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Deere's horses running up bids

GREG PETERSON 01/07/2011 @ 2:41pm Greg Peterson writes "Machinery Pete" column for Successful Farming magazine and appears on the Machinery Show on RFD-TV, talking about trends in the used equipment market

Is it possible for the value of a 20-year-old tractor model to climb over 35% in just the last four years?

Just check out the data table on the next page showing average auction sale price data on Deere tractor models over the last four years. See how 4455s, made by John Deere from 1989 to 1992, have appreciated 35.2% since 2006? Amazing, but true.

This information is serious stuff if you’ll be buying, selling, or trading used tractors in 2010. Even if you’re not in the market, you still should keep tabs on what those used tractors are worth sitting out in your machine shed. We’re talking your net worth here.

Of all this auction sale price data that I compile, I have always found it most interesting to take a piece of equipment, see what it’s worth, then compare the machinery to the next model series, and the next, and the next. You get the idea.

My goal is to see how much more the newer model series are worth. Or conversely, to see how much less older models are worth.

Examining Workhorse Deeres

For this study, I pulled together data on John Deere tractors in the 140-hp. to 155-hp. range (see chart on the next page). The average auction sale price data shows the newest model first, John Deere 7820s (which were made from 2004 to 2006) and works all the way back to model 4450s, manufactured from 1983 to 1988. See for yourself how much newer models are worth and how much less older tractor models sell for in this comparison.

Notice that the year 2008 appears to be the high-water mark for values on these used tractors. The same holds true when you look at the data on most other used farm equipment. The year 2008 was the top of the mountain. Yes, values have slipped a bit in 2009. Still, compare that to values from three years ago, back in 2006. Current values are still way up.

If you’ve followed my commentary over the years, you know I don’t like to hang my hat solely on averages or generalizations. I prefer specifics. So I present to you a data table with 2009 auction sale prices on these John Deere tractor models, working from the oldest 4450s down to the newest 7820s (see chart on opening page).

I have highlighted the eye-popping prices on various models. The record-high auction price on 4450s is $48,000; $69,000 was the new record-high sale price on 4455s. That record lasted all of seven months until a 1991 Model 4455 with 1,423 hours (and a Deere 280 loader) sold for $94,500 in south-central South Dakota in October 2009. The bids $80,000 (no loader) and $81,000 are at the top of anything I’ve seen 7800s sell for at auction during the last 13 years.

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