Machinery Pete: Equipment Market Focuses on Availability
In 1973 I wasn’t compiling auction sale price data — I was 7 years old, but I do recall folks talking about trying to buy a new tractor back then.
You literally had to take a number and get in line to buy one. There were not enough to go around.
In my three decades of tracking auction sale price data, there have been three time periods that stood out as the hottest periods I’ve seen:
- Mid-November 2007 into early 2008 (ethanol-fueled demand push).
- December 2012 to March 2013 (This period was the highest I’ve ever seen the equipment market and prices).
- Now (November 2020 to early February 2021).
The current farm equipment market is all about availability. Last spring, equipment manufacturers tightened production outlooks due to the pandemic. They needed to be conservative given the jolt to the food distribution chain and the unseen road ahead.
Then we added the runup in commodity prices that started in late 2020.
Here We Are
More farmers want new and used equipment, but less of it is available. So just as in late 2007 into early 2008, auction prices on good condition used equipment have shot higher.
To prove my point, check out these recent eye-opening prices on 200+ horsepower tractors:
- 2013 John Deere 8235R; 44.1 hours; $177,500; sold on Feb. 9 at a farm auction in northwest Indiana; a record price, topping the prior high of $172,000 exactly eight years ago.
- 1993 John Deere 4960; 2,499 hours; $93,250; sold at the same Feb. 9 farm auction in northwest Indiana; highest auction price on 4960 in eight years.
- 2013 Case IH Magnum 235; 506 hours; $140,500; sold on Nov. 14, 2020, at a farm auction in northwest Iowa; a record price.
- 2009 AGCO DT275B; 1,441 hours; $114,000; sold on Nov. 27, 2020, at a farm auction in north-central Ohio; a record price (previous record was $90,300 from four years ago).
- 1998 John Deere 8400; 4,033 hours; $100,000; sold on Feb. 8 at a farm auction in west-central Iowa; tied as highest auction price on an 8400 in nine years.
- 2012 Massey Ferguson 7624; 1,701 hours; $99,500; highest auction price in five and a half years.
What do these prices tell you? It’s a great time to be a seller.
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