Record used equipment prices aren’t pushing dairy farmers to buy new-discover why economic survival tactics drive their real choices.
The conventional wisdom that sky-high used equipment prices would drive dairy farmers toward new purchases has been turned on its head. The reality? New farm equipment sales plummeted 13.2% in 2024, revealing a market driven by economics, not auctions- much like milk prices rarely follow rational expectations.
In dairy farming, few topics generate more heated discussion than equipment purchasing strategies, perhaps the eternal debates about Jersey versus Holstein efficiency or sand versus mattress bedding. With eye-popping auction results making headlines-like that 2001 John Deere 8210 tractor fetching a record $132,500 or the vintage KUHN Knight 5144 Vertical Maxx TMR mixer bringing 60% more than book values, tempting to assume these astronomical used prices must be pushing farmers into dealership showrooms.
But that’s not what’s happening. Not even close.
The unexpected truth? New equipment sales are in free fall, down double digits across most categories. The relationship we’re seeing isn’t what equipment manufacturers hoped for or dealers expected. Instead, the high prices for certain used equipment segments are a symptom- not a cause of the profound economic challenges reshaping how dairy farmers approach machinery investment, much like how culling decisions change dramatically when milk-to-feed margins compress.
Let’s cut through the conventional wisdom and explore what’s happening in farm equipment markets, why it matters to your dairy operation, and how smart producers navigate this complex landscape with the same strategic thinking they apply to genetic selection.
The Used Market Split No One’s Talking About
The narrative that “used equipment prices are high” is painted with too broad a brush-like saying all Holsteins are the same regardless of their genetic merit. What’s unfolding is a bifurcated market that tells a more nuanced story about farmer priorities.
On one side, older, simpler, well-maintained equipment-particularly models predating complex emissions systems like DEF and Tier IV engines-commands premium prices. That 2001 JD 8210, with just 3,059 hours, fetched $132,500 at a farm estate auction, setting a record. A 2012 Patz 800 series manure scraper system recently sold for nearly double its expected value, while a well-maintained 15-year-old Meyer TMR mixer with documented service records brought 40% more than similar units with unknown histories.
“The previous owner’s meticulous maintenance was explicitly highlighted as a value factor,” notes one auction report, underscoring why these machines command such premiums- a principle dairy farmers understand well when purchasing high-quality replacement heifers with documented health histories.
But flip to the other side of the market, and you’ll find late-model used equipment (less than three years old) experiencing significant price softening since late 2023. Values for high-horsepower tractors had reportedly fallen sharply, with the market decline likened to what happened between 2013 and 2015 when Class III milk futures dropped from nearly to under .
Why? Dealers are flooding auctions with late-model units, up 60.5% over 2023 levels. For high-horsepower tractors (175+ HP), the increase is a staggering 114.2%-the kind of surplus that would make even the most optimistic milk marketer nervous.
The dairy equipment reality check:
The pattern holds when we look at equipment commonly used on dairy farms. That Patz V-Series TMR mixer you’ve been eyeing follows the same trend-2010-2015 models in excellent condition are commanding prices within 30% of newer units, while those after 2020 are depreciating faster than fresh cows lose body condition. Older, reliable loader tractors maintain exceptional value (especially those JCB telehandlers that reach the top of silage bags). In contrast, late-model 100+ HP tractors saw auction values decline 8.51% year-over-year into early 2025.
Manure management equipment shows tremendous variability, with auction prices for Houle tankers ranging from under $10,000 for older models to over $100,000 for high-capacity units with precision application systems that satisfy even the most stringent NRCS compliance requirements. Forage harvesters follow similar patterns. Pull-type units often start at just a few hundred dollars at auction (about the price of a single dose of sexed semen). At the same time, a 2023 Claas Jaguar 990TT commands an eye-watering $595,000, roughly equivalent to the construction cost of a modest 60-stall free stall addition.
