From land values to equipment values, prices soared in 2021. As equipment manufacturers had issues sourcing all the components to build new tractors, that placed even higher demand on the used market. And with the outlook for higher net farm income in the U.S., that meant used equipment values soared.
Greg Peterson, who is known as Machinery Pete, says if there’s one thing 2021 taught him, it’s how lower supply and higher demand can come together to create an explosive equipment market.
“What have I learned in 2021? I’ve learned it’s the hottest use tractor market I’ve ever seen. And frankly, it’s not even close,” Peterson said on U.S. Farm Report.
Supply and Demand
Peterson says there are certain trends that aided the aided used equipment market values, including the trends in supplies.
“So farm equipment dealer used lots across the country, I have never seen them as tight as they are right now,” says Peterson. “We’re just not used to that. But it’s really having an effect.”
The other change of note revolves around geography. According to Peterson, the move to have more auctions online is another factor aiding prices.
“It used to really matter where a piece of equipment or a tractor sold and it just doesn’t right now,” says Peterson. “If it’s in good condition, it doesn’t matter if it’s east, west, north or south, it’s bringing more money.”
Record Sales
Peterson says it’s not just the equipment with lower hours bringing in record auction values. He says even the later model equipment models with higher hours are also in high demand for buyers.
“Now, here’s a couple of examples from our December 2021 Machinery Pete monthly online auction to show that. A 2014 John Deere 8360R with 6,179 hours on it from the state of Washington sold for $138,750. Now folks, that’s the highest auction price ever on an 8360 with over 5100 hours. And again, this one had over 6,100 and on our auction.”
He says another auction item that was mind-blowing included the sale of a 2015 John Deere 6190R with 1,965 hours. That tractor was from the state of Arkansas sold for $133,000.
“That was an all-time record high auction price on a 6190R and again, it was from Arkansas,” says Peterson.
Peterson says the biggest question he’s getting right now is, “When is the other shoe going to drop?” in terms of equipment values. He gives insight into what his outlook is for 2021 here.
