Prices for used farm machinery have been trending lower in the past year due to a surplus of inventory at dealerships, but buying used may not always be the best option, a Purdue University expert says.
Robert Stwalley, assistant professor of agricultural and biological engineering, urges farmers who are thinking of buying used planters, tractors, trucks or other machinery to be cautious.
“A used piece of equipment, under the right circumstances, may be the best economic choice for a specific operation,” Stwalley said. “But it may not be. Remember, go in with your eyes open and choose wisely.”
Mike Gunderson, an associate professor of agricultural economics, said higher crop prices over the past five years allowed many farmers to purchase new farm machinery during that time. Consequently, those farmers will probably not need to buy any new equipment in the foreseeable future, Gunderson said. Retailers selling new farm machinery can curtail inventory to adjust to lower market demand, but any new equipment sale involving a trade brings in another used piece of equipment to add to the inventory, causing a surplus.
Stwalley said there are several things to keep in mind when thinking about buying used equipment.
Farm machinery operates at maximum efficiency only for a certain amount of time, Stwalley said. According to the American Society of Agricultural and Biological Engineers, planters have a relatively short effective lifespan - 1,000 operational hours - while tractors, farm trucks and wagons can last up to 5,000 hours. All other machinery should last about 2,000 hours. Stwalley says potential buyers should determine how many useful hours a piece of equipment has left.
Stwalley points out that used machinery is only a bargain if its benefits outweigh the costs of keeping it. In addition to the purchase price, buyers have to think about repairs, maintenance, storage and other expenses. Those costs continue whether or not the machine is used frequently.
Time is an often overlooked cost associated with buying used machinery, Stwalley said. Searching for a specific vehicle or piece of equipment has become easier in recent years with dealers and owners listing their equipment online. But he said a farm manager must still visit multiple sellers to find the best available deal. Buying a new piece of equipment is not as time-consuming since most equipment dealers carry similar models, Stwalley said.