Combine Market Shifts

Farm equipment headlines over the past two years have been roiled with headlines of short supply. That trend is shifting, based on the latest Tractor Zoom Pro Market Trend data.

This shift was preceded earlier this summer with an abundance of used combines at auction, as seen in the first figure below. Not since the record amount of combines sold in August of 2020 have so many combines hit the auction block in one month.

A return of used combine supply alone doesn’t define a market turn, especially since it is more than a short used supply creating our current situation. Turning our attention towards other indicators though does give some indication this isn’t a fluke. Approximately 25% of dealerships' currently-listed combines are under 1,500 hours, as opposed to 37% last year. This shifting imbalance means that more dealer inventory is now saddled with higher hour machines than it was a year ago, which you can see below.

As all of this is going on, keep in mind that we are now living in a time of higher interest rates and likely lower farm profitability. As this center of used gravity shifts older, it can (and has!) put a lot of pressure to aggressively move high-hour inventory before the purchasing season has passed. Within the Tractor Zoom Pro Market Trends tool, we are seeing the greatest year-over-year declines in the list prices for combines with over 2,500 hours. The more prolific S series John Deere models are leading that price reduction charge! (Within Market Trends you can see the current % price changes on all Make/Model combinations)

While Econ 101 is not a revelation to any used equipment manager, having a real-time pulse on the market may be your golden ticket to proactively moving your risk off your lot before the market makes its move.