Midrange tractors hold value for now

As machinery manufacturers continue to rebound from early 2020s supply chain issues, the market has seen some interesting shifts. New tractors’ temporary lack of availability upset the normal pattern.

“The trade cycle got a little backed up,” says Maverick Woodside, director of auction services for Sullivan Auction (sullivanauctioneers.com) and BigIron (bigiron.com). “Farmers were ordering tractors but couldn’t get them. Now, we’re seeing a little overrun on dealer lots of 1- and 2-year-old tractors, some even with warranty, with less than 500 hours coming up for auction.”

Woodside says the used supply of tractors is strong compared with a year or two ago. 

“In the last 10 months it’s really turned around,” he says. “Demand is still good, and prices are hanging in there, even though the supply has increased.”

From the dealer perspective, Adam Richard, salesman at Birkey’s Farm Store in Bloomington, Illinois, notes something similar.

“The last couple years, supply was very challenging, because in order to get used tractors on our lot, we had to have new ones to sell,” he says. “But we’re starting to see more availability, although they are a little bit older.”

Casey Seymour of Moving Iron, LLC, sees a similar trend in 175-hp and greater used tractors. The market lost 1,000 tractors from 2017 to 2020, and 10,000 from 2020 to 2023. A year and a half later, half of those 10,000 were added back. Because of that, Seymour says he expects used row crop tractors to decrease in value by 15%-25% this year.

“The decline is caused by supply catching up with demand and the erosion of the scarcity premium on pricing,” he says. “Like any bubble, there is a correction when it pops, which resets the market to the new normal. This is not the first in the ag equipment market, and it will not be the last.”

Auction results

Looking at midrange (175-299 hp) tractors in the 2021-2024 model years, a search of tractorhouse.com at the end of 2023 revealed 102 listings. Seventy-seven were John Deere, 16 were Case IH, and the remainder were Fendt, Massey Ferguson, and New Holland. 

Posted auction results saw the lowest winning bid coming in at $89,750 for a 2021 Case IH Puma 185, in Arkansas, with 2,154 hours; and a high of $350,000 for a 2021 Deere 8R 250 with just five hours, in Ohio. As expected, 2021 models were in the best supply, with 58 sold, followed by 2022 models, with 39 available. However, extremely low-hour tractors were also available, even going back several model years. 

Further breakdown of the most available Case models (Magnum 250 and 280) show a sale range from $173,013 for a 2021 280, in Illinois, to $251,000 for a 2021 250, in Missouri. Hours definitely played into the selling prices; the 250 had just 10 hours compared with the 280, with 2,131. 

Of the 77 Deere tractors sold in 2023, 52 were 8R models. Hammer prices ranged from $167,000 for a 2021 model, in Texas, to the overall top seller, $350,000, in Ohio. Once again, hours seemed a major factor, with five machines in the top selling spots having fewer than 100.

Operator comfort, tires, and service records

What other factors may be influencing sale prices? Operator comfort appears to be something buyers are willing to pay for. Eight of the top 10 selling units featured a premium cab experience, with leather seats, sound systems, and even refrigerators. Add-ons, such as loaders and grapple buckets, added some value, landing in the middle of the range. Many top sellers also came with at least some factory warranty. 

Good-condition tires also add value. “It’s $30,000 to $50,000 to put new tires on these tractors,” Birkey’s Richard says. “When you’re already looking at $130,000 or $140,000 for the tractor and then needing to add new tires right away, you’re quickly knocking on the door of $200,000.”

Woodside, of Sullivan Auctions, says he expects dealer inventories to level out; yet, the same tractors at auction are holding their value. 

“Looking at retirement sales, tractors with one or two owners and a complete service history continue to outperform at auction,” he says. “I’ve seen tractors go for 10%-20% more on a retirement sale than what the same machine would go for on a dealer lot.”

Richard adds that tractors with detailed service records, from a dealership or provided by the previous owner, are another major factor in determining value.

“If you have maintenance records and can see if there are things that are a repeat issue, you can notice any red flags that might be there,” he says.