Have Prices on Combines Topped Out?

Combines are divided into classes defined by the Association of Equipment Manufacturers. The class of combine is generally determined by the model's horsepower; the higher the horsepower, the higher the class number. First, let's focus on Class 6 and Class 7 combines. Class 6 combines are 268 hp. to 322 hp., and Class 7's are 323 hp. to 374 hp. If we differentiate small and large combines between Classes 6 and 7 where Class 6 and lower are "small" and Class 7 and up are "large," we see that small combines made up 95% of the used combines sold in 2002. Today, large combines make up the majority of harvesters sold.

The chart (shown below) is taken from an Iron Solutions product called IronTrends. It shows this shift toward larger and larger used combines. The green line represents the difference between the small and large combines. Everything below the line is Class 6 or less; above is Class 7 or greater.

Larger combine classes didn't exist in 2002. Class 8 combines first appeared in 2003; Class 9's appeared in 2006. Slowly, these larger combines achieved more of the total used units sold. Another contributing factor to the increased demand for these larger machines is the increase in the size of the biggest farms. According to a USDA report in 2018, the majority of production has been shifting to larger farms over the last 30 years. Today, most of the crop production is from a relatively small number of very large farms.

No matter how big the farm, there are practical limitations to the size of combines related to engineering and logistics. Aside from these limitations, it appears there may be some limits to the producer's demand on size, too. The growth of market share of the used Class 9 and 10 combines is not as rapid as their Class 7 and 8 counterparts between 2008 and 2019. The biggest Class 9's and 10s make up less than 10% of the total used units sold in 2019 after having been in the market for 10 years. Perhaps we've hit the ceiling of combine classes in the foreseeable future.

Today's smaller combine owners may have a depreciation advantage. If you're in this camp, there could be some good news for you. Note how the green line flattens out in 2016 to 2019. This shows that the move away from Class 6 and lower combines has slowed since 2016. The demand for smaller combines has stabilized compared with years prior to 2016. That should mean these smaller combines are not depreciating as fast as they were from 2006 to 2016.

Put another way, you would expect the values of the Class 6 and smaller combines to fall less dramatically than they have done prior to 2014 because of somewhat steadier demand.