There was a flurry of high sale prices on mid-range horsepower tractors in September 2015. For example, a 1990 Case IH 7120 front-wheel assist tractor with 166 hp and 1,569 hours sold at a Sept. 11 farm auction in northeast Michigan for $69,000. Yes sir, that’s a new record high price for a Case IH 7120.
The very next day, a 1991 model 7120 2WD with 2,149 hours sold for $67,000 at a farm auction in southwest Minnesota. That was a record auction price for a 7120 2WD.
I’ve found the same heat on newer-model mid-range horsepower tractors. For example, a 2012 John Deere 6125R with 125 hp, mechanical front-wheel drive, an H340 loader and 444 hours sold for $106,000 at a Sept. 25 farm auction in west-central Minnesota. That’s at the top end of what many dealers ask for similar models. See for yourself at machinerypete.com.
Against The Trend. Used values have been under pressure in higher-horsepower segments since mid-2013 with falling commodity prices and higher numbers of late-model units on dealer lots. Yet used tractor values in the 130-hp to 200-hp range have held strong.
Note the 8.2 rating in my quarterly Machinery Pete Used Values Index for this category. The 8.2 rating has held steady and begun to inch higher. It’s based on data I’ve compiled for 26 years. Used values are a bit lower than those of 2012, but the drop has not been nearly as much for mid-range horsepower values as for higher horsepower and 4WD values.
Two factors are working in favor of mid-range values holding and rising. First, mid-range used tractors move off dealer lots quicker than larger machines. Second, strength in the livestock sector has pushed hotter bidding.
December is always an active month for auctions. Historically, sale prices have worked upward at the end of the year because the Section 179 tax write-off has motivated buyers to act. As of this writing, there hadn’t been any action to increase the $25,000 cap. A lack of movement might lessen buying incentive.
Winter Auction Outlook. Two other factors could dampen used values in this sector moving forward. One is a noticeable uptick in the number of machinery auctions. In August, I saw a 42% year-over-year increase in total machinery auctions. In September, total auctions jumped 22%. A second downward pressure here could be livestock market softening.
Yet an abiding factor that tends to hold up used values in the mid-range category is the fact that we’re not talking about $250,000 price tags. The under-$100,000 playground holds values more steady.
Mid-Range HP Strength
Used tractor values in the 130-hp to 200-hp range
have held steady.
In the market for used equipment? Check out the all-new Machinery Pete marketplace. Shop for used machines from across the country and search more than 78,000 listings for free using innovative tools for farmers and dealers. Visit machinerypete.com.