Why some farmers are turning to pre-owned tractors

The past two years have seen a severe global shortage in the supply of new agricultural machinery, and its effects have been felt at every level of the value chain.The reasons for the shortage are varied: Covid-related lockdowns, supply chain problems, a shortage of microchips (a problem that has affected many sectors) and weak commodity prices. Combined, they have produced a giant headache for manufacturers, dealers and farmers.To take just one example, agricultural machinery manufacturer Case IH has been struggling to get a backlog of 1 000 tractors into South Africa, according to Arno du Plessis, head of tactical marketing and portfolio at CNH Industrial for Case IH.“Farmers ordered these machines for the previous planting season and they still haven’t received them,” he explains.The scale of this backlog can be gauged by the size of South Africa’s tractor market, which is a mere 7 000 units per year.One of Du Plessis’s biggest concerns is the fact that there is only one freight-shipping per month from Europe and the US to South Africa. “If you miss that one slot, you miss out.”He adds that a shortage of parts has compounded the problem.“In addition to electronic parts, it’s spares like tyres, rims and controllers. The microchip shortage isn’t the only issue; you can’t operate a tractor if it doesn’t have a seat.”Antois van der Westhuizen, managing director of John Deere Financial Africa, concurs: “There simply aren’t enough new tractors available to feed the global demand.”Appetite for new technologiesAccording to the Agrievolution Alliance, which represents more than 6 000 agricultural equipment manufacturers across the globe, approximately two million tractors are sold worldwide every year.In November 2021, US-based publication Successful Farming wrote that the current machinery shortage “has been years in the making, with the stage already being set in 2013”.Back then, the demand for new machinery collapsed due to declining agricultural commodity prices, to which machinery manufacturers responded by reducing production.At the same time, dealers had problems of their own: a sudden abundance of used late-model machines traded in over the previous five years.“Companies worked aggressively to [offload] this used surplus by arming dealers with buyer-incentive programmes that slashed asking prices, offered no- or low-interest loans, and extended warranty coverage through attractive certified pre-owned programmes,” reported Successful Farming.This move drew many farmers’ attention away from new machines and towards buying used ones instead, resulting in the further erosion of already sluggish sales.All of these actions prompted players in the global farm equipment industry to slow their operations down even further, with new machinery being turned out only as required.However, the landscape has changed in the recent past, and agricultural commodity prices are now booming. The knock-on effect has been an explosion in demand for new machinery, but manufacturers simply cannot keep up.India and ChinaIndia and China accounted for the lion’s share of new tractor sales worldwide in 2021. These two markets also saw the biggest compound annual growth rates in machinery purchases at 8% and 7% respectively, with sales reaching a combined figure of 1,36 million units, according to market research company Mobility Foresights.The company believes that by integrating advanced technologies such as telematicsand GPS into farm machinery, sales of new tractors and other machinery will be boosted even more in the near future. Indian farmers, for example, are readily investing in tractors equipped with new technology, appreciating its obvious advantages.During the first quarter of India’s 2021/22 financial year, that country recorded domestic tractor sales of 229 441 units. Despite the fact that sales were depressed due to Covid-related lockdowns, this figure was still nearly 39% higher year-on-year, according to Mobility Foresights.The Indian government, under its Macro Management of Agricultural Schemes, is boosting this trend by offering farmers provisional subsidies for the purchase of new tractors equipped with new technology.

Why some farmers are turning to pre-owned tractors

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Namibian Sun 2025-04-25

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Why some farmers are turning to pre-owned tractors

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Namibian Sun 2025-04-25

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