Machinery Pete: The Hottest Market I’ve Ever Seen

I don’t say this lightly. But early 2021 is the hottest used equipment market I’ve witnessed. Please understand my deep Scandinavian roots and distaste for hyperbole when I say this. But, truth is truth; the numbers don’t lie.

The only comparable period I’ve seen was November 2007 into early 2008. Back then, high-commodity prices fueled by the rise of ethanol caused exploding values and sales for new and used equipment. The same trend hap-pened in 1973 when buyers literally had to take a number to buy equipment. 

Then and now, availability became the driving market factor. When any market becomes focused on availability, pricing is secondary. And prices rise — quickly. 

Here are a few of the truths and forces at play in the equipment market:
 

• Manufacturers smartly reigned in production forecasts a year ago, once the pandemic settled over us.
• A commodity price surge last fall and into 2021 spurred buyer demand.
• The price of steel rose rapidly in late 2020 into this year.
• Worldwide transportation and shipping issues mounted late last year and into early 2021. 
• The used inventory at farm equipment dealers dropped to low levels. 
• Dealers’ pool of “off-lease” machines has dried up significantly.
• The rise of online auctions has been huge the last 12 months, allowing motivated buyers from a bigger geographic footprint to click again and again.

This latest rise in used equipment values is, frankly, breathtaking. I saw a 2007 John Deere 9620 4WD tractor with one owner and 1,255 hours sell for $270,000 on March 21 in northwest Iowa. 

How high is that? The previous high price on a 9620 was $195,000 more than12 years ago. It was a 2006 model with only 683 hours. 

See the table below for more:

If you happened to be in the market for used precision ag equipment early this year ­— yikes. The rising values have been eye-opening.