At a Monrovia, Ind., farm equipment auction last week, Brock E.W. Turner, WFIU Public Radio/WTIU Public Television mingled with the crowd to find out why farm equipment prices are up this year. 2021 farm income — corn is up 75% since March, inflation, supply chains and U.S. tax codes were the most common reason he was given.
“Farmers have disposable income, so they have money to spend it on and the tax laws really, really favor purchasing equipment,” Gary Schnitkey, a professor of farm management at the University of Illinois said. “Manufacturers are having difficulty keeping up with the demand.”
Schnitkey says the price of new equipment rarely decreases. An analysis he compiled in October revealed the costs of planters had increased nearly 17%. The price of tractors, combines and plows had also increased.
“Part of that is supply problems with the same the chip manufacturing [and] chip shortages that we saw,” Schnitkey said. “There's those issues and then there's just labor issues, which is impacting everybody.
Meanwhile, Dylan McClure from Stone's Farm Service in Greensburg, Ind., told Turner that many tractors on his lot are already sold, but waiting for parts. That includes a Kubota 150 horsepower model waiting for a set of dual tires.
“It’s not Kubota’s fault, but you know you can select when you’d like it delivered and a lot of those models are coming up June 2023, February 2023,” McClure said.
“Right now, we don’t have anything. We’re out,” said Kurt Everett, Ted Everett Farm Equipment, Monrovia, and one of Indiana’s largest farm auctions. “In 60 more days, we’ve got to have that lot full again” pointing to a nearly empty lot.
“It’s wild. It’s crazy,” he told Turner. “We’re way out here on the limb, just waiting for that thing to break off, and I just hope I don’t have a bunch of inventory when it does break.”
Everett knows everyone at last week’s auctions are overpaying for equipment, but has no plans to stop.
“Absolutely, yeah, and I’m overpaying for stuff,” he admitted. “Everything is way out of touch. Will it come back; I don’t know? I’d kind of like for it to go back to the way it was, but who knows?”
In the meantime, Everett says he’ll continue scouring regional dealerships to put auctions together, a task that’s becoming increasingly difficult.
