Thursday, May 31, 2012

Inflation in Machinery

Via today's Farm Policy, an illustration of the economics of farming at the farmdoc blog  (“Machinery Cost Estimates for 2012 and 2013”) that farmers are price takers: ”
": Prices of new machinery have increased for most machines between 2010 and 2012. For example, the list price of a 215 horsepower tractor in 2012 is $215,000. A comparable sized tractor in 2010 has a list price of $181,500. Between 2010 and 2012, the price of this tractor has increased by 18 percent."
 Now I don't remember any big price increases on cars or trucks in recent years, so what's happening is the implement manufacturers are raising their prices to what the market will bear, and there's not enough competition to keep the prices down.   Any guess as to implement prices if and when corn drops to $3?

1 comment:

Anonymous said...

In my area, where peanuts and cotton are the predominant crops, there was a increase in demand as well, especially on peanut equipment due to the high crop prices seen last year. A few farmers claimed that John Deere offered them more for their tractor to trade than they paid the previous year.