In late June, auctions experienced a noticeable bump upward in pricing, going against the typical dip that occurs during this time of the year. Normally, May to September experience a decrease in prices. At the end of the year those prices would generally build back up. Now, as prices refuse to fall, that could indicate stronger pricing heading toward the end of the year.
“This noticeable jump now is almost twice as important because I think it points toward where we’re going toward the end of the year,” says Machinery Pete.
Some examples for these higher prices during this time frame include a Ritchie Bros. Auctioneers sale and this week’s Pete’s Pick. A 2024 John Deere S780 with 476 engine hours selling for $414,000. That is the highest price on this model with over 450 hours in two and a half years. June also saw a 2006 John Deere 9660 STS combine with 3,105 engine hours sell for $68,000. That is the highest auction price on a 9660 with over 3,000 hours in four years.
Used Tractor Values Surge as New Equipment Sales Fall
The supply chain has also tightened in the past 18 to 24 months regarding 100- to 200-horsepower tractors. This has led to the strengthening of used machinery values. Meanwhile, the sales of new machinery is decreasing. According to Machinery Pete, in June, there was nearly a 20% increase in the number of auctions compared to the same time last year. Current prices for new and used equipment are forcing farmers to reconsider typical trade cycles.
An example of a stronger used machinery sale is a 2013 John Deere S670 with 2,316 engine hours selling for $103,500. This is the second-highest auction price this year. Meanwhile, the average auction price for this model is around $75,125 this year.
Two more examples are of a pair of 2023 John Deere 6R 175, with over 200 and 300 hours respectively; both selling for $185,000. One of the machines is the second-highest auction price ever on a 6R 175 with over 300 hours.
“Doors are starting to open towards people being excited about maybe looking at some of this one- or two-year-old stuff,” says Casey Seymour, co-host of the Moving Iron podcast.
Farmers to Squeeze More Life Out of Equipment
As the market tightens, this could also lead to a “new normal” in how farmers handle their equipment. This could develop into longer trade cycles. Farmers may start trading equipment every five to seven years rather than every three to five years. This means putting more hours on machinery, and using less machinery on the same number of acres.
“The efficiency that people are looking for means they are going to squeeze every drop out of every piece of equipment they’ve got out there right now,” Seymour explains.
Listen to the latest “Moving Iron” podcast for more from Machinery Pete and Seymour as they continue to break down the ever-evolving tractor market.
