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4WDs Have Reached Their Price Bottom

The consensus among dealers and auctioneers is that a solid bottom has been reached in the recent downward decline in late-model machinery values. Much like commodity prices, the value of large equipment such as combines, high-horsepower front-wheel-drive tractors, tillage implements, and grain carts has been established and will likely hold at current levels for this year and into 2018.

“This is the new normal,” says Tim Meyer of Steffes Auctioneers. “Everything is a bargain compared with a couple of years ago. But that was then. Today’s prices are the new normal, where horsepower is as cheap as it has been for well over a decade.”

The poster child of this new normal is the four-wheel-drive (4WD) tractor. Durable to a fault, 4WDs often don’t rack up as many hours as high-powered front-wheel-drive tractors. Struggling with depressed grain prices, farmers have held back replacing their 4WD workhorses since 2014.

“Relative to age, four-wheel drives often don’t carry as many hours as high-horsepower front-wheel drives,” says Rick Vacha of Ritchie Bros. Auctioneers (rbauctions.com). “Right now, the marketplace is loaded with a lot of low-hour four-wheel drives being sold at very favorable prices.”

late-model 4wd inventories are healthy 

That fact is born out by this issue’s Pocket Price Guide. This listing, based on current dealer inventories, focuses just on 2012 and 2013 models in the 525-hp. to 560-hp. range. John Deere’s used equipment site, machinefinder.com, alone listed 113 4WDs fitting this description at press time, testifying to their abundance.  

Extending the horsepower range to include all 2012 and 2013 model year 4WDs, machinefinder.com reports 334 such machines on dealers’ lots. Open up that search to include all used 2012 and newer 4WDs, and that number jumps to 807 machines.

Little wonder that 48% of dealers feel their used equipment inventories are too high, according to a recent Association of Equipment Manufacturers survey.

“The thing is, we are not selling nearly as many new four-wheel drives these days,” notes Steffes’ Meyer. In fact, sales of new four-wheel drives in 2016 were just over 2,300 units. This represents a 23% decline in sales compared with 2015, when sales were far less than 2014.

This sets up a situation where there will be far fewer late-model 4WDs on the used market in the future. That could certainly incite a price run-up on late-model 4WDs similar to the one agriculture experienced with combines in 2009 and 2010. “That could well mean that the used four-wheel drive you buy today could be worth as much, if not more, in several years,” Meyers speculates.  

there is change in the wind 

Already, the marketplace is seeing a rebound in 4WD in regard to 20-some-year-old machines such as the pair of Deere 8970s. This group of tractors has seen a solid 15% increase in auction bids or dealer asking prices, according to a Successful Farming magazine price trend analysis. That trend is certain to continue into 2018, as farmers seek out cheaper horsepower for primary tillage chores. 

prices begin to rebound on 4WDS Two decades old 

With Tim Meyer calling the sale, two Deere 8970s sold at a recent Steffes event.

The first tractor, a 1995 model with 7,426 hours and a three-point hitch, brought $39,000. The second 8970, a 1994 model with 10,720 hours and a PTO, sold for $31,000. Otherwise, they were equipped the same, including Michelin 710/70R38 duals that were rated new. 

The difference in hours impacted these tractors’ final prices. Meyer says bids for this age of tractor are on the increase.

“They offer an opportunity to buy a lot of horsepower at a price a banker finds affordable,” he says. “I expect values for this age of four-wheel drive will continue to increase this winter.”

The condition of such tractors’ tires (you can invest $15,000 or more on new rubber) and whether they’re equipped with a PTO or a three-point hitch will have a huge influence on their values.

Below are dealer and auction prices for 70 series Deere 4WDs.

  • Model 8570
    • Dealer average: $39,800
    • Dealer range: $29,500-$49,950
    • Auction average: $28,500
    • Auction range: $11,900-$39,000
  • Model 8770
    • Dealer average: $41,100
    • Dealer range: $32,900-$52,900
    • Auction average: $27,500
    • Auction range: $19,500-$57,500
  • Model 8870
    • Dealer average: $51,700
    • Dealer range: $36,750-$79,500
    • Auction average: $28,500
    • Auction range: $18,500-$47,700
  • Model 8970
    • Dealer average: $51,400
    • Dealer range: $36,500-$68,500
    • Auction average: $24,900
    • Auction range: $15,200-$43,410
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