Andy Campbell, Tractor Zoom's director of insights, has pointed out that we have entered a new normal in commodity pricing. This implies that the demand side of the equipment equation is likely to be in a valley as well. As he stated, "Prices have followed supply, and supply is a leading indicator in our data that predicates a change in values." Currently, pricing on everything is on a downward trend, and the most capital-intensive equipment has been hit the hardest.

Year-End Outlook and Farmer Decisions

Campbell predicts that prices will remain lower and the sales volume will be lower through December. However, there may still be a year-end uptick as final harvest numbers come in and farmers make their year-end decisions. He believes that farmers will be more selective when it comes to equipment purchases. If a farmer needs a specific piece of equipment, they will still seek it out. There is currently enough supply that they can be picky and work with a dealer or look at auctions to find exactly what they need.

Self-Propelled Sprayers

According to Campbell, the supply of late-model used sprayers with fewer than 1,000 hours is about 70% higher than last year. These sprayers are still selling on dealer lots to some extent, but more are being unloaded at auctions. One of the steadiest pieces of machinery he tracks is the Case Patriot 4440, and its value has only dropped about 10% year-over-year. However, some higher-priced units like the Hagie STS12 have seen a nearly 33% year-over-year decline, and even John Deere 410R units have dropped 25% at auction. He adds that fewer higher-priced sprayers enter the market each year, so prices fluctuate more with the smaller pool of sales. This year, there have been quite a few more sprayers coming up for auction than before.

Quadtracs

Supply of Quadtracs began to rise in June 2023. From August 2023 to August 2024, late-model, low-hour units on dealer lots increased by 250%. This poses a problem for dealers as these later-model tractors cost around $500,000 each, resulting in high holding costs for units on the lot. Campbell suggests that if a farmer doesn't find what they want at auction by the end of the year, they can talk to a dealer. There are enough Quadtracs available to see if they are the right fit for their operation, and this is a good time to make a move. There has been a 20% drop in the value of Quadtracs, mostly since the end of the 2024 planting season. In 2023, there were strong end-of-year sales for 4-wheel-drive tractors, but recently, they have been facing challenges.

John Deere 8R Series Tractors

In the last year, the average prices for the 8Rs have dropped between 8% to 11%. But from August to September alone, they have dropped 16% to 18% compared to 2023 values. Campbell believes that there are too many machines in this horsepower range and too few interested and able buyers. This has forced dealerships to unload inventory pre-harvest into the end of the year. A similar situation occurred in 2014 when there was a surplus of machinery due to overproduction after several years of high farmer profitability. When higher yields returned, commodity prices fell, and the excess equipment supply drove values down. Campbell emphasizes that the same economic story of oversupply and low demand is repeating. However, what is different this time is that the oversupply is not as vast as before, and manufacturers have better allocation plans in place. Also, interest rates are different now, and the starting value of machinery is higher than it was 10 years ago. This time, the excess equipment supply should clear the market more quickly.