Machinery Pete’s 7 Equipment Market Predictions For 2023January 31, 2023
If you follow my reporting, you know predictions don’t tend to be in my stoic Norwegian data guy DNA. But New Year’s resolutions are about pushing our personal boundaries. I’m game, so here it goes.
1. Mid- to high-horsepower used tractor values will start 2023 at and stay at all-time highs. Last November and December were nuts, with crazy auction prices for these models everywhere.
Consider the pair of John Deere 9620RX tractors that sold Dec. 16, 2022, in Carthage, Ill. The 2020 model with 571 hours and extended warranty sold for $610,000, and the 2019 model with 550 hours and a similar warranty went for $600,000. These were the first two tractors ever to crack the $600,000 mark at auction.
Also, six of the seven tractors to top $500,000 were sold from mid-November to December. That includes a 2022 Case IH Steiger 540 Quadtrac with nine hours that sold for $582,000 at a Dec. 8, 2022, online farm auction in Imperial, Neb.
Pre-DEF, pre-Tier IV tractor prices were even hotter. For example, a one-owner 1994 Case 7210 with only 382 hours sold for $150,000 at a Dec. 16, 2022, auction in Brillion, Wis. That was a mere $83,000 over the previous record price.
2. Values for under 100 hp tractors will soften. The buying pool of hobby farmers is pulling back, driven by inflation forces and increased worries about job losses. Of course, the other huge factor is a large supply of both new and used tractors under 100 hp.
3. Late-model, used combine values will soften. I started to see this trend the last three weeks of December, when everything sold sky high at farm auctions — except the late-model combines. Better buys are coming this year.
4. Older, used combine values will hold higher. It’s harder to find nice, older harvester models. This was highlighted in late 2022 with hot prices, such as a 2004 John Deere 9560 Walker Sidehill with 3,544 engine hours selling for $96,500 at a Dec. 16, 2022, farm auction in Ford City, Pa. Or a 2004 Case IH 2366 with 2,724 engine hours selling for $79,000 at a Nov. 30, 2022, farm auction in Curlew, Iowa.
5. Higher rising interest rates will finally impact the used farm equipment market. Dealers and brokers will assess the danger of higher holding interest costs on large, late-model, used units, and we’ll see the effect in early 2023. If they hold that used $300,000 tractor on their lot all year, they’ll need to sell it for $325,000 to just break even on it. Ouch.
6. Growth of the online equipment marketplace will continue. There is no turning back on this trend. The upside is you’ll see more potential buyers for whatever you are selling. That is a powerful thing.
7. Minnesota Vikings will finally win the Super Bowl. OK ... this old Norwegian Minnesota boy was just dreaming!
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