No matter what word you use — hot, unique, challenging, historic — the machinery market is idling in a field unlike anything the industry has seen for decades.
“Today’s machinery market is so hot, this is only the fourth time ever in my 32 years of tracking used equipment values I’ve come out with a strong advisory statement,” explains Greg Peterson, founder of Machinery Pete. “If you have used equipment in good condition, there may never be a better time to sell.”
A multitude of supply and demand reasons are behind the surge:
- Strong commodity prices.
- Low interest rates on loans.
- Pent-up demand from several years of tight margins.
- Stifled production of new equipment due to supply chain issues, worker shortages or component availability.
“The trend we’ve been seeing for the last 18 months appears to be strong and appears to be real,” says Curt Blades, senior vice president of ag services for the Association of Equipment Manufacturers (AEM).
In the U.S., ag machinery sales have jumped 12% this year, per AEM. That increase has been driven by smaller tractor sales to landowners working on pandemic projects. Lasting impacts from COVID-19 will wane, but if corn prices stay high, machinery prices will likely to follow, Blades says.
“There is an almost one-to-one correlation between the price of corn and the number of tractor units sold over 40 hp,” he explains. “We know agriculture is cyclical in nature, and positive momentum can sustain for a while. But history shows markets will change.” -Clinton Griffiths
Here are a few examples from Machinery Pete illustrating why 2021 is the hottest used farm equipment market in history.
1. Hottest Line Of Tractors Ever Sold At Auction
On July 8, 2021, we filmed “Machinery Pete TV” at a farm retirement auction in Sleepy Eye, Minn. Look at these results:
- 2003 John Deere 8420, 1,760 hours. SOLD: $167,000. Record by $10,000. Prior record was eight-plus years ago.
- 2009 John Deere 7430, 933 hours. SOLD: $139,000. No loader. Second-highest auction price on a 7430. The record came a month earlier on June 7 at a Floyd, Iowa, auction, when a 2010 model (345 hours, loader) sold for $156,450.
- 2009 John Deere 6430, 988 hours. SOLD: $114,000. Loader. Record price by $15,250.
- 1978 John Deere 4640, 8,122 hours. SOLD: $35,250. The average price on 4640s ($20,136) is up 45% this year.
- 2009 John Deere 5095M, 139 hours. SOLD: $58,500. Record price by $9,500.
Click here to watch video from this auction.
2. The Changing Reality On Dealer Lots
Over the past 40 years we’ve become conditioned to farm equipment dealers constantly battling excess used inventory, particularly on late-model, big ticket items. That wasn’t the case in 2021. We’ve seen shortages of good used inventory. Dealers are buying at auction to have inventory to sell. One well-known central U.S. used dealer/online auctioneer said historically they move 50% of used machinery at retail and 50% at auction. In 2021, it was 85% at retail.
Search 100,000-Plus Equipment Listings at MachineryPete.com
3. Rising Tide: Record Prices for Tractors, Combines, Planters, Grain Carts
I’ve been tracking auction price data for 32 years now. It used to be rare I’d see record-high auction prices for multiple equipment categories (tractors, planters, etc.). That became commonplace in 2021. Here are a few examples:
Tractor: 2019 John Deere 9570RX, 1,075 hours. SOLD: $415,000. Auction on March 29 in Larchwood, Iowa.
Combine: 2019 John Deere S780, 524 engine hours. SOLD: $411,000. Auction on Aug. 3 in London, Ohio.
Planter: 2018 John Deere DB60 24R-30, 4,354 acres. SOLD: $255,000. Auction on March 29 in Iroquois, S.D.
Grain Cart: 2020 Brent 1596 on 42" tracks. SOLD: $125,000. Auction on June 18 in Compton, Ill.
Here’s a link to more than 2,000 tractors that have sold in 2021.
4. Have A Nice Used Grain Trailer To Sell? Merry Christmas
There is incredibly hot buyer demand for good used grain trailers. Can you even get the new one you had hoped to order? Oh, you got one ordered … cool. Will it arrive by harvest 2022? What was that new price increase? Ouch. All of this has made good used grain trailers like gold.
Here’s an example from an Oct. 7 consignment auction in Michigan:
- A pair of 2013 Wilson 42' grain trailers SOLD: $47,500 & $46,500.
Here’s a link to grain trailers for sale on MachineryPete.com
5. Crazy Hot: Older 4wd Tractors In Nice Shape
Chew on these auction prices:
- A pair of mid-1980s Steiger KP-525 Tiger IVs BOTH SOLD: $139,000. Auction on Sept. 30 in Adams, Minn. Record price for any Steiger sold at auction. Buyer took both.
- 1984 Versatile 1150, SOLD: $126,000. Auction on July 7 in Lambert, Mont. This set a new record by miles.
- 2007 John Deere 9620 with 1,255 hours. SOLD: $270,000. Auction on March 22 in Sibley, Iowa. Record price by $75,000.
- 1980 International 4386 with 798 hours, SOLD: $43,500. Consignment auction on Oct. 7 in Michigan. This set a new record, which was previously from auction on Aug. 20, 2013.
Link to Machinery Pete YouTube video of them selling
6. Dynamic Shift for Used Combines
Values for combines, 4-to-9 years old are rising. Could you have imagined me saying that two, three, five or 10 years ago? Ever? Nope. But it’s the truth now.
For example, the average auction price on John Deere S670s ($126,127) was up 11% through early October.
Check out 2012 to 2019 model year combines for sale on MachineryPete.com
Machinery Pete’s Final Take
Yes indeed, 2021 has been the wildest year I’ve ever seen in the used farm equipment market. Oh, one more thing — it’s going to get hotter in these final weeks of 2021. Guaranteed.
New Equipment Demand Soars
In 2021, AEM reports ag equipment sales have reached their highest point since around 2012. Here is how sales of various equipment categories have changed from Q2 2020 to Q2 2021:
- Trailers and Transportation Equipment: +20%
- Components: +18%
- Equipment for Working Soil, Seeding, Fertilizing and Protecting Plants: +18%
- Loaders and Material Handlers: +13%
- Tractors: +13%
- Harvesting Equipment: +13%
- Lawn and Garden Equipment: +13%
- Irrigation and Sprayers: +8%
- Livestock Equipment: +8%
Greg Peterson, founder of Machinery Pete, the most trusted name in farm equipment.
