After several years of record-high prices and unpredictable swings, the farm equipment market is beginning to rebalance. For many operations, especially small and mid-sized farms, this reset presents a meaningful opportunity to upgrade machinery at a lower cost. New equipment prices have leveled off but remain high in relation to falling commodity prices. However, late model used equipment prices have fallen from the sharp inflation of the post-pandemic years.
Industry data and on-the-ground observations indicate we are in one of the most favorable times in recent years for farmers to explore equipment purchases—provided those decisions are guided by sound financial analysis and long-term planning.
From Inflation Surge to Market Correction
During the height of the COVID-19 pandemic, supply-chain disruptions, government stimulus programs, and strong commodity prices combined to drive a historic spike in farm-equipment costs. Farmers who had cash on hand competed for limited inventory, sending both new and used prices sky high.Thankfully, this trend has since leveled out, or in some cases, reversed. Used equipment values have declined consistently over the past two years as inventories have grown, and commodity prices have softened. According to Colton Vrable, an appraiser with GreenStone Farm Credit Services, the shift has been significant.
“Inventory levels are high at the dealer level, both new and used,” Vrable explains. “That higher supply is bringing prices down. We’re seeing year-over-year decreases in used-equipment values across nearly all categories.”
Vrable notes that combines have experienced some of the largest declines, while new-equipment prices are increasing only modestly—about 1 to 1.5% year over year—largely keeping pace with inflation and input costs such as steel, and a relief from post-pandemic years that saw annual prices rise as much as 5 to 7% annually. While new equipment prices have not declined at the rate commodity prices have, they have fallen to more historic levels of growth.
New Opportunities
Lower prices and greater selection mean many producers can replace outdated machinery with newer, more efficient models that were unaffordable just a few years ago. For these buyers, late-model tractors, combines, and implements often deliver significant gains in reliability and technology without the financial burden of brand-new equipment.Vrable describes the current situation as a classic point in the agricultural cycle: “The market is cyclical. We’re in a downturn where equipment is cheaper than it has been. When the ag economy rebounds, prices will rise again.”
That cyclical pattern—declining values during low commodity periods and higher values during profitable years—suggests that the next uptick in commodity prices will again push equipment costs upward. For farmers considering upgrading, market shifts could provide an opportunity to invest and avoid the inevitably higher prices that will come with an improved ag economy.
Know Your Numbers
While current market conditions should be encouraging to some producers, the decision to invest in equipment must begin with a careful assessment of financial capacity. Each operator should “know their numbers” to best align market conditions with business goals and make sound financial decisions.In the current rate environment, interest differences between five-, six-, and seven-year equipment loans are relatively small. Extending loan terms may improve cash flow and reduce financial strain, provided the equipment’s useful life supports the term.
GreenStone offers financing for both new and used equipment with repayment terms up to seven years. Equally beneficial to the farmer, GreenStone does not impose strict limitations based on the equipment’s age or usage hours. This flexibility allows borrowers to structure payments that complement their farm’s revenue cycle and capital strategy.
Sound borrowing decisions rely on accurate accounting and financial awareness. Farmers who understand their operating costs, break-even points, and annual obligations are best positioned to determine what level of debt their operation can support. A disciplined approach goes a long way in ensuring that an attractive purchase price translates into a sustainable long-term investment.
Evaluating Value and Timing
Determining whether an equipment upgrade is appropriate should be guided by measurable value. The true cost of ownership—purchase price, maintenance, repair, and operating efficiency—should be compared against projected productivity gains.For example, if replacing an older tractor reduces hourly operating costs considerably while improving reliability, the financial return may justify the investment even in a cautious market. On the other hand, purchasing equipment that exceeds the operation’s needs or repayment capacity can create unnecessary risk.
Vrable encourages farmers to use multiple reliable sources when assessing equipment values. Online platforms such as Tractor House and Machinery Pete provide recent sale listings and auction data that reflect regional trends. He also recommends utilizing the Purdue Ag Economy Barometer, which tracks nationwide agricultural sentiment and capital-investment intentions.
“Being diligent about research goes a long way,” advises Vrable. “Look at the most recent sales in your area. The market has changed quickly, and using up-to-date information helps farmers make better-informed decisions.”
The Relationship Advantage
Working closely with a trusted lender remains one of the most effective ways to navigate equipment purchases. GreenStone’s relationship-based approach allows lenders to understand each customer’s financial situation and operational goals, ensuring loan structures align with realistic repayment capacity.Lenders can also help producers evaluate timing. Because equipment and commodity prices often move together—with equipment prices lagging several months behind commodity shifts—lenders familiar with market cycles can provide valuable perspective on when to buy or hold.
Farmers uncertain about their equipment values can request professional fee appraisals through GreenStone. Understanding the fair-market value of existing equipment can strengthen trade-in negotiations and clarify the financial impact of upgrades.
Positioning for Long-Term Success
The recent market correction underscores the importance of patience and preparation in capital-equipment planning. Producers who held off on upgrading during the extreme price inflation of the post pandemic years now find themselves in a more balanced environment where disciplined financial management can yield real advantages.High inventory levels give buyers leverage, but the key to long-term success is ensuring any purchase complements the farm’s overall strategy. Matching the right piece of equipment to the right financial plan enables efficiency improvements without jeopardizing stability.
As Vrable observes, “There’s more bargaining power now with how high the inventory is on dealer lots. If an operation has the numbers in place, it’s a good time to make some changes.”
Farmers considering new or used equipment should begin by reviewing their balance sheets, updating cash-flow projections, and consulting with their lender. With clear financial insight and professional guidance, producers can identify opportunities that enhance productivity and maintain healthy margins.
Looking Ahead
The agricultural economy will continue to evolve, but the fundamentals of smart investment remain constant: know the numbers, understand the market, and make decisions grounded in long-term sustainability.
Used-equipment prices have declined to their most reasonable levels in years, while new-equipment costs have stabilized but remain high in comparison to commodity prices. For operations positioned to invest, the combination of lower used equipment prices, ample inventory, and flexible financing options provides a rare opportunity to strengthen capacity for the seasons ahead.
By pairing market awareness with disciplined financial planning, farmers that know their numbers have the opportunity to transform today’s price correction into tomorrow’s competitive advantage.
This article was originally published in Michigan Farm News.
