With commodity prices down, sales of used farm equipment are drying up as farmers guard their checkbooks, says DTN. The loss of “bonus” depreciation, which allowed a faster write-off of equipment purchases, also deters sales. Inventories of used tractors and combines, two of the most expensive machines used by farmers, are large and prices are down slightly, according to analysts cited by DTN. But revenue from sales of parts and service is up, says the head of the Iowa-Nebraska Equipment Dealers Association, so “it’s not all dead.”
“But it’s not business as usual,” says DTN. Dealers may be offer fewer discounts on trade-ins because of the uncertainty of selling the equipment, and leases on equipment may become more costly since it will carry a lower value at the end of the contract.