Equipment landscape remains in flux

S WINTER is fully entrenched in our everyday lives, some of us are itching to get back onto the tractor seat. Of course, if you’re like me and own livestock, then it seems you never miss a day on the tractor all year round. The cold days and slower pace of winter usually offer us time to look back over the previous year and figure out what we can do better in our operations. This includes evaluating ways to improve the efficiency of our equipment line. In this column, I want to discuss some of the trends that I see coming in 2023.

The good news is that most of the major commodity prices are predicted to remain strong for the year. This also goes for the milk and beef industries. I believe the latter is in for several years of good pricing in all phases due to low cow numbers around the country.

These exciting times with great prices, super genetics, and efficient equipment can make us as profitable as ever if the stars align and Mother Nature cooperates. However, the equipment and finance sectors have had some changes over the last year that have put a damper on a farmer’s chances of operating in the black. The drastic upswing in the cost of equipment has left ranchers scratching their heads and wondering what to do.

A run on used equipment

With all of the electronics and emissions on new iron, some farmers have gone to the auctions, and we have seen some outrageous prices on low-hour, pre-emission tractors. This was also aided by the reduced supply of new equipment being produced, which has caused a reduction of used equipment trades at the dealership. Unfortunately, I do not see this trend changing in the coming year. Good used equipment will still be hard to find and will command a premium price.

However, I do see some light at the end of the tunnel in the new equipment sector from a production standpoint, especially in the 150 horsepower (hp) and undertractor market. More of these tractors are going to start showing up on our lots this year; however, I believe the 50 hp and under market will retract quite a bit with inflation and rising interest rates. Homeowners and hobby farmers will not be spending money on a new tractor unless it is a must-have, and then I believe they will put more money down and finance less.

For the high-hp tractors, it will be more of the same as in 2022. I think that manufacturers have a good handle on production capabilities, and delivery dates will be more reliable than in previous years. Don’t be shocked, though, if you go into your local dealership to order a tractor and they tell you it won’t be delivered for a year. The strong demand for high-hp tractors is still alive.

Tough times in Europe

For harvesting equipment, this sector’s supply will be shorter than others, especially forage harvesters. I don’t see an abundance of production coming to the U.S. from Europe this year. European countries are in the middle of some trying economic times, and the cost of production, electricity, gas, and freight have all skyrocketed. Some manufacturers have seen a 10% to 15% rise in costs from 2022 to the 2023 model years. Although customers are hoping prices will come back down in a year or so, this may be wishful thinking as prices never seem to retreat; they just stop going up.

We may find companies are willing to offer incentives for certain models in the future, but don’t expect everything to be cheaper. Even if dealers’ inventories begin to rise, the best we can probably hope for is stable prices in 2024.

Finally, the most eye-opening thing last year was the interest rate hikes. There is not much good news here either, as most large bank forecasters are saying there will be a few more rate increases in the first two quarters of this year. They hope things will level off after that. So, it will be a couple of years before I anticipate the $0 down and 0% promotions coming back.

I hope this helps shed some light on the market for this year. Stay warm and stay safe. •

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Feeding Guide

by Mike Hutjens

& HUMAN HEALTH

NORTHERN KENTUCKY

PRE-CONGRESS TOURS

Central Grasslands

Tour ranches, native prairie hay meadows, and other grassland-centered agricultural productions in Texas, and Oklahoma. Additional stops include the Cesar Kleberg Wildlife Center, the National Weather Service Station, and more iconic sites.

Subtropical

International Grassland Congress KENTUCKY,USA 2023

Northwest

MAY 14-19, 2023

Visit one of the most productive agricultural regions in the world with diverse climates, rich soils, and large-scale irrigation systems. See forage productions, dairy operations, and the growing wine industries of Oregon.

Join us in Covington, Kentucky as we welcome delegates to the United States for the XXV International Grassland Congress. This is the first time IGC will be in the US since 1981.

Northeast

Grassland for Soil, Animal and Human Health.

Presentations highlight:

Research on grassland ecology

This tour focuses on operations and venues across Florida, Georgia, South Carolina, and North Carolina. Stops include a behind-the-scenes tour of Desert Farms, multiple agricultural research centers, and the 250-room, French Renaissance chateau Biltmore Estate.

• Forage production and utilization

• Grassland sustainability and ecosystems

Sub-Themes

Explore the most historic area of the United States. The tour begins in Philadelphia, PA, and then moves on to Delaware, Washington D.C., and Virginia. Along with historic sites, the tour will also stop at New Holland and Wye Angus.

• Livestock production systems

• Grassland policies and social issues

The event also hosts pre-congress tours of grasslands throughout the Midwest, Southeast, Northeast, and Pacific Northwest regions of the United States.

Sub-Theme 1: Grassland Ecology

Sub-Theme 2: Grassland Production & Utilization

Sub-Theme 3: Livestock Production Systems

Sub-Theme 4: Grassland Sustainability, Innovations & Initiatives

Sub-Theme 5: Grassland Policies, Social Issues & Policies, Social Issues & Ecosystem Services

For more information and registration scan the QR code with your mobile device or visit INTERNATIONALGRASSLANDS.ORG

For more information and registration scan the QR code with your mobile device or visit

HOSTED BY:

Check out the Hay & Forage Grower website for up-to-date field news, latest industry information, original features, and industry insight at www.hayandforage.com

World Ag Expo

February 14 to 16, Tulare, Calif.

Details: worldagexpo.com

Idaho Hay & Forage Conference

February 16, Twin Falls, Idaho

Details: idahohay.com

Heart of America Grazing Conference

February 20 and 21, Ferdinand, Ind.

Details: indianaforage.wordpress.com

Alfalfa and Stored Forage Conference

February 21, Cave City, Ky.

Details: forages.ca.uky.edu

SW Missouri Spring Forage Conference

February 21, Springfield, Mo.

Details: springforageconference.com

Midwest Forage Symposium

February 21 and 22, Wisconsin Dells, Wis.

Details: midwestforage.org

Novel Endophyte Renovation Workshops

March 21, North Petersburg, Va.

March 23, Mt. Vernon, Mo.

March 28, Tanner, Ala.

Details: grasslandrenewal.org/events/

Central Plains Dairy Expo

March 28 to 30, Sioux Falls, S.D.

Details: centralplainsdairy.com

Tri-State Dairy Nutrition Conference

April 10 to 12, Fort Wayne, Ind.

Details: tristatedairy.org

International Grassland Congress

Hay stocks down; prices remain strong

The USDA’s December 1 hay stocks estimate indicated that inventories are as low as they’ve been since the early 1950s and were down 9% from the previous year. Hay production in the U.S. during 2022 was reported to be down 6.2% from 2021. This news offers no indication that prices will weaken substantially in 2023. In recent weeks, hay sales have tempered in some regions, and export sales have also cooled compared to a few months ago.

The prices below are primarily from USDA hay market reports as of mid-January. Prices are FOB barn/stack unless otherwise noted. •

For weekly updated hay prices, go to “USDA Hay Prices” at hayandforage.com