The agricultural industry relies on good quality equipment. But even the most dependable machinery reaches a point where it's time for an upgrade. For farmers and dealers who are looking to sell used equipment or utilize it, this can be a hard task. In this article, we will have a brief look at the challenges of selling used farm equipment, and exploring potential markets to maximize return on investment. Also, we will show you how Atlantic Project Cargo can help farmers and dealers. 

Main Challenges For Dealers and Farmers When Selling Farm Equipment

The agricultural equipment market faces a unique set of challenges when it comes to buying and selling. This brief overview will explore the main difficulties dealers and farmers encounter when navigating the used farm equipment market.

Chinese Competition

Selling of used farm equipment presents a significant challenge for dealerships and farmers. Traditionally, export markets have provided an outlet for this equipment. However, the stream of inexpensive new equipment from China has flooded these markets, diminishing demand for high-quality used machinery. This happened because of these two key factors: 

1. Cost-competitiveness

Chinese manufacturers can produce equipment and spare parts at significantly lower prices compared to established brands from Europe and North America.

2. Increased Production

China's production of agricultural machinery has surged in recent years. China's 2019 agricultural machinery production saw mixed results. 

Among the main concerns about Chinese equipment and spare parts are: durability concerns, quality of materials, and simpler designs.

Moreover, it is necessary to mention the reliability issues that might appear: maintenance needs and parts availability. 

China's dominance in affordable farm equipment presents a complex situation for farmers worldwide. 

Inflation

Global inflation was projected to be at 6.8% in 2023 according to World Economic Outlook, July 2023. In 2024 global inflation is forecasted to be approximately 5% (KPMG Global Economic Outlook, December 2023). Anyway, it squeezes farm budgets, leading to a cautious approach to equipment purchases, both new and used. Farmers are forced to prioritize essential needs, potentially delaying or downsizing used equipment acquisitions.

According to a 2022 research paper by Will Snell – the same inflationary forces that inflate commodity prices also drive up the cost of farm inputs, such as fertilizer, fuel, and equipment. Additionally, the cost of borrowing money (interest rates) typically rises alongside inflation, further squeezing profit margins for farmers.

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Global Supply Chain Disruptions

The global supply chain disruptions that emerged during the COVID-19 pandemic continue to cast a long shadow, impacting numerous industries, and the agricultural equipment sector is no exception. 

A significant challenge for sellers is the lack of available equipment. According to recent information, farm equipment dealers reported facing inventory shortages. This shortage stems from disruptions at various points in the supply chain:

  • Raw material shortage
  • Manufacturing slowdowns
  • Logistics bottlenecks

With limited supply and strong demand driven by rising commodity prices, farm equipment prices have increased. This increase puts additional pressure on farmers' already strained budgets.

The combined effect of limited inventory and inflated prices has pushed some farmers in the EU to the breaking point in 2023-2024. Protests have erupted in several European countries, highlighting the desperation of farmers about EU policies, insufficient support, and lack of loans and financial investments. Additionally, European farmers have concerns about subsidies such as ending diesel subsidies, which can threaten their income. Another concern is an unequal distribution of subsidies, and many argue that large farms benefit more from the current EU subsidy policies. 

The disruptions extended beyond traditional channels. The crisis in the Suez Canal in 2023, often referred to as the Red Sea Crisis, further exacerbated existing problems. The backlog of ships waiting to transit the canal or using alternative routes caused delays in the movement of farm equipment and essential equipment parts, further damaging the already fragile supply chain.

Location

A primary challenge associated with the location is the limited reach of traditional local marketing strategies. It can be hard to find buyers in specific areas, particularly for specialized equipment. This restricted pool of buyers can lead to a lower selling price or a prolonged selling process.

The location also factors into the logistical and financial considerations of selling used farm equipment. The distance between seller and buyer can significantly impact transportation costs, which can be a major deterrent for long-distance purchases.   Sellers may need to factor in these costs when determining their asking price or consider offering buyer-side assistance with transportation arrangements.

At Atlantic Project Cargo, we understand the complexities of shipping oversized and specialized cargo like farm equipment. No matter where your equipment needs to go, we can help it get there within your budget, safely, and efficiently.

How Atlantic Project Cargo Can Help? 

Atlantic Project Cargo assists dealers not only with the selling process of used agricultural equipment but all kinds of equipment – industrial, construction, and so on. Additionally, we can assist with:

  • Sanctions Navigation

We help to navigate the complex and ever-changing landscape to ensure that your shipments are compliant;

  • Finding Cheaper Freight

We have a wide network of contacts and can negotiate the best possible rates for your shipments;

  • Finding Alternative Markets For Used Equipment

We have a deep understanding of the global market for used equipment and can help you find buyers for your machinery in new markets;

  • Obtaining Import and Export Permits

We can help you obtain the necessary permits for your shipments, regardless of the origin or destination;

  • Providing Customs Brokerage Services

We can assist with all aspects of customs clearance for your shipments.

In addition to these services, Atlantic Project Cargo also offers a variety of other services to dealers of used equipment, including:

  • Equipment Inspection and Certification

We can inspect and certify used equipment to ensure that it meets the buyer’s specifications;

  • Packing and Shipping

We can pack and ship used equipment to anywhere in the world;

  • Insurance

We can provide insurance coverage for used equipment shipments. 

Contact us today to learn more about how we can help you grow your business. 

Exploring Potential Markets for Used Farm Equipment

Used farm equipment dealers can use several strategies to identify and reach new customer segments. 

  • Start with market research that will include analysis of market trends, government and industry reports, and competitor analysis. 
  • Secondly, you can work on your online presence and targeted marketing. 
  • Thirdly, think about your network and building relationships. 
  • Last but not least, stay informed and adapt to emerging technologies, financing options, and data-driven decisions. 

By following these small tips, dealers can effectively explore potential markets, connect with a wider customer base, and increase their sales. 

Conclusion 

The used farm equipment market, while presenting significant challenges, also offers exciting opportunities for dealers who can adapt and innovate. While Atlantic Project Cargo might not be able to directly address the issues of global competition, inflation, or supply chain disruptions, we can be a valuable partner in facilitating the shipping of farm equipment to new and distant markets.

Visit our blog for more articles related to farm equipment shipping, maritime, and industry-related insights.