New Equipment: The Price Problem No One Wants to Admit
While used prices tell part of the story, let’s address the elephant in the equipment shed: the relentless escalation of new machinery prices.
Since 1990, the average price for a new 200-horsepower tractor has surged 287%-roughly double the overall inflation rate during that period and significantly outpacing even the most dramatic milk price cycles. That’s not incremental growth; it’s a fundamental reshaping of the capital investment landscape for dairy operations.
Industry observers note tractors with list prices reaching $1.2-$1.4 million in 2024. Let that sink in for a moment. At $22/cwt milk, assuming a generous 20% profit margin, that single tractor represents the profits from nearly 32 million pounds of milk-roughly the annual production of a 1,500-cow dairy. In an environment where USDA projections indicated substantial declines in average net cash farm income across the agricultural sector (nearly 20% for producers in the heartland region from 2023 to 2024), these price points have become increasingly disconnected from economic reality.
A 2023 study of Northeast dairy farms showed average net earnings per cow plummeting from $945 in 2022 to $292 in 2023-less than the cost of a quality box stall mattress. With that kind of margin pressure, it’s no wonder farmers think twice three times before signing on the dotted line for new iron.
Have equipment manufacturers completely lost touch with the economic realities of dairy farming? When a piece of equipment costs more than many smaller dairy operations’ annual revenue, we’ve crossed from reasonable business investment into absurdity.
What the Sales Numbers Reveal
If high used prices drove farmers to new equipment, we’d see that reflected in sales data. Instead, the numbers tell a completely different story, unmistakable as SCC readings that spike right after you’ve reduced your prevention protocols.
Official statistics from the Association of Equipment Manufacturers (AEM) reveal:
- Total farm tractor sales finished 2024 13.2% lower than 2023
- Sales of 100+ HP 2WD tractors (critical for many dairy operations) declined by 17.5%
- Self-propelled combines saw a 24.3% decrease
These aren’t minor adjustments- they’re significant market contractions, the equipment equivalent of seeing a 15% drop in national milk production. And they directly contradict the theory that farmers are abandoning the used market for shiny new alternatives.
When surveyed, nearly 80% of farmers indicated they planned to cut back on machinery purchases in 2025, making it the top area for cost reduction. Another 60% planned to slow down technology upgrades- a strategy familiar to dairy farmers who might postpone that activity monitoring system upgrade when milk prices retreat.
The verdict is clear: farmers aren’t buying the industry’s “upgrade or fall behind” narrative. They’re voting with their wallets; the ballot box is nearly empty.
The Smart Money: What Progressive Dairy Farmers Are Doing
So, what strategies are they employing if farmers aren’t rushing to trade their used equipment for new models? The evidence points to several approaches that prioritize financial prudence while maintaining operational capability-the same balanced thinking that goes into deciding between preventive hoof trimming or dealing with lameness reactively.
1. Strategic Used Equipment Purchases
Innovative dairy farmers are leveraging the bifurcated used market to their advantage. They’re targeting well-maintained, simpler machines that offer reliability without the technological complexity and higher repair costs of newer models. The key is thorough inspection and evaluation of maintenance history. A pristine 15-year-old tractor with meticulous service records might be a far better value than a neglected 5-year-old unit, just as a well-managed 5-lactation cow often outperforms a stressed first-calf heifer.
As one Wisconsin dairy producer said, “I’d rather have a 10-year-old JCB loader with complete maintenance records than a 3-year-old machine with unknown history’s like choosing between a proven dam with five generations of records versus a flashy heifer with no production background.”
2. Rising Interest in Leasing
Leasing activity began increasing in the second half of 2024 as “producers began exploring methods to reduce equipment costs.” This trend is expected to continue in 2025 as farmers look for ways to access necessary machinery without significant capital outlays, much like how some farmers lease their replacement heifers rather than purchase them outright.
