At the time of this blog publishing, the supply of compact track loaders was almost tripling year over year and now in early 2024, we’re experiencing the effects of that oversupply at auctions and dealerships. Action values have dropped about 20% since February 2023 and the dealer list price declines aren’t too far behind. However, we know March is one of the two biggest months for skid steer sales, and with an unseasonably warm winter as of yet, the construction buying season may ramp up a few weeks early.

Watch as Andy Campbell, Director of Insights, covers this trend in a recent Ask Andy video.

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Earlier this year I was on the road talking with a number of independent dealers about the supply challenges in their business. A recurring theme has been the short supply and higher demand for skid steers. In a conversation with Dustin Browne, owner of DB Equipment, he was in agreement with what we are seeing in our data and exploring below. “Supply is getting better. Prices are coming down and the demand has slowed some.” Despite not getting as much press, the tight market of these mini, but mighty loaders has had longer lasting effects than both combines and tractors.

Before digging too deep into the details, let’s level-set on terminology. I grew up calling these synonymously skid steers and skid loaders. (I also refer to anytime I eat as dinner and supper, so perhaps I’m not the best linguistic reference?). At Tractor Zoom we refer to wheeled skids as ‘Skid Steers’. The traditional loader equipment with four wheels pictured below.

In the early 2000’s, track versions grew in popularity. We refer to these shown below as “Compact Track Loaders”.

Whatever your naming preference, there is no doubt that they have been in high demand and recently tracks have been differentiating themselves from wheeled skid steers. And just as there are numerous jobs these machines can do, there are soooo many ways to look into this data. I’ve chosen to focus primarily on demand, supply, tracks vs. wheels and values. If you are interested in the differences between regions or brands, let me know and we can dig into that data further!

Tracking the available supply over the past 18 months shows that for most of last year the supply (yellow line below) was so tight that whatever showed up on a lot was immediately scooped up by demand (green). The chart below is an aggregation of all our dealers for the wheeled skid steers, so there were likely some that had a few extra units around, but that also means there were many dealerships who could not get their hands on these units. That starts to change this past spring when supply (blue) increases and demand takes its seasonal summer dip. 

Now let’s contrast these wheels against our compact track loaders below. Supply was still tight for most of last year, but the difference begins with incoming units in blue consistently outpacing the green demand earlier in the year. This is not because demand is lower for tracks. In fact the opposite is true. Look at the y-axis metrics of units/dealership lot. Track sold units have been approximately 150% higher than wheeled units. It’s that more of these compact track loaders are being added to the market, presumably as a push from the manufacturer. 

This change in market composition is more apparent when I loaded the Tractor Zoom auction and dealership sold volume side by side as a percentage of the whole. Below is a graph of aggregated auction and dealership sales from 2022 and so far into 2023, sorted by the year those machines were manufactured. It gives us some historical perspective on the growth of track loaders’ use and popularity over the past two decades.

If you are interested in setting a value on these machines, the rolling GIF below may help. It shifts through the recent auction data from above by year of production. Starting with machines produced in 2001 you can watch the compact track loaders (blue dots) enter the scene and be in a similar spot as those 22 year old skid steers (gold dots). It's not until we get to machines that are 12 years old in 2011 that we start to see some separation in blue tracks rising above the gold wheels. When the graphic gets to the most recent year, we not only see the premium that tracks hold above wheels, but we also see the majority of the dots turn blue showcasing the changing construction of the market. 

It’s not that there were dramatically less skid loaders produced, they have just been more of a static market as opposed to the growth in compact track loaders' price and popularity. 

So where does this get us on valuations? For that, Tractor Zoom Pro’s Market Trends has one of my favorite graphs for quickly showcasing the dealer / auction spread and how it has changed year over year for all different ages of machines. I run through this view in the GIF below. In the first view I select auction values from last September (dark green) compared with this last month of September 2023 (light green). You can see for all ages of machines with the exception of less than a year old compact track loaders, the value was higher last September than it is now. I repeat this exercise with dealer listing data (last year in dark blue, this year in light blue) to arrive at the same conclusion, although those loaders older than two years old on dealers lots are not nearly as discounted as the newer items. 

These trends reflect what Dustin Browne has been seeing in his business. Supply has improved, demand has slowed, and prices are dropping. If you are interested in a more detailed view of this information, or how your organization can use Market Trends within Tractor Zoom Pro, feel free to reach out to me to set up time to talk.