Are demand and auction values changing for different segments of row crop tractors in 2023?

During our Farm Equipment Dealers Fall Market Update webinar on 11/15/23, the following question was asked by a member of the audience, “Looking at row crop tractors, in your data do you see an increase in value with machines with 1500-3500 hours or is it mostly on the late and low side of the spectrum?”

To explore a change in price sensitivity by hour ranges of tractors, I pulled historical auction sales data and sorted the average sales results in segments of every 500 hours. To help control variability and stick to the more valuable machines, I filtered results for models having 300 - 424 horsepower and manufactured in 2017 or later. I also excluded any December auction sales since 2023 has not yet had the end-of-year boost that previous years would have. The following graphs showcase that data, sorted in the legend by sale year. Notably with 2022 sales in light blue and 2023 sales in dark blue. 

Average auction results in the graph from 2019 to 2022 grow like many of us vividly remember. The suppressed farm economy, and consequently the equipment market, was sluggish until commodity prices took off in late 2020 and pulled equipment values along for the ride into 2021 and 2022. Now that supply chain issues are largely corrected and net farm income is decreasing from last year’s peak, how are these different segments of tractor values responding? 

Casey, who posed the question, was right on target with identifying 1,500 hour tractors as the potential tipping point. In our graph we can see the 500 - 1,500 hour tractors continuing to have higher year-over-year auction strength, based on 55 sales in these two categories. This changes though from 1,500 - 3,000 hours where 2023 values were lower than 2022, based on 20 sales in these three categories (remember we are only looking at 2017 model years so there are fewer of these at higher hours).

There may be an anomaly in auction values in 0 - 500 hours from 2022 to 2023, but the number of machines was so few in this hour segment (5) last year. AND, two of these machines were an 8RX 410 and 8R 410, both of which still hold the record for highest auction prices for their respective models! (What a year we just witnessed ?!?!) 🤯

Just for comparison, we have had a more prolonged supply of Class 8 combines in 2023 and the price decreases across machine hour categories is more consistent. 

One final point to note for the larger row crop tractors is that the short supply combined with high values of 2022 created wild price fluctuations when viewing charts. Now that more supply has entered the market, it has smoothed out the depreciation curve, as you can see in the same graph, with a fancy trend line drawn below.

So to answer Casey’s question, no, I am actually seeing a decrease in the average values of 1,500 - 3,000 hour row crop tractors in comparison to 2022, while the lower hours of 500 - 1,000 appear to be up year-over-year. So far, at least.