Used equipment market saturation concerns in 2021

It's important to have an eye on the market when valuing heavy equipment. We discussed the current market saturation of used combines earlier this month, but combines aren't the only asset type experiencing market saturation. Watch Bill Albaugh talk about some other asset types that are seeing market-induced constraints on values.

Tractors continue to be saturated, but good, low-houred tractors — 2000-, 2500-hours or less tractors — are still good property because of the price increases that are out there and the technology that gets added to the pieces of equipment. The price of a new one continues to go up. So a tractor is not worn out by any figment of the imagination with 1000 or 2000 hours on it, and a lot of manufacturers have extended warranty programs on them that helps from a security standpoint of buying used. Tractors are saturated, but they aren't hurt in value, at least anything below 2500 hours. Your higher-houred tractors tend to slow down because those are the tractors that everyone is getting out of to buy the next lower-houred tractor.

Forage choppers continue to be difficult, only because there's only so many farmers that buy forage choppers. You know, you're going to be chopping corn in areas that are strong with cattle or dairy. There are only pockets of areas that sell forage choppers, number one. And number two, they have a tendency to be very labor intensive once you get them on your lot and have to recondition them for the next buyer.

Another piece that has had some issues with market saturation is large planters — 16-, 24-row planters, that type of a thing. I think the manufacturers have slowed down on their production so it's kind of helped with getting rid of some of the used values. Those are particularly vulnerable to have market build-up. The other factor that ends up with planters is the ability to freight them from one state to another, so you have a tendency to try to sell them in your own yard, so to speak.


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