A bit of sticker shock is in store for those producers in the market for new tractors equipped with the new Tier 4 interim engines.
According to Ag Equipment Intelligence (http://www.farm-equipment.com/pages/Ag-Equipment-Intelligence.php), on average dealers expect about a 7 percent price increase in 2011 for the new engines.
All four of the major manufacturers (AGCO, Case IH, John Deere, New Holland) surveyed indicated they anticipate a price increase of anywhere from 6.5 percent to 7.5 percent. The report was based on dealer surveys.
We’ll have to keep an eye on further price surveys to see if any trickle-down price increases will occur in other equipment categories, but what this survey does show is that implementing the Tier 4 interim requirement will have additional costs associated with it.
And because equipment manufacturers are busy working to find solutions to final Tier 4 standards, it’s probably a safe bet that the next round of Tier 4 will have a higher price tag as well.
With the anticipated increase in price, some producers could take another look at their equipment and perhaps delay purchasing decisions. That could put a premium on maintenance and upkeep for their high-horsepower fleet.
One thing’s for sure: It isn’t easy – or cheap – to be green. (No pun intended for our friends who make that color equipment.)
How would higher prices for tier-4-interim-equipped tractors figure into your buying decisions for 2011 or 2012?
I’ve got a wait and see attitude. I’m not buying until manufacturers work out the kinks on these engines and the price comes down. Fortunately, I have the option to wait. I have good equipment and I maintain it regularly.
It will be interesting to see if more producers have the same thoughts. I have some quarterly sales numbers that I am reviewing to see if there are any emerging trends. I will have an updated post soon. Of course a lot of other factors are at play, but you aren’t the first to make that comment.
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