Different leasing structures offer varying tax advantages, providing flexibility depending on your farm’s financial situation. A valid tax lease allows for consistent expense write-offs over the lease term. In contrast, a conditional sales lease allows claiming depreciation like a loan but often with lower payments. Your chosen structure should align with your dairy’s cash flow patterns, mirroring how you manage your milk check assignment for feed purchases versus capital improvements.
3. Focus on Extending Equipment Life
Perhaps the most widespread strategy is keeping existing equipment running longer through enhanced maintenance and strategic repairs. Rather than full replacement, many dairy farms are:
- Implementing more rigorous preventative maintenance schedules (think of it as the TMR mixer equivalent of your parlor’s pulsator maintenance program)
- Investing in major repairs rather than replacements (rebuilding that Jaylor mixer’s planetary gearbox rather than buying a new unit)
- Selectively upgrading components or retrofitting technology onto older platforms (adding VFDs to your manure pump system rather than replacing the entire setup)
This approach addresses the need to manage capital expenditure while maintaining operational capacity. With the high price differential between repair costs and new equipment purchases, this strategy often makes compelling financial sense. Maintaining your existing DeLaval parlor might make more sense than installing robots at $150,000 per box.
4. Technology Retrofits: The Best of Both Worlds
Progressive farmers find the middle ground by retrofitting specific technologies (like GPS, precision agriculture components, or monitoring systems) onto viable older platforms. This provides some efficiency and data benefits of newer equipment without the complete sticker shock.
One dairy producer from California’s Central Valley explained, “We added aftermarket auto-steer to our 2010 silage chopping tractor for $8,500-about 5% of what a comparable new unit would cost. It’s like adding SCR technology to your parlor instead of rebuilding the whole milking center.”
When did we start believing technology had to come in a brand-new package with a million-dollar price tag? Smart farmers are separating practical innovations from expensive window dressing.
Tax Considerations That Could Make or Break Your Decision
The tax implications of equipment purchases have historically been a major factor in decision-making. Still, recent and upcoming changes significantly alter the calculus, as significant as the shift from conventional to component pricing in your milk check.
Section 179 of the IRS code allows businesses to expense qualifying equipment purchases in the year placed in service up to certain limits. For 2025, that maximum deduction stands at $1,250,000, though it phases out dollar-for-dollar once total qualifying purchases exceed $3,130,000.
But here’s what many dealers won’t emphasize: bonus depreciation, a powerful incentive for large equipment investments, is rapidly disappearing. After dropping from 100% to 80%, then 60%, it sits at just 40% for 2025, falls to 20% for 2026, and vanishes entirely by 2027.
This scheduled phase-down significantly reduces the tax advantages previously available for large equipment purchases. A multi-million-dollar purchase in 2025 will receive considerably less first-year tax relief than an identical purchase when bonus depreciation was 100% or 80%-similar to how culling decisions change when beef prices drop from $1.20 to $0.65 per pound.
The timing of your equipment acquisition strategies should align with these changes. For some operations, accelerating necessary purchases might make sense, while others might benefit from alternative structures like leasing that provide more consistent tax treatment. As one dairy financial advisor said, “Match your equipment investment timing to your dairy’s tax situation like you match your ration formulation to your forage inventory.”
The Total Cost Reality: Beyond the Sticker Price
When evaluating equipment options, the most sophisticated dairy managers consider the total cost of ownership-not just the initial price tag. This calculation includes:
- Initial purchase price or lease payments
- Financing costs (significantly higher in today’s interest rate environment)
- Expected maintenance and repairs
- Fuel and operational efficiency
- Insurance and storage
- Expected useful life
- Potential resale value
- Productivity impacts
Let’s see how this plays out across different options:
| Factor | New Equipment | Late-Model Used (3 yrs) | Late-Model Used (10 yrs) |
| Initial Cost | Very High ($25,000+) | Moderate to High ($15,000-18,000) | Low to Moderate ($5,000-8,000) |
| Warranty | Typically Included (12-24 months) | Usually Expired/Limited | None |
| Reliability | Highest Initially | Variable: Depends on hours/maintenance | Variable: Highly dependent on the condition |
| Technology | Latest Features | Relatively Modern | Basic/Older; Potential for retrofits |
| Maintenance (Initial) | Lowest | Moderate | Potentially Higher |
| Operating Costs | Potentially Lower | Variable | Potentially Higher |
| Financing Options | More Favorable Terms | Standard Rates | Standard Rates |
| Depreciation Rate | Highest Initially | Moderate | Slowest |
| Resale Value | Potentially Stronger Long-Term | Moderate | Can be Strong |
| Expected Lifespan | Longest | Moderate Remaining | Shortest Remaining |
What becomes clear is that there’s no universal “right answer.” The optimal strategy depends on your specific operation’s financial position, risk tolerance, technological needs, and long-term goals, just as your breeding program balances production, components, health traits, and longevity based on your specific market and management style.
