Let’s talk truths in the used tractor market.
1.) The overall supply of used tractors finally began to rise in the second half of this year.
2.) Despite rising supply, used tractor prices are still exceedingly strong.
3.) The value of pre-DEF, pre-Tier IV tractors in good condition is skyrocketing.
Between 2012 and 2016, there was movement toward pre-DEF buyer preferences, but the past few years have been more like a growing tidal wave.
Three recent farm auctions in Kentucky, Missouri and Iowa provide perfect examples.
At the end of October, I was in Winchester, Ky. It was the hottest auction I’ve ever seen with 15 new record high sale prices set. The crowd was like the pre-internet auction days.
A John Deere 4455 2WD with 3,549 hours sold for a record $97,850, while a 1993 John Deere 4960 with 3,637 hours set went for $139,360 — a whopping $25,360 over the prior record from nearly 11 years ago.
The buyer of the 4455, Tim Knutzen from Burlington, Wash., told me, “Machinery Pete, I came here to do two things. Buy the 4455 and have you sign it.” He bought it. I signed it.
While at the auction, he also bought a John Deere 6400 MFWD tractor with 1,500 hours and Deere 640 loader for $81,885 — a record price by an astounding $32,385.
Just under two weeks later at the Phil Kelly farm estate auction in Harrisonville, Mo., a 2002 John Deere 7410 MFWD with 1,612 hours and loader sold for $139,000, breaking the previous record by $34,500.
The next day, an auction in Orange City, Iowa saw a 1991 John Deere 4755 2WD with 5,072 hours and one owner sell for $82,000 — a new high by $11,750. The four highest sale prices ever on this model were all during the past eight months.
A Logical Trend
It’s clear pre-DEF, used tractors have become increasingly popular. There’s less to go wrong on them, they won’t throw a code, and you can wrench on them. They’re bulletproof so to speak. And what’s the price for a new one, after all?
That brings us to the fourth and final truth of the used tractor market: the ever-rising price of new equipment pushes buyers to good condition 10-year-old models.
I’ve referred to this magical 10-year-old line in the sand for years, but now those tractors aren’t pre-DEF. Our auction price data shows that doesn’t matter.
While the John Deere 4455 and 4960 record prices were eye openers, the hottest tractor on that Kentucky sale was a John Deere 6150M 2WD with only 763 hours and no loader. It sold for a record $154,500 to Tim Knutzen from Washington (he didn’t have me sign it though).
