Farmer Iron

Adversity Could Bring Opportunity

Soft demand in big-truck market may offer buying potential if you need a new big rig.

As the latest Ag Census shows, there are more large farms out there, and those operations are using larger equipment to get the job done. This often includes a semi-truck rig to haul grain to market (we used to say haul it to town but in this age of managing risk and income it could mean hauling to more than one location). The rising use of these machines to move your ever larger crop is an added piece of machinery for your fleet.

Machinery Analyst Harry Kirn, who works at financial firm UBS, notes that at the recent Mid-America Trucking Show the value of used rigs has dropped "precipitously," according to a recent report. He notes that used truck prices are off 20% to 25% on average and some rigs - such as Peterbuilt brand trucks with Cat engines could be down even more (we have no idea why). But softer prices could offer you a chance to leverage your cash on hand to move to a newer rig, or move up to a larger-size truck for hauling your product.

Kirn adds that even the price of new rigs could be falling as much as 15% of retail as companies add incentives to move their iron into the market. At a time when the on-road trucking industry is facing a move to newer, higher-efficiency engines, some truck fleets are being hit with softer freight-moving demand. That means the trucking firms aren't buying new trucks.

For the farmer who is thinking of upgrading to a newer used rig, or even considering the purchase of a new truck, if you've got the financing capacity it's definitely a buyer's market.

I've often thought that lately. The market is soft as people live in fear that their jobs could be gone overnight. That keeps consumers from making big-ticket purchases. This is affecting the car market too - as you can see from the latest news about General Motors (soon to be just two brands, and a few dealerships) and Chrysler (soon to be part of Fiat - or so allied with the Italian car maker that the it might be hard to tell the difference).

Farmers, the ultimate bargain hunters, may find today's market for big trucks and pickup trucks a potential buying opportunity. It might be worth looking into.

If you've had a buying experience recently you want to discuss, make a comment here.

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