I’ve seen many up and down cycles in agriculture over my 32 years of tracking used farm equipment values. In the past, when the good times rolled around, I’d see quite a few record-high auction prices, but they would trickle in. Now, we’re getting hit with an avalanche of record sale prices.
Since fall 2020, record after record has been set, and those high prices continue to rocket higher into mid-2022. The sheer volume of high-to-record auction prices for used equipment in good condition has been nothing short of amazing.
LET’S TALK TRACTORS
One interesting segment is mid-to-high-horsepower tractors. One example is John Deere’s 8235R model. I’ve seen 215 sold at auction in the past 11 years. Check out these eye-opening 8235R facts:
- The five highest auction prices were all set in the past 16 months.
- The average auction price, $147,441, is up 54% from three years ago ($95,518).
- The average auction price is the highest in nine years.
The 8235R is not an isolated example. Three of four of the highest auction prices ever on Case IH Magnum 290 tractors have come in the past eight months.
Of course, strong farm income pushed used values higher, but a bigger factor has been the historic tightness on dealer’s used lots. Only 23 John Deere 8235Rs were for sale around the country in mid-July.
This tightness in the used tractor market has spawned a pair of interesting trends:
- Since last November dealers have hit the auction market as aggressive buyers.
- Since late 2021 farmers have begun to buy good used tractors as a hedge.
Since last fall, dicey parts availability has spooked folks. The supply chain is still in shambles and possibly even getting worse, so equipment prices continue to rise.
These factors, plus your local dealers not having backup machines around in case you break down, have worked together to foster blisteringly aggressive auction bids.
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