Strong demand for used ag equipment

The used agricultural equipment market fared well in 2022 with a significant increase in sales compared to FY2021, with tractors, sprayers and grain bins taking out the top three items by volume, according to auction house Ritchie Bros’ Annual Market Trends Report.

Ritchie Bros. said global OEM supply issues were the key driver of demand for used equipment across all sectors. The lack of supply led to increased demand and prices for used equipment across the world.

The report found that on Australian shores, lack of supply generated greater interest in used equipment auctions, with Ritchie Bros. recording increases in registered bidders (up 42 per cent), sellers (up nine per cent), lots sold (up 27 per cent), and buyers purchasing power (15 per cent) compared to FY21.

Complete dispersals in 2022 also increased significantly, with market conditions motivating many Australian operators to bring forward retirement, close their business and capitalise on the strength of used equipment pricing, according to Ritchie Bros. This was most notable in the transport sector, where a number of large industry players left the market and triggered full dispersal and retirement sales.

Ritchie Bros’ reported on three key sectors – transport, agriculture and construction.

Transport was the star performer out of the three sectors, recording a 37 per cent increase in sales in FY2022, with agriculture trailing behind.

The construction sector struggled a bit due to labour shortages, rising cost of material, project delays and ongoing supply chain issues; but remain buoyant, with sales one per cent down on FY2021.

In terms of the ag categories, tractors did the best with 205 units sold in 2022, representing a four per cent increase on FY2021 figures.

Sprayer sales went up by 133 per cent, with 50 units sold in 2022 compared to 21 in 2021. Grain bin sales went from 15 in 2021 to 44 in 2022, which was almost a 200 per cent increase.  

While sales were up, median prices were down, decreasing by 16 per cent for sprayers, 30 per cent for grain bins and 25 per cent for tractors.

Ritchie Bros. said strong commodity prices, a broken drought, the second highest value of crop production on record and the Federal Government’s Temporary Full Expensing Program all contributed to a surging demand for agricultural machinery.

Related: Tractor sales in 2022 top $2.3 billion

The company added supply chain constraints delaying new machinery into the market has been pushing demand for used machinery, and anticipates that trend to continue into 2023 as wait times on new tractors persist.

“The TMA predicts a ‘pretty healthy’ year in 2023 although the industry will be bracing for the impact of rising inflation and interest rates, a possible watershed moment in June when the Temporary Full Expensing Program is scheduled to finish and weather patterns that may shift away from La Nina,” Ritchie Bros. said.

“Other issues to watch in 2023 will be the uptake of electric machinery (likely in the small lawncare and horticultural space initially) and the Federal Government’s move to establish regulations around emission reductions for non-road diesel engines.”