Thousands of viewers tune in to the weekly Pete TV podcast, hosted by Minnesota’s Greg Peterson.
We’re in a bust cycle says ‘Machinery Pete’
Tips on best times to sell and buy farm equipment
Nelson Zandbergen
Farmers Forum
RIDGETOWN — Amid a glut of costly new machinery on dealership lots, auction prices for late-model farm equipment softened in 2024 while older stuff in good condition bucked the worst down-market trend the sector has experienced in a decade. That’s according to farm auction analyst ‘Machinery Pete’ — Greg Peterson — who offered his insights at the January Southwest Ag Conference.
The Ontario conference boasts of more than 40 presentations, almost all of which can be attended in person or online. The Minnesota-based Peterson is a tractor fan who hosts the popular podcast Machinery Pete TV that often gets more than 10,000 views per show.
If a tractor is “10- or 12-plus-years old, pre-DEF (not requiring the costly DEF fuel additive), obviously that stuff is like gold when it’s in good condition, loader tractors in particular,” observed Peterson, longtime publisher of the respected quarterly online Machinery Pete Used Values Index. He offered multiple examples of record sale prices achieved for older equipment at midwestern U.S. auctions during the final quarter of 2024.
By contrast, big machinery and combines less than three years old dropped in value on the auction block. “Obviously, 2024 was a year of big change,” he observed, comparing it with the last big market decline in used equipment prices that occurred between the end of 2013 and 2015. “Late-model used values for two and a half years fell like a rock, like 15 % to 25 % year over year, and then they started to level out to a more normal place,” he recalled.
2024 struck him as being “year one” of a potentially similar multi-year market correction, he said.
With large inventories of unsold new equipment in the United States in the retail pipeline, there’s been a sizable increase in the supply of late-model used equipment pushed out to auction. The total number of newer farm equipment items (no more than three years old) auctioned in 2024 increased 60.5 % over 2023 and 233.6 % over 2014, according to Peterson’s stats. To break down the numbers a bit more, the number of auctioned combines was up 26.6 % over 2023 and 120.7 % over 2014. The number of auctioned tractors 175 horsepower and above was up 114 .2 % over 2023 and 126.5 % over 2014.
This extra supply has depressed prices for lightly used high-horsepower tractors and combines in the newer category. As an example, Peterson reported seeing a late-model John Deere X9 1000 combine, with 1,200 hours, go for $345,000 USD at a recent auction — at least $40,000 lower than previous comparable sales.
Peterson also highlighted the market impact of dealer consolidations, with larger dealer groups more apt to send excess equipment to auction when compared to their smaller business counterparts of the past. Today’s dealership networks have gotten “smoked” on the prices fetched at auction but they are better positioned to absorb the punishment compared to, say, Peterson’s father, who had a pair of John Deere dealerships in the 1980s. Those smaller operators were more likely to hold on to equipment that wasn’t selling, he explained.
He cautioned farmers waiting to act on a deal at their local dealership, especially with the volume of equipment being moved out to auction in a shorter period of time.
“In past downturns dealers have always been stuck with too much late model used equipment for a long time, so you, as a farmer, when dollars are tight, you’ve kind of been in the driver’s seat,” he said. The time for a good deal might be more compressed this time around as dealers send inventory to auction more quickly.
For farmers with equipment to sell, he observed that auctions held around Dec. 8 is the magic date to get the highest price. “That’s what the data screams.”
And in today’s online auction environment, farmers must also “sell themselves” along with the equipment they’re trying to unload, according to Peterson. That means the farmer should describe the piece of equipment in person, with a quick video uploaded to an auction service like machinerypete.com or social media.
One of his clients, a meticulous farmer named Dale, was so authentic while explaining a piece of equipment in a video clip, bidders wound up paying a “Dale premium” to own what he had up for sale. “Whether you realize it or not, you’re actually buying the previous seller,” Peterson said.
Sellers just need to be themselves on videos submitted to Peterson. “This is not Hollywood. Just keep your work clothes on, and just say when you bought it (the piece of equipment) and how it can be used.” He charges a fee to have items listed on his website.
While auction prices for newer equipment have dropped relative to showroom prices, the figures are still rather astounding when compared to auctions of the not so distant past. Peterson pointed to a grain cart that recently fetched a record $170,000 USD at auction. The record price for the equivalent model 10 years ago was $72,000; 20 years ago the record was $36,000.
On the retail side, he pointed out that new equipment continues to get bigger and more expensive, with John Deere’s latest and greatest tractor now listing at U.S. $1.2 million. He wondered how high new equipment prices can go and suggested that manufacturers were setting themselves up for a boom-bust production cycle structured around the rise and fall of commodity prices. The bust side of the cycle is currently underway with manufacturers like John Deere cutting hundreds of jobs in the U.S. alone.
