What’s on the Horizon for Machinery in 2024

Do you ever wish you could hit a “do over” button to go back in time and choose a different career? I’m guessing for our farmer readers, the answer is the same as mine: Nope.

I’ve enjoyed building Machinery Pete over the past 34 years, but if I had to go back, I’d be a meteorologist. Be right just over half the time, and you’re a superstar.

Predicting what’s going to happen is tough. Just ask your favorite commodity broker or financial analyst.

Things rarely go as the experts expect and the best any of us can do is make informed decisions based on what’s hopefully the best data. 

With that said, I’ll gaze into my crystal ball and make my predictions for 2024.

1. Used Tractor Values Will Finally Soften. 
Mid-to-high horsepower used tractor prices have been on fire since late 2020. They rose throughout 2021 and haven’t stopped, but supply of those used mid-to-high horsepower tractors began to rise and catch up with demand late this summer and into early fall.

High values are likely to slide once the calendar flips to 2024.

2. Equipment Manufacturers Claw to Retain Pricing Power. 
Do you think equipment manufacturers will want to cede the historic level of pricing power they’ve had the past couple years? Nope, neither do I.

Very tightly controlling production of new iron to match and not exceed demand will have to be key. 

3. Used Combine Values Continue to Adjust Downward. 
Supply of used harvesters began to rise very late in 2022 and continued into 2023. Auction pricing in this category slipped and is likely to slide lower in 2024.

4. Used Values Won’t Fall as Much as You Might Think. 
The ag industry has seen and experienced the up and down cycles, but what’s happened before doesn’t automatically happen again. Used equipment values fell 20% to 25% in 2014 and another 15% to 20% in 2015.

The difference now is there are far fewer farm equipment dealers. They are much larger and more proactive in paring down their used inventory to match the market. For example, July and August 2023 saw a huge spike in the number of used combines sold at auction. Values dropped, but the volume sold put a dent in the rising supply issue. It’s easier for larger dealers to act more nimbly to match the market.

5. The Auction Industry Will Continue to Consolidate. 
The average age of auctioneers across North America mirrors the average age of U.S. farmers. It was big news last year when BigIron acquired Sullivan Auctioneers — the first ripple. In October 2023, Steffes Group announced a merger with Heartland Auction of Kansas. Then, Purple Wave online auction announced a major investment from Copart, a global leader in the online auction space.

Look for this trend to continue, but at the same time, watch for new online-only auction firms to sprout up.