When I write about the latest trends in used farm equipment values, it all revolves around the data. Are prices up? Down? By how much? But I’ve always been fascinated by another angle, which I refer to as the “chatter factor.”
When I began tracking auction prices in 1989 the chatter factor was most evident on sale days when dozens of farmers gathered to eat donuts, socialize and, for some, bid. There was no such phenomenon as the internet back then. At every sale or farm show I attended I always tried to listen to conversations to hear what folks were talking about.
I still make a point to listen to the chatter, but thanks to online discussion boards such as our own “Pete’s Machinery Talk” at www.Machinery Pete.com the chatter has magnified. Of course, social media such as Facebook, Twitter and Instagram are a 24/7 non-stop flow of chatter.
When nice front-wheel- or two-wheel-drive tractors show up at auction I hear lots of chatter and see stronger sale prices. This trend has picked up steam in the past 18 months thanks to increased buyer demand.
In light of equipment getting bigger and bigger, I find the heightened attention on smaller two-wheel-drive tractors intriguing. What’s behind it? There’s no doubt, cost is part of it. A bigger factor, though, is scarcity.
Check out the data table on page 64, particularly the “Year” column. Notice most of the tractors are late 1980s through early 2000s models in the 130-hp to 200-hp range. These days, two-wheel-drive tractors seem quaint. But come with me to an auction and you’ll hear the chatter and know the demand for smaller is there.
Many of the sale prices listed in the table are hard proof. There’s no better example than the 1989 John Deere 4055 two-wheel drive with only 215 actual hours that sold for $93,000 at a farm auction on Dec. 19, 2016, in east-central Nebraska. This tractor garnered perhaps the most intense auction bidding I’ve ever seen with up to five people at some points in hot pursuit (check out the YouTube video of the bidding on the Machinery Pete channel). The final $93,000 price tag beat the previous high auction price for a John Deere 4055 by nearly $30,000.
The real kicker is the tractor wasn’t purchased by a collector. Nope, a father-and-son farming duo from South Dakota bought it to bale hay. The father’s favorite tractor has always been the John Deere 4055, so when they saw a like-new model with only 215 hours and one owner was to be auctioned at a Nebraska farm sale, they made a trip.
Take a look at the sale prices below and you’ll note most of the tractors sold in the high $30,000 to low $50,000 range. In a stubbornly sluggish ag economy, $50,000 and under is a sweet spot for holding values.
I’d also like to point out the second tractor listed in the table—a 1998 Case IH 8910 with 2,730 hours that sold for $52,500 at a Dec. 2, 2016, farm auction in north-central Illinois. That’s the highest auction price in eight years.
Looking ahead, I think buyer interest for two-wheel-drive tractors in good condition will continue. In fact, in early November, I received two notes via our Facebook page asking if I saw the 1992 John Deere 4455 two-wheel drive with 1,955 original hours that was going to be sold at a Nov. 18 farm auction in Pendleton, Ind.? You bet I was watching that sale. The tractor ending up bringing $48,000.