I need to know? Watch Auctions, right? Auctions leading indicator. 00:03:15 What's going on in the marketplace right now? And I have a ratio that I track where when retail values, like you go out to tractor house machine, repeat, 00:03:22 or someplace like that, and you're looking at values, when those values are more than 120% of auction value, you're gonna see auction values start to collapse. 00:03:30 Right. When they come down, those auction values start to come up. And right now we're coming closer to that 120%. 00:03:36 So auction values are creeping back up. We're starting to see a lot more stable marketplace than we've seen probably in the last five years. 00:03:41 And this moves a lot quicker than real estate because it, it's just this, uh, more, uh, less long term asset. 00:03:48 Right? Yep. I always joke that in the ag economy, we get to see all the bad stuff coming at us for, for 12 months 00:03:54 and all the good stuff's coming at us for 12 months. 'cause it's, that takes about a year's cycle to get everybody, you know, get the crop in, 00:04:00 get the crop out, get your money, and then start looking at what you're gonna do. And, and right now we're seeing, we're seeing, 00:04:05 Does what you're seeing in ag machinery make you optimistic or pessimistic about the next year or two in agriculture? 00:04:11 I, I think we're at a, a leveling off point right now. We're not, we're not gonna, it's not gonna get worse. It's not gonna get really any better, 00:04:17 but it's just gonna be a leveling off point. We're In the perfect Goldilocks sorta of kind of, kind of sorta of. 00:04:21 Yeah. He's k Seymour with the Moving Iron Podcast coming at you from the floor of Commodity Classic with extreme Ag. 00:04:26 I'm Damien Mason talking about used farm machinery, new farm machinery and what it means for the farm economy in general. 00:04:31 Thanks for tuning in. Are those numbers 00:04:33.265 --> 00:04:33.765