Unraveling the Resilience of John Deere 8R Tractors: What's Next in 2024?

A large volume of row crop tractors are finding their way to auction, helping to alleviate the carrying cost pressure on the dealership, yet the more that flow into the market risks over-saturating the need, resulting in a quick drop in values. Since harvest began, we’ve tracked 60 John Deere 8R auction sales, all with more than 300 horses (310, 340, 370, 410s). These sales brought over a combined total of $20 million. There are still about 2,000 more of these for sale either on lots or at auction across the US! To say this subset of tractors is creating a great deal of consternation is an ornate understatement. This specific analysis spawned from a Tractor Zoom Pro dealer auction update meeting held earlier this month. A snippet of that meeting is embedded below in our analysis.

The supply is already out there, so the question is, “If and when this market might tip downward and if it does, will it pull other large row crop tractors with it?” Starting with 8R 310s all the way up to the 8R 410s, I've pulled the historic data from Tractor Zoom Pro auction results. This data is graphed below, with January to September 2023 sales in red and October in yellow. I left that month to stand on its own as an inflection point separating farmers’ before- and-after harvest mindsets. Finally, we have combined November and December in black to stand out as the most recent sales figures. The x-axis is simply machine hours on those tractors for all the graphs.

8R 310s sold recently have less usage than those sold early in the year. These most recent sales in November and December did sell higher than those in October, but with the bifurcation of hours it is difficult to say with certainty that these are trending higher than early ‘23 sales. 

We discussed these in the meeting, which you can see in the embedded video. Some of the biggest separation out of all the 8Rs are in this model. These recent sales are not up to '22 values, but are sitting just as high, or higher than earlier this year.

Overall, these John Deere 8R 370 auction values in Nov. and Dec. are softer than what we experienced earlier in 2023, especially those with less than 1,000 hours. 

I did remove one high Dec. sale from this data set. A Landmark sale from earlier in the week that had 1,101 hrs for $336K. This removal didn't move the trendline significantly, but itself was considerably higher due to a lot of amenities in the cab and IVT transmission. I believe this reinforces the theory that there are still farmers out there with good profitability and carryover cash from ‘22 grain. They are selective and not willing to settle, but willing to pay a premium for what they really want in a tractor that will last them for the foreseeable future. Here is the full description of that particular tractor: (1,101 hrs., MFWD, 40K IVT, ILS, Select series cab w/susp., active seat, buddy seat, 5 hyd., 60 gpm hyd. pump, return flow, power beyond, 1/2" aux. hyd., 3 pt., quick hitch, 1000 PTO, integrated autosteer, 4600 processor, AutoTrac, Data Sync & Tractor-Implement automation activations, Cat 4 HD drawbar, (20) front suitcase weights, rear wheel weights, select comfort cab & visibility pkg., front hood guard, diff lock, cold weather start pkg., front fenders, wide coverage rear fenders, 380/80R38 front duals, 480/80R50 rear duals,).

Recent sales of the 8R 410 seem contrary to basic Econ 101. November and December auction results of this higher horsepower 8R are even stronger than they were earlier in the year. 

It should be noted that the highest red sale point below (642 hrs for $436K) did have a signature cab with leather seats… Another example of a select group of farmers willing to spend top dollar for what they want this year?

Looking Forward to 2024 

When trying to understand the 'Why' behind an 8R 410 being up while 8R 370s are weakening, we need to crack the Econ and Marketing textbooks. First the supply. In Tractor Zoom, we have over twice the amount of 370s as we do 410s currently listed on dealerships’ lots. I’m not privy to the production allocations of 370s to 410s to know whether twice as many 370s rolled out of Waterloo, but that doesn’t seem to be matching up with current demand. This is where marketing, and more specifically, cannibalization, come into play. In conversation with one of our dealer partners after meeting last week, he believes, and I agree, that the 370 is a hard sell when compared to a 410. If you are going to pay that much money (a list average of $446K vs. $477K) for a tractor, why not just spend a little more (approximately 7% more) to get the most pulling capability you can?

Regardless of this cannibalization of 8R 370s, the big question remains how this entire large row crop market will behave in 2024. Many dealers I’ve spoken with expect this stronger than anticipated demand to dry up after 2023’s 179 tax deductions are off the table. We will continue to monitor daily auction sales to see if the next couple of weeks provide any early indication of that happening. 

If you are interested in joining in with some of these auction update sessions, just shoot me an email at acampbell@tractorzoom.com to let me know.