The farm equipment market is crazy, especially these 2021 used tractors values. Stories of empty dealer lots and long lead times for new equipment abound. Used equipment supply is also tight. This has been causing prices to soar, but not equally across all categories. This is especially true in 2021 for tractors and combines, which we broke down in our post last month. In this Tractor Zoom analysis we lift up the hood on a couple different tractor horsepower categories. Continue reading to see how the demand has been affecting the auction values.
We start our analysis with smaller farm tractors ranging between 40 to 99 horsepower. This utility tractor may not be the strongest on the farm, but it typically gets the grunt work done. In resale values, this category gets to flex it’s muscle with the strongest year over year auction value increase of any other horsepower tractor category. Data summarized below includes 40-99 HP tractors sold at auction for greater than $1K. June ’21 average sale price was over $12K. This is 45% above June ’20, and almost 100% higher than June ’19.
When looking at 2021 used tractor values, you cannot ignore the highly sought-after row crop tractor. Front wheel drive tractors sold at auction with more than 175 HP comprise this category. In a break from the smaller tractor trend, used row crop tractor average auction values are closer to flat year over year. The exception to this trend was seen in February when a number of low-hour machines were brought to market. This scenario is a great depiction of how desirable row crop tractors with few hours actually are. In January the average machine hours were 5K, followed by only 3.6K in February, and then back to 5.6K in March. The corresponding average auction values for those three months were $80K, $120K, then $83K.
The significant trend that the average prices or hours do not show is the shrinking supply of low-hour engines. Tractor Zoom is continually adding new auction partners to our community. This historically has almost always resulted in a growing database of equipment from month to month. Tractor Zoom’s coverage of the US ag auction market continues to expand, currently covering over 70% of all US farm auctions. Yet, for the first time ever, our monthly supply of row crop tractors has been lower year over year for two consecutive months.
Used tractor values still have time to surprise us in 2021. The biggest indicators will likely fall in August and December. If farmers need a new tractor for harvest, they will pay top dollar. At almost $6 corn, you cannot risk leaving that crop in the field. In December most farmers will likely have more revenue from grain than they’ve had in some time. Purchasing new equipment will help offset some of this newly found cash. Perhaps even paying a bit more for that low-hour tractor at auction? If you are interested in gaining access to fast and accurate used equipment values, reach out here and we’ll be happy to jump on a call.