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High-priced 2WD tractors

GREG PETERSON 02/16/2012 @ 10:47am 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

Bigger isn't always better. But it sure seems like everything has been getting bigger and bigger over the last 10 to 20 years though, doesn't it?

You've certainly seen the push for bigger farm equipment. Planters, combines, sprayers, and tractor just keep getting larger and more powerful. So it stands to reason that smaller, older equipment must really be losing value quickly with the never-ending push to modernize and to get bigger faster, right?

Wrong.

In fact, what I've been seeing the last four years is the exact opposite. Older, smaller used iron in good condition has actually shot up in value, oftentimes faster, higher, and more pronounced than the rise in value on larger used equipment.

Some examples

Take used tractors with an option for front-wheel assist or two-wheel drive, for example. You'd think more buying heat would be on the more powerful front-wheel assist models. Not necessarily. Check out the table.

● The 1991 Case IH 7110 two-wheel drive with 1,477 hours sold in southeast Minnesota for $57,000. That is a new record high auction price I've seen on a 7110, two-wheel drive or front-wheel assist. The former record high price was $43,000 in November 1996.

● The Deere 4055 two-wheel drive with 2,462 hours sold on an auction in south-central Pennsylvania for $46,000. That is a new record high auction price; the former high sale price was $45,000 set back in 1996.

● The 1988 Deere 4650 two-wheel drive with 3,800 hours sold in south-central Minnesota for $51,000. Of the 271 similar tractors I've seen sold over the last 15 years, $51,000 is the second highest auction sale price I've run across, the highest since the year 1997.

Higher prices for smaller machines

This trend of rapidly rising bids on smaller two-wheel drive used tractors started back in late 2007. You can see the starting point in the table with the 1995 Case IH 7220 with 1,830 hours that sold for a record high price of $70,000 in east-central Illinois.

Of course, rising incomes have played a huge part in the escalating values on all types of used equipment. But there are other forces at work.

High-Price Bid on Video

Want to see video of some of these tractors as they sold at auction? Machinery Pete has Youtube video of the Case IH 2594 that sold for $33,000 (record price) on the sale in northeast Nebraska as well as the 1992 Deere 4255 with 1,830 hours sold for $72,000 on an Iowa sale. To catch the action, go to www.youtube.com/user/machinerypete for Pete's list of auction videos.




A farmer who called me in November nailed it. He relayed how he'd been looking for a very nice, smaller class used combine. He wondered if manufacturers should consider producing certain types of smaller new equipment again such as combines. He'd be a buyer.


But again, the push continues for bigger and bigger machines. What can get lost in that view is the significant market segment of farmers with smaller-size operations. They may have smaller farms, but they are in very good financial shape, and they are looking to buy equipment. 

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chris sandler Great post 02/24/2012 @ 1:02pm Thanks for the continuous insight Greg!

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