Self-propelled Forage Harvesters Gaining Popularity - EquipmentWatch

Self-propelled Forage Harvesters Gaining Popularity

Results of the 2012 Census of Agriculture illustrate that in the continental US, the number of self-propelled forage harvesters in inventory ranged from 22 in Rhode Island to 5800 in Wisconsin.

Key Takeaways for Decision Makers
BUYER/SELLER: Buoyed by cattle herd expansion and the resulting demand for hay and forage, self-propelled harvesters are gaining popularity. Many of the units now entering the resale market were produced since the 2007 Census of Agriculture.

Every five years, the USDA conducts a Census of Agriculture to provide a detailed view of American farms, ranches, and the producers who operate them. The results of the 2012 census, released in May 2014, illustrate the rise in the use of self-propelled forage harvesters. According to the National Agricultural Statistics Service (NASS), which compiles the census data, the number of self-propelled forage harvesters in operation nationwide rose 13% from 2007 to 2012. With the exception of Hawaii, inventories grew in every state.

Drastic changes in self-propelled forager inventories should be read cautiously. Of the five states with the highest growth rates, only New Mexico exhibited an initial inventory greater than 500 units. NASS recorded 382 self-propelled forage harvesters in Mississippi, and the remaining three states each had fewer than 150 units. In states with low volume, the addition of just a few dozen units resulted in an explosive rate of change from 2007 to 2012.

Of greater interest are states with more moderate growth but higher initial volume. For example, California had 2,188 units in 2012, a 34% increase since 2007. Idaho, Virginia, and Kentucky also saw significant gains ranging from 23% to 32%. In states with 2007 inventory levels of 1,000 or greater, the average growth rate was 12%, indicating that the U.S. market is far from saturated.

Above, average prices and volume are indexed to show percent change from January of 2014. In February 2015, volume was 64% higher than the initial level, while prices were up 12%.

What are the implications of a surge in harvesters for the resale market? While self-propelled forage harvesters constitute only a small portion of agricultural equipment available on the used market, the growth in market activity is significant. So far in 2015, resale volume is 67% higher than it was last year. Minnesota, Iowa, and Wisconsin have emerged as the most active markets, which corresponds roughly to the observed inventory in 2012. In the last USDA Census of Agriculture, Wisconsin ranked first for volume and Minnesota ranked third. Iowa ranked ninth by volume, but its 8% growth rate was higher than that of Minnesota or Wisconsin, indicating strong demand.

Prices are also up year over year. In the first quarter of 2015, average prices were 13% higher than they were in 2014. Part of the increase in price can be attributed to equipment age; year over year, the average age of self-propelled forage harvesters on the market declined from 9.1 years to 7.9 years. Newer models are entering the market in greater numbers than ever before.