Excess Inventory and Falling Prices Plague Agricultural Equipment Market

The article discusses how falling crop prices and high interest rates are causing agricultural equipment sellers to grapple with excess unsold equipment, resulting in discounted prices, suspended new orders, and auctions at lower prices. Farmers are hesitant to purchase new machinery due to lower crop prices and financial constraints. This is affecting manufacturers such as Deere and CNH Industrial who are expecting lower sales to impact their profit margins. Dealers are struggling to balance supply and demand, with some halting new orders and offering lower financing rates to sell inventory. Used machinery inventory is increasing, leading to auctions at reduced prices. The issue is particularly severe in the Midwest grain belt where inventory levels are high, resulting in financial strain for dealers. Farmers are also feeling the pinch, with some forgoing equipment purchases altogether. Manufacturers such as Deere have warned shareholders of the impact of inflation on farmer finances, making equipment purchases less appealing. Texas-based farmer, Scott Born, is among those who cannot afford new or used equipment for the remainder of the year. Overall, the situation is a significant departure from the boom period of 2022 when farm income hit record highs and pandemic assistance payments enabled farmers to upgrade their fleets.