“Sales usually back off this time of year, but the phone is ringing every day,” said Don Routhier, owner of D&A Tractor Sales in Alexandria. His used farm equipment has been selling so fast he can’t keep up with the high demand.
The shortage of used equipment is being caused by the shortage of new equipment, says Routhier. When customers aren’t buying new stuff, they’re not trading in their used stuff, he said.
A shortage of parts like microchips and tires, disrupted global supply chains, backed up ports, a labour shortage, and high demand from farmers who made higher profits this year are all factors affecting the delays in acquiring farm equipment.
“We’re having a hard time finding stuff and buying it to be able to turn it over and make a little bit of money on it,” Routheir said. “We handle a wide variety of stuff and our yard is emptied out right now. Everything is selling well.”
He added that “prices have gone up but not that much since before COVID. It’s just that supply is low and demand is high. At some of these bigger companies, the dealers don’t expect any new equipment to come in for a year and a half or two years.”
Walker Eady, sales representative at Reis Equipment Centre in Renfrew, confirms they’re having the same issue. “Our new equipment is backed out so far that it’s caused a demand for used equipment, which has been a hot item for the last year and a half.”
New equipment has “skyrocketed” in value in the last five to six years because of the dollar exchange rate, an ongoing problem since 2014, and new clean emission engine technology, which has drastically increased manufacturing costs, says Eady. Since the new equipment has increased in value, so has the used equipment, he says.
Eady says there’s been about a 60 per cent decrease in new tractor sales over the last decade and the price has doubled in the last five to six years.
“There’s a huge demand for used tractors, even big horse-power tractors, and we have next to none. I don’t even think our competition has them,” Eady said. Reis Equipment isn’t selling used equipment for record high prices, but prices are competitive, he stated.
“Our best sellers would be from 25 to 100 horsepower tractors, that’s our sweet spot for tractors,” says Eady.
Another supplier said that supplies are so low that he can sell a new combine but not with tires.
Chris Matthews, sales manager at Elliott Farm Equipment Ltd. in Carleton Place, says they’re also not getting used equipment, but says people are selling equipment independently on social media sites or used tractor forums and not trading it in for new equipment.
“There’s been a high demand for new equipment over the last three years,” Matthews said. “We’ve been completely sold out, no matter what, doesn’t matter how much more we order. About a year before COVID, we saw a big spike in compact sales and COVID rocketed that. I think that wave will continue for at least another year.”
Matthews says they haven’t raised their price margin over the last decade. The only things that affected pricing were the exchange rate, the cost of shipping, and the cost of labour.