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New prices on 10-year-old tractors
Used tractors in very good condition are really holding their value.
More proof of this fact arrived this past week. Last Saturday (Feb. 26th) on a farm retirement auction in east-central Iowa, I shot video of a 2001 CaseIH MX200 MFWD with 1,904 hours selling for $81,000. After the sale, auctioneer Tim Markham told me the owners, Ken & Diane Hannan, kept very good financial records over the years.
They paid exactly $81,000 for that MX200 brand new back in 2001.
Also on last Saturday's auction in Holy Cross, IA was an IHC 856 tractor in original condition with 9,300 hours. Ken paid just north of $6,000 for this tractor back in 1984 when he bought it. It sold Saturday for $9,000. The Hannons had a pair of nice IHC 1086's on their auction too. A 1981 1086 with only 3,640 hours sold for $18,500 and the 1979 model with 8,000 hours went for $14,500.
Tuesday (March 1st) on a farm auction in south-central Nebraska by Stock Auction Co. a 1982 JD 4440 with 5,719 hours sold for $35,500. Wow. That's the 26th JD 4440 I've seen sell over $30,000 in the last five years. From 2000 - 2005 when there were basically twice as many auctions, how many 4440's did I see sell for $30,000 or more?
Yesterday I did a radio interview with a farm network from Ohio. Heather asked me: "Pete, why do you think we're seeing these rising sale prices on used tractors?"
Well, farm income is up, that's true, but two other huge driving forces are at work. One is availability. Just plain difficult to find very nice condition, low hour used tractors for sale, whether at auction, for sale privately, or on dealer lots. This is true whichever direction I look. Just yesterday I spoke with a dealer in north Texas, here's what he told me, "I could sell a wad of 750 hour or less tractors if I could get my hands on them."
The other huge driving force with rising used values on tractors? The price of new ones.