Have you calculated what that shiny new tractor costs you per hour? The answers might shock you.
Weather and Operational Timing: The Wild Card
Equipment decisions aren’t made in a vacuum. They’re deeply influenced by the operational realities of dairy farming, particularly the unpredictable weather patterns that can compress fieldwork windows and create immense pressure to maintain operational capacity, such as the urgency of getting corn silage harvested at the right moisture level before a significant rain event.
A survey indicated that 83% of respondents favored purchasing used machinery over new in response to the unpredictable weather experienced in 2024. When faced with uncertain conditions and tight operational windows, the financial flexibility afforded by lower-cost used equipment or leasing arrangements can outweigh the potential long-term benefits of new machinery’s reliability or technological advantages.
This calculus becomes even more complex when considering the labor component. With persistent challenges in finding and retaining farm labor (a consistent complaint at every dairy producer meeting from Wisconsin to California), investments in automation and technology through newer equipment can improve labor efficiency. However, this must be weighed against the capital cost savings of used equipment or alternative strategies.
As one Pennsylvania dairy farmer explained, “When you’re racing to chop 300 acres of haylage ahead of rain, it doesn’t matter if your harvester is a 2023 or 2013 model; matters is that it runs reliably during that critical 48-hour window.”
The equipment that puts feed in your bunker is worth more than the one that looks pretty in your shed. Are you making decisions based on operational demands or dealer pressure?
Is New Technology Worth the Premium?
While equipment manufacturers emphasize their latest models’ productivity gains, efficiency improvements, and precision capabilities, dairy farmers increasingly demand clear ROI before committing to technology-laden new equipment.
New farm machinery incorporates advancements in efficiency, precision agriculture, automation, data management, and environmental performance. But the adoption of these technologies is tempered by:
- High initial cost (a new DeLaval OptiDuo feed pusher might cost 3-4 times more than a used TMR mixer repurposed for the same task)
- Concerns about demonstrable ROI (like the “show me the money” approach many take toward activity monitoring systems)
- The complexity of operation and data management (requiring skills that many dairy operations are still developing)
- Need for supporting infrastructure like reliable internet (still a challenge in many rural dairy regions)
Surveys consistently indicate that farmers prioritize financially viable, practical solutions and integrate easily into existing systems. During periods of tight margins, there’s a marked tendency to slow down technology upgrades and focus on simpler, proven solutions, prioritizing a reliable skid loader over one with integrated scales and automatic feed recording.
Even younger farmers, often assumed to be more tech-inclined, exhibit caution, prioritizing operational stability and clear financial returns over adopting the newest, potentially high-risk technologies. As one young Minnesota dairy producer noted, “I’m as comfortable with technology as anyone, but I need to see how that $100,000 manure separator pays for itself before I jump in, just like I need to see daughter performance before heavily using a new bull.”
The industry’s obsession with the newest, shiniest technology costs dairy farmers millions of unnecessary expenses. When was the last time you demanded complex ROI numbers from your equipment dealer instead of just admiring the touchscreen display?
