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Machinery Pete: Rising values on 150-horsepower tractors

"Hey Pete, how are things selling?"

Every day, whether on the phone in the office, responding to e-mails, or when I'm out on the road covering machinery auctions around the country, folks ask me this same question. Inquiring minds want to know.

My answer has been the same the last 4 years, "things are selling very well, prices are up." But just my saying it never does it justice. I always want to show folks exactly what I'm talking about, that over the last four years used farm equipment values are indeed up. I like to provide hard proof and let the sale price data tell the tale.

So I'm going to do this today. I'm going to show you hard evidence of how used equipment values have gone up. Ok, now what examples should I show you? Hmm, we track sale price data on over 70 different categories of farm equipment, so lots of different directions I go here. AUGER values have been zooming higher. Same with GRAIN CARTS and GRAIN TRAILERS for sure. With the late, wet harvest last year values on used tillage items like DISKS and DISK CHISELS have been going through the roof.

But I think I'll stick to TRACTORS today, the universal category most everyone is interested in. Let's narrow it down and just focus on tractors in the 150 horsepower range. What I'll do is show you auction sale prices from now vs. five years ago, back in the year 2005.

The comparison just might knock your socks off.

Let's start with JD 7810s. Deere made 7810s from 1997-2003, so we're talking 7-13 year old tractors as we sit here today. First I'll show you what the nicest 7810s were selling for at auction back in 2005. Here you go:

See how the highest auction sale price on a JD 7810 tractor back in 2005 was $78,000? Now look closer. See the last 7810 in the table above? Yes it sold for $78,000, but it was a 2003 model making it only two years old at the time, had mechanical front-wheel drive and sold with a JD 741 loader.

Now compare that to the 2000 model 7810, 2-wheel drive, with 840 hours, no loader, sold last month on a sale in east-central Iowa for $76,000. So this 7810 had no mechanical front-wheel drive, no loader and was 10 years old, yet sold for almost the same money.

See what I'm talking about now when I say used equipment values are up?

Here's more proof, a list of the nicest JD 7810s sold at auction the last couple years:

Look at all those sale prices I've highlighted, all at or above what the nicest JD 7810s were selling for at auction back in 2005. Older, but selling for more money. Proof of what I'm talking about when I say used values have been going up.

Let's move on to other older model Deere tractors in this 150 horsepower range. JD 7800s were made from 1993-96. Let's do the same then vs. now comparison:

JD 4455s? Wow. Back in 2005 the highest auction sale price I saw all year on a 4455 was $49,000. Last Saturday (March 20th) on a consignment sale in southeast Iowa, I shot video of a 1991 model 4455 mechanical front-wheel drive with 6,450 hours, very nice but no spring chicken, selling for $46,000.

You may recall the 4455 I wrote about last October? No, don't remember? I'll refresh your memory. A 1991 4455 mechanical front-wheel drive with 1,423 hours (1 owner, immaculate condition) sold with a JD 280 loader for $94,500. Yep, $94,500. There was also the 1991 4455 with 5,456 hours, mechanical front-wheel drive sold in March 2009 on a sale in east-central North Dakota for $69,000.

More proof, used values have been going up.

Same with red tractors in this 150 horsepower range. Case IH made 7120s from 1987-83. The highest auction price I saw on Case IH 7120s back in 2005? $44,500 for the 1988 7120, mechanical front, with 1,967 1-owner hours, sold in east-central Illinois. Now compare to a few of the nicest 7120s I've seen sold the last couple years:

Same trend, older but worth more.

Exactly the same thing I see with Case IH 7220s:

I guess the lesson here is that used farm equipment values aren't static, they fluctuate up and down. Yes, they can go down friends. I've seen it happen before. Used values were way up back in 1996 and 1997, then fell pretty hard from 1998 through 2001.

Will they fall again after the run up here the last couple years?

Factors working hard against a drop in the value of good condition used equipment currently are the ever rising price of new equipment, controlled production of new equipment and also the scarcity of machinery auctions.

What will used farm equipment values look like five years from now in 2015? Check back with me on that one. I'll break out the sale price data and we'll have a look.

"Hey Pete, how are things selling?"

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