Machinery Pete: High Horsepower, High InterestJanuary 04, 2017
In November, search traffic for 175 hp tractors rose 35.4% compared to the previous month at machinerypete.com.. I also saw strong auction sale pricing around the same time on used good-condition tractors with high horsepower.
I love this new search-traffic data and how it correlates to auction sale price data on all types of used equipment. I found the 35.4% jump in search traffic to large horsepower used tractors in November interesting as, generally speaking, I was also seeing very strong auction sale pricing on good-condition used large horsepower tractors during a very busy November into the first week of December.
A couple of examples jump to mind. First is the 1998 model John Deere 8300 with 2,812 hours that sold for $85,000 on Nov. 19 at a nice farm auction in east-central Nebraska. Bidders are seeking to acquire the very nicest large, low-hour used tractors.
The chart below provides some of the highest auction sale prices I’ve seen in the past five years on John Deere 8300 tractors with 222 hp.
Condition Linchpin. Over the past 18 months, I have seen values fall on used tractors in average or fair condition, which is illustrated in decreasing average prices. The average auction price on John Deere 8300s in 2016 is $44,522, down 10.5% from 2015’s average of $49,732. Two years ago, 8300s sold for an average of $56,640 at auction. Yet buyers are paying a premium for nice equipment. The trend particularly rang true in late 2016. If I were having a farm-retirement auction, I’d have it in November or very early December to get ahead of the crush of machinery auctions in March and April.
A couple of recent auction prices illustrate my point about used large-horsepower tractors:
- On Dec. 3 at a farm auction in east-central Michigan, a 2002 Case IH STX450 Quadtrac with 4,880 hours sold for $125,000. That’s the second-highest auction price on an STX450 Quadtrac in three and a half years. The highest auction sale price, on a 2003 model, was $160,000, a figure achieved July 21 at a consignment auction in northeast North Dakota. The latter was one year newer and had 1,836 hours.
- Another example is the 2012 John Deere 9510R 4WD tractor with 136 hours that sold Nov. 29 for $247,500 at an absolute dealer auction in southeast Minnesota. That’s the highest 9510R auction price in the past 22 months in the U.S.
Financial Tips. If you want to buy a large-horsepower used tractor, contact your dealer. They have access to a growing selection of off-lease late-model tractors. If you are looking for equipment at auction, sale prices typically weaken by the second week of March. Patience could be a money-saving virtue.
If you’re looking for a tractor, check machinerypete.com. You’ll find more than 20,000 tractors for sale from dealers across the country. You can also click on our “Auction Calendar” section. It features a list of upcoming machinery auctions all over, and it allows you to search by make and model. It’s like finding a needle in a haystack! The site is updated daily, so keep checking back.