By Tanner Hood

Tractors, combines, cotton pickers and a host of brightly colored farm equipment fill dealership lots across the state, catching the eyes of Alabama farmers. It’s a bittersweet sight amid climbing input costs and plunging commodity prices.

Initially following the COVID-19 pandemic, equipment inventories were low while markets boomed, said Thomas Peek. He’s the operations manager at Peek Equipment in Limestone County. 

The reverse is now true. 

“There was a time not that long ago when a farmer could order a new piece of equipment before harvest that wouldn’t be ready until after the following year’s harvest,” Peek said. “Farmers couldn’t get new equipment quick enough when the markets were good. Today, lots are overflowing, and commodity markets are suffering. Farmers can’t afford the new machinery.”

Peek’s assessment is supported by reports from Sandhills Global, a market research firm focused on used equipment. 

In its research, Sandhills found inventories of combines and 100-plus horsepower (HP) tractors increased year-over-year. The gains are due to an influx of newer and more expensive equipment being introduced to the market. 

The report released in May showed inventories of used tractors with 100 HP and greater are 58.3% higher than the same period last year, with a 2.54% month-over-month increase. Almost 55% of those tractors were made within the last five years. Used combine inventories also rose 17.63% year-over-year.

“There’s a lot of new inventory, and dealers are putting a lot of money into used equipment to get farmers to trade up,” Peek said. “When trade-in equipment hits lots, it’s overpriced in the current commodity markets. The used equipment becomes stagnant.” 

For Barbour County Farmers Federation board member Justin Cooper, updated equipment is essential to productivity. 

“When we get started at 5 a.m., we want to get something done by the time we come in for the night,” said Cooper, who serves on the Alabama Farmers Federation State Wheat & Feed Grain Committee. “If we see a piece of equipment that’s giving us more problems than it should, we really consider upgrading to something more productive.” 

The third-generation farmer raises peanuts, cotton, corn and cattle with his father. Ensuring equipment is running properly — especially planters, harvesters and sprayers — is essential for productivity.

“With low commodity prices and increasing input costs, farmers can’t afford the new equipment,” Cooper said. “They’re patching what they’re using now and are finding ways to keep older equipment going. It’s cheaper than making payments on new items.” 

Cooper has taken advantage of American Farm Bureau Federation’s (AFBF) right-to-repair memorandum of understanding (MOU) with John Deere. He recently bought two laptops and John Deere software to help his mechanics manage most repairs in-house.

“It’s been a saving grace,” Cooper said regarding the software. AFBF also has MOUs with AGCO, CLAAS of America, CNH Industrial (which includes Case IH and New Holland) and Kubota. 

With net farm income expected to decrease for a second year following record highs in 2022, many farmers are relying on older machinery. In Peek’s eyes, operating and repairing older items could help farmers in the long run.

“I think the farmers are in the driver’s seat,” Peek said. “If farmers keep buying and operating older equipment, it will force the price to drop on newer items. If commodity markets can rebound, farmers might have the ability to buy newer items at a lower cost.”