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200-hp. tractor trends

GREG PETERSON 03/20/2012 @ 2:59pm 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

The first camera I ever used was a Polaroid. Snap the shot, out comes the picture, wave it around a bit, wait a few seconds, and presto – instant photo.

Today's kids shoot zillions of pictures on their iPhones and upload them to Facebook. Poor saps, they'll never know the thrill of a Polaroid developing right in their hands.

I feel like I've been peeling off Polaroids for 22 years, turning out snapshots of the used equipment market day by day since 1989 with my auction sale price data.

What's a 10-year-old tractor with 5,000 hours worth? How much can a 30-foot disk with badly worn blades bring? What's a fair price for an old forage chopper with two heads? Put them up for sale and see what they go for.

When auctioneers around the U.S. and Canada shout “Sold!” that's when you know for sure what the thing is worth. It's an instant snapshot from one particular time and place.

A snapshot of values

If you were to compare snapshots on what very nice used 200-hp. tractors have been selling for at auction, you'd notice a distinct pattern. Values were going up, up, up in 2011.

Check out the table at the left showing bids compiled over the past 12 months. Record-high auction prices are highlighted in red.

Notice how four of the new record-high prices came in late 2011, from October to December. Think maybe a little bit of year-end tax write-off motivation was at work?

Three of the other sale prices listed in the table were record highs for a while at least, until they were passed up.

The 1989 Case IH 7140 with 3,996 hours that sold for $61,500 on the auction in north-central Illinois in January 2011 held the record for nine months. Then a 1992 Model 7140 with 3,315 hours brought $64,000 on a farm sale in southeast Minnesota.

Nine months is an eternity compared to the shuffling deck at the top of the heap of sale prices on Deere 4960 tractors. The $83,500 bid was a new high price reached at an auction in south-central Minnesota, only to be eclipsed by $86,000 on a November 11, 2011, auction in northwest Ohio. That record didn't even stand for a day, when a 1993 Model 4960 with 3,425 hours went for $87,000 in west-central Ohio.

AGCO high-horsepower bids

Ever-rising prices make it challenging to have a handle on what that tractor you're looking to buy, sell, trade, or appraise is worth.

Take a look at the AGCO DT200A tractor listed on the first line of the table. It had 1,722 hours and sold for $90,000. A quick check in my www.machinerypete.com auction results database turned up another 2008 AGCO DT200A tractor, which sold back on July 22, 2010, on an auction in North Dakota. That DT200A only had 390 hours. So 1,332 fewer hours sold for the exact same money: $90,000. That's more proof of how used values have gone way up in 2011.

John Deere Model 8400 tractors are another good example of rising values. The 1997 Model 8400 with only 709 hours sold for $104,000. That is the highest auction sale price I've ever seen in the U.S. on an 8400. The other 8400 listed, the 1998 model with 6,555 hours, sold for $90,000. From 2000 to 2008, I only saw two 8400 models sell at auction for $90,000 or more. But since 2009, nine have sold that high.

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