Utility tractors have seen some of the biggest increases in auction values this past year and their usage is ubiquitous across the varied terrain of the US. In this post we will investigate how these utility tractor values differ depending on the region. Location may not be the top determinant of equipment values, but it does matter. This was a follow-up question from our last webinar. “How does this [analysis] apply to my dealership in the mountain west?” We answered that question in a video post here. This week’s webinar will broaden the scope to also look at how row crop tractors and the John Deere S670 is valued differently across states.
The flat, open land of the grain belt naturally sets a ceiling for most ag equipment used in corn, soybean and wheat geographies. Larger tractors, combines, and other grain equipment will typically bring higher values with a substantially higher volume sold. The graph below depicts the region average price difference of utility tractors (100 – 174 HP) sold in 2019 and 2020. This analysis utilized Iron Comp’s filtering options to arrive at two comparable data sets. Below are tractors with less than 5,000 hours, and sold at auction for more than $10,000 between January and August.
What we see first are the value peaks representing the Midwest. All other regions’ were 14% lower than the Midwest in 2020 and 23% lower in 2021. This increased discrepancy is not surprising when you consider what is driving the demand in the Midwest. The 2020 and 2021 bullish grain market.
So how much have regional utility tractor rates increased from early 2020 to 2021? You could break out the calculator with the graph figures above, or you can let us do the math below.
Similar to the demand logic about the Midwest, other regions with high demand of utility tractors should also see higher year over year increases. The Northeast’s heavy use of utility tractors in dairy country are a good example. The New England region has a 38% year over year increase in value.
In this data set there were fewer comparables from the Rockies and Pacific states with the applied month and sale price filters. When this happens the average should receive less weight in your valuation model. A more direct look at comparables may be more beneficial. Iron Comps has recently added in a search by state function. Check out the Auction Results screenshot below. This allows for faster sorting and locating of the best comps.
If you are interested in learning more about how utility tractor values differ by region (and combine and row crop tractors too!), tune into the webinar tomorrow!