The Bottom Line: What This Means for Your Operation
The evidence overwhelmingly indicates that high-used equipment prices are not causing a significant shift toward purchasing new equipment among dairy farmers. Instead, the primary forces shaping equipment acquisition strategies are the prohibitive cost of the latest machinery and broader economic constraints facing dairy operations.
The strong demand for specific used equipment segments (particularly older, well-maintained machines) is a symptom of these economic pressures, not a driver pushing farmers toward new purchases. This reflects a rational adaptation to financial realities- farmers prioritize value, reliability, and capital conservation in their equipment decisions, much like they might choose proven sires over genomic youngsters during economic downturns.
For your dairy operation, the optimal approach involves:
- Stop playing the equipment game on manufacturers’ terms. Challenge the conventional wisdom that newer is always better and demand real ROI proof before signing any purchase agreement.
- Leverage the bifurcated used market where appropriate, targeting high-quality used equipment like you’d select proven quality genetics.
- Explore alternatives like leasing when they align with your financial goals, like how you might custom raise heifers rather than building new facilities.
- Implement robust maintenance programs to extend the life of existing assets, like the preventative hoof care that keeps your herd sound and productive.
- Be strategic about the timing of purchases to maximize diminishing tax advantages, coordinating with your dairy’s income cycle and tax planning.
- Demand clear ROI for any technology investments, applying the same scrutiny you’d give to a new feed additive or genetic selection tool.
These strategies allow dairy operations to maintain operational capacity while managing the significant financial pressures that continue to define the agricultural economy in 2025.
The equipment paradox isn’t a paradox at all when you understand what’s driving the market. High prices for specific used equipment categories aren’t pushing farmers to make new purchases- they’re a reflection of farmers making rational economic decisions in the face of increasingly unaffordable new equipment options.
It’s time to break free from the equipment upgrade cycle that serves manufacturers better than it serves your dairy. Calculate your equipment needs, develop a strategic acquisition plan based on your farm’s financial position, and don’t let dealer pressure or auction FOMO drive decisions your balance sheet should dictate.
Smart money isn’t necessarily new or used on the approach that best balances your operation’s immediate financial needs with long-term operational requirements. And increasingly, that means being creative, strategic, and willing to challenge conventional equipment acquisition wisdom-just as today’s most successful dairy farmers challenge traditional thinking about genetics, nutrition, and cow comfort.
Key Takeaways:
- New equipment sales crashed (down 17.5% for 100+ HP tractors) as farmers reject million-dollar price tags.
- Older used machinery sets records (1988 John Deere 4450: double its average price) while late-model gear nosedives.
- Economic survival trumps upgrades: Farmers extend equipment life through repairs, retrofits, and leasing.
- Bonus depreciation phaseout (down to 40% in 2025) slashes incentives for big new purchases.
- The real paradox: High used prices signal financial desperation, not confidence in new tech.
Executive Summary:
Despite soaring auction prices for older, simpler used farm equipment, dairy farmers aren’t flocking to new machinery-new sales plummeted 13.2% in 2024. The market is split: demand surges for pre-emissions-era workhorses (like a $132,500 2001 John Deere), while late-model used gear floods auctions, sinking prices. Crippling new equipment costs, tight margins, and fading tax incentives push farmers toward retrofitting tech, aggressive maintenance, and leasing. With milk-to-feed margins volatile, producers prioritize operational flexibility over dealer showrooms, proving high used prices reflect economic strain-not a shift to new iron.
Learn more:
- Key Financial Considerations Before Investing in Dairy Farm Technology
Explore the crucial financial questions every dairy farmer should ask before investing in new tech or equipment, from ROI to tax implications and timing. - The Hidden Causes of the Recent Boom in Dairy Farm Production Costs
Dig into what’s really driving up production costs on dairy farms, including the escalating price of equipment and the impact of modernization. - Steel Tariffs Drive 15% Spike in Dairy Equipment Costs, Threatening Exports
See how new tariffs are pushing dairy equipment costs even higher and what this means for your bottom line and the future of dairy exports.
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