Why Are Machinery Prices So High?

Auction prices have been amazing in the last year — especially in the past six months. The John Deere tractor below is just one example.

This 2021 John Deere 9620RX with 450 hours sold for $625,000 January 28th in Paris, Mo. Photo: Machinery Pete 

While record-high prices are historic in their own right, what’s really amazing is the sheer rising tide of elevated sale prices. 

Of course, the driving force behind the aggressively rising auction prices across all equipment categories has been a lack of supply for both new and used equipment. The limited allotment of new equipment is mostly pre-sold out far in advance. 

As a result, buyers head back into the used market. But they are finding the tightest level of used equipment on dealer lots ever.

The other huge factor continues to be the ever-rising price of new equipment. The supply chain mess forced what we thought were aggressive price hikes on new iron in the past to ratchet up another three or four notches.  Backed up with three decades of data, the ever-rising price of new equipment is shown to pull up the values of good used equipment.

EDITOR’S TAKE:

More confirmation that farmers/ranchers want to purchase equipment that is reliable and offers them the ability to become more efficient in the process. They have money and want to avoid as much tax liability as legally possible. Trucks are also on the purchase list this year. We know that in an “average” year, farmers/ranchers collectively replace nearly one million trucks. However, recent research suggests that 2023 is likely to be an above average year. So, let them know about AgPack® and how it could be worth over $30,000 in exclusive rebates and discounts. And, remember to put your inventory on AgTruckTrader.com, a site specifically built and targeted towards farmers/ranchers.