Supply shouldn’t be as much of a problem, dealers say
Although custom harvesters may not find many good deals on new equipment this year, there may be a little more of it available, say several ag equipment dealers.
“The last few years, finding equipment has been tough,” says Ann Holloway, sales representative with Magnum Equipment, Stockton, CA. “We're not going to have that problem this year. We're going to be able to get pretty much what we want from our vendors or from other dealers.
“I don't know that it will translate to better deals; but the availability is there. So if we can make the price right and they're in the market, they're going to buy,” she says.
Supply was especially tight even six months ago, says Ron Ritchie of Ritchie Implement, Cobb, WI. And it still is with some equipment from smaller manufacturers or with some brand-specific items. But he sees a turnaround.
“I can see the pipeline starting to fill up again. I think our inventories are going to get replenished by the end of the year,” Ritchie says.
Equipment availability has been “right on the edge,” says Tom Shafer, director of sales and marketing for Arnold's Equipment, which operates five dealerships in central Minnesota. “But we expect that is probably going to open up a little bit more.”
At the same time, Shafer expects manufacturers will closely watch their production, especially with the current economic climate.
Doug Eck, Omaha, NE, sales representative with Nebraska Machinery, which maintains eight dealerships in the state, is still trying to get equipment. He also says sales were down in the first quarter.
“But we still have several units on order that are coming in, and we have several active deals we're working on. It's (sales) not like it was a year ago, but still better than I anticipated. There are some tax advantages toward the purchase of machinery that go until the end of 2009; I think that's what's driving some sales yet today,” Eck says.
“There are people out there buying,” says Holloway. “They're just not as eager to jump on the bandwagon; they're a lot more cautious.
“It's definitely going to be a softer market,” she adds. “A couple of weeks ago, a guy said he was going to buy a tractor from me. Then he called and said, ‘Let's wait. I'm still going to buy, but I just need to wait for a month or two because our dairy prices are just in the tank.’ ”
Shafer agrees: “We've seen, with the uncertainty, that people are waiting a bit longer to make some of their buying decisions.”
But larger custom harvesters are more likely to be buying machinery than individual growers, Ritchie says. “The big guys are on a rotation,” he says, “and are charging the same prices.” The market will be softer with individual growers or dairymen who aren't getting the income they did last year, he predicts.
Sales have been steady for Hawke & Co., Alton, IA, says Dustin Dravland, a sales representative. “We've been moving machines and haven't seen a slowdown here.”
Yet the market is unpredictable, he says. “You stop at one place and they say they can't afford to buy anything; you stop at the next place and they're looking for equipment.”
Anyone in the market for used equipment may find a good selection, he adds.
“In the last three or four years industry-wide, I think a lot of guys did a lot of updating. There's a lot of used equipment three, four or five years old vs., in years past, equipment that was quite a bit older.”
Ritchie is cautiously optimistic about the used-equipment market. “I think there will be some good financing and some opportunities to buy used equipment.”