High used equipment inventories is a problem plaguing North American farm equipment dealers. According to the Ag Equipment Intelligence’s October Dealer Sentiments & Business Conditions survey, a net 33% of dealers say they used equipment inventory was too high in September. Dealers have been reporting inventories of used equipment were too high all the way back to June of 2012.
Some dealers had been finding success with moving used equipment to the Ukraine and other eastern European countries, however turmoil in the region has limited that resource. One untapped resource, according to Maurice Taylor, chairman and CEO of Titan International, is South America.
“I was really shocked by the absence of large 4WD equipment in South America. I've talked with U.S. dealers about taking used machinery to South America, reconditioning the equipment and then getting local dealers to work with U.S. dealers to sell the equipment. This would be great for the OEMs because that market could absorb a large portion of the used machinery located in the U.S. I believe that a few U.S. dealers with entrepreneurial drive could make this happen.”
According to export.gov, agriculture equipment is one of the promising areas for U.S. exports, building and construction equipment and materials. And in Columbia, agriculture grew 2.5% during the second quarter according to Bloomberg Business. According to the Bloomberg report, “Finance Minister Mauricio Cardenas has said repeatedly that industry and agriculture will get a boost from the 23% depreciation of the peso over the past year, helping to revive growth and offset reduced oil exports.” Columbia was also on export.gov’s list of countries of interest.
What do you think, is Taylor on to something? Is this a viable option to help relieve some of the pressure high used equipment inventories are placing on North American farm equipment dealers? Share your thoughts in the comment section below.