With consolidation in the farm equipment business, dealers are capitalized differently and have a different relationship with the manufacturer than was seen just a decade ago. ‘Machinery Pete’ Greg Peterson says those dealers have a glut of late-model equipment. “That’s why you saw this big jump in tractors, sprayers, and planters taken to auction,” said Peterson. “The losses the dealers are taking are significant, but they don’t really have a good option, because they’re paid eight percent holding costs. That’s where the cost of new (equipment) rising over the last decade made that problematic if you’re a dealer.” Manufacturers and dealers are being forced to work down the inventory levels. Peterson, who spoke at Bean Day, said farmers should not assume they will have the same leverage they had ten years ago. The dealers today have moved the price of new equipment so high, they need to maintain those values. Peterson will also be featured at this week’s MN Ag Expo in Mankato. The full interview with Peterson is available here.
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