Ag equipment buyers were willing to take almost anything they could get their hands on when the COVID-19 pandemic severely hampered manufacturers’ ability to deliver new machines to customers. That, combined with strong farm commodity prices adding to demand, raised the price of used equipment.
Now that manufacturing has returned to normal and commodity prices have fallen, the demand for used equipment pulled back.
“The new manufacturers are catching up and supplying the void,” says Jordan Clarke, senior vice-president and head of Canadian sales at Ritchie Bros. Auctioneers.
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“We’re finding dealerships are putting more into the market on the used side, and we’re being contacted by more dealerships to sell and help with volume. The supply has caught up on everything.
“There’s definitely been a correction in the marketplace, for sure. If you had to generalize things out, I’d say we’re down maybe 20 per cent in overall pricing. Certain categories are more and others less.”
Combines are one of the hardest hit equipment types. Buyers are being more selective so older machines and those in less than pristine condition are showing the biggest reduction in sale prices.
“Combines, air drills and headers,” says Clarke. “There’s now a massive separation for new, late model and desirable versus the opposite, whereas over the last five years, everything was riding strong. But there are changes and separations now in the marketplace.”
When it comes to air drills, capacity used to be a prime driver of demand and pricing. That trend has changed too. Buyers are now more likely to raise their hands for something newer, with more digital technology, even if it has a narrower working width.
“With air drills, there are some one-, two- and three-year air drills that are selling as well if not better than they did last year,” says Clarke. “But the 10,15, 20 (year old), the bottom has fallen out of that age group.”
Tractors, on the other hand, are one of the stronger segments in the market.
“Tractors are still popular. Saying that, there has been a drop, even in tractors. They’re probably the most consistent; I’d say a drop of five per cent across the board.”
The number of ag machines offered for sale has increased, adding to downward pressure on pricing.
However, the number of buyers participating in Ritchie Bros. sales has not decreased, according to Clarke. Participation remains high, but buyers are less aggressive.
“People are still buying stuff. We had some crazy prices on stuff where the right two people said, ‘yeah, that’s exactly what I want,’ and they go after it. But it just wasn’t as consistent as we’ve seen in the past few years.
“I think really, when times tighten up a bit, people are much more selective. That’s the term I would use. Bidding has been selective versus the past three or four years.”
