Older AG Tractors Bring Record Prices in 2024
In 2012, the Steffes Auction Group sold a 2010 Challenger MT865C (557 Hours) for $245,000, and this was a record auction price for the next decade.
Fast-forward to August 2024, when a 2012 Challenger MT865C (1678 hours) sold at auction for $315,000. This tractor was 10 years older with three times the hours, and recently there are similar auction records being broken that have stood for up to 17 years!
Don’t capital assets depreciate over time? They can and often do, but new technology plays an important part in how and when capital assets depreciate. The two major technologies driving up today’s prices are reduced emission goals and efficiency.
Reduced Emissions: To reduce particulate matter and nitrogen oxides, Tier 4 engines were phased in starting in 2008.
Efficiency: Precision agriculture and GPS guidance have revolutionized farming practices improving crop yield, efficiency, and overall sustainability. Auto-steering is opening the door for autonomous operation.
But all of this comes at a cost. Average agricultural tractor new prices have risen from $329,000 in 2017 to $492,000 in 2023, a 33% increase in just six years. The list price of one tractor this Fall was $1.3 Million!
So why a record auction price for a 10-year-old Tractor? Machinery Pete sees it like this,
“In this profit-challenged ag environment, I do find a pair of data points to be very telling. At the 2024 Farm Progress Show, my folks on the ground reported a distinct vibe of farmers focusing on simpler equipment options and solutions.
At the same time, recent auction sale prices are continuing to show farmer buyer emphasis on very good condition, older, simpler, pre-DEF, pre-Tier IV tractors, combines, sprayers, and skid steers.”
So, farmers are looking for, and willing to pay a premium for, simple machines that can do the job versus the high purchase and maintenance costs associated with more modern machines. Get a few of these buyers interested in the same, low-hour, older tractor and you may set another auction record.
Reliant Advantage, LLC is active in the marketplace and our USPAP-compliant equipment appraisals bring values you can trust. Asset-based lending, insurance valuations, merger/acquisition appraisals, and equipment sales are just a few of our offerings.
William J. Fischer, CAI GPPA
646-565-9847