TRADE VALUES & TRENDS
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According to a recent study by IRON SOLUTIONS, nearly all major categories of used farm machinery posted increases in average resale values between 2007-2009, with the most impressive gains coming from larger, more productive late-model equipment.

For each machine category, the study measured the average resale cash value (adjusted for options, hours and condition), based on all reported sales. It’s important to note that the average age of machines reported for the individual quarterly reporting periods was not adjusted to reflect the fact that newer models were sold over time.

As seen in Figure 1, high-clearance sprayers led all major categories in terms of resale values, increasing nearly 37% in the fourth quarter of 2009 when compared with the first quarter of 2007. The high cost of sprayers — coupled with strong demand and a willingness among farmers to invest in larger, newer equipment — have kept values at a premium.

Used combines, along with combine headers, also showed impressive gains over the past 3 years, with average resale values increasing by 27% and 26%, respectively. Forage harvesters posted the largest gains during the reporting period, with resale values increasing by nearly 50% between the first quarter of 2007 and the fourth quarter of 2009.

The one notable exception was cotton pickers. Values dropped nearly one-third between the fourth quarter of 2008 and the same period in 2009, reflecting pronounced weakness and volatility in this market segment.

Tractor Talk

The study shows that the average reported value of tractors increased by nearly one-third from 2007 and 2009, with large horsepower tractors increasing at a much faster clip than their smaller counterparts.

Figure 2 shows that tracked tractors led the category in terms of resale values, followed by large row-crop tractors and 4WD tractors. Resale values increased by 31%, 38% and 48%, respectively, between the first quarter of 2007 and the fourth quarter of 2009. At the lower end of the tractor range, values improved over the last 3 years, but not nearly as dramatically.

Key Takeaways for Dealers

Dealers should keep a close eye on large, late-model machinery for the best used equipment sales opportunities in 2010. New, larger tractor units and combines are retaining value, which means dealers can accept trade-ins knowing there will be plenty of buyers. The opposite may be true with utility and compact equipment that may not be directly tied to farm profitability.

2010 also may be the year to focus on sprayers. Growers increasingly view sprayers as vital for preventing crop damage, and the market is expected to remain strong in the coming months.

 

 


 

The study was provided by IRON SOLUTIONS, publishers of the Equipment Industry’s Official Guides based on gold standard equipment data. IRON SOLUTIONS gathers data on used machinery transactions from dealers, auctions and other sources. For information on the Official Guide, the gold standard data and other dealer solutions provided by IRON SOLUTIONS, visit www.ironsolutions.com