As volatility in the equipment market continues, it’s important for financial lenders to understand how external stressors influence the market in order to better evaluate risk and uncover opportunities for buyers.

Recently, Nicole Cleggs-Burn, Farm Loan Chief from Alabama FSA, and Graham Smith, Chief Appraisal Officer from AgCarolina Farm Credit, joined Tractor Zoom Director of Insights Andy Campbell in our quarterly used equipment market update webinar. 

Below are their trends across the ag lending economy from Q3 and projections for 2024.

In addition to seeking a holistic view of the market, Graham Smith prioritizes research into regional trends. Reaching out to local equipment dealers and auctioneers as well as visiting with Farm Credit members, helps him stay focused on market activity that directly affects his borrowers.

The ag equipment market has experienced great change since 2020. Both Smith and Cleggs-Burn reflect on how farmers made their buying decisions and what factors are influencing them today.

While supply issues plagued the industry, many buyers secured equipment that was available. Now, supply has returned and farm income has been high, but many other stressors influence buying decisions. They include rising land values, high interest rates, high input costs, and rising cost of living for families. Cleggs-Burn says the uncertainty has prompted farmers to buy used equipment and the FSA is seeing lower numbers of farm operating loans compared to the previous five years. Keeping a pulse on these stressors and any new that affect buying decisions will be crucial for 2024.

Data and analysis tools are more available today to help make results-driven decisions. Smith says any opportunity to evaluate and add data to their database helps him educate his borrowers about the options that are right for them. Partnering with Tractor Zoom helps him gauge the national equipment market trends and focus on regional analyses that support their end user.

While Cleggs-Burn has seen lower operating loan requests now than in the several years, she expects to see more producers to work with the FSA in order to offset some of their loans with commercial lenders, especially as interest rates increase.

Graham maintains that closely monitoring the trends in the market and keeping up with real-time data will help achieve accurate real estate and equipment valuations as new requests are processed.

Tractor Zoom Pro Market Trends is one way ag lenders can monitor changing values and supply of farm equipment. Doing so helps them gauge where the market is headed and supports their process for managing risk and re-evaluating clients’ balance sheets.