Tractor Shortages

[rScotty]

Used tractor prices are so high, I just might sell one for the money (plenty of uses for it!) and try to scrape by with 3 for a while.

As someone here noted, it's not that the value of a used tractor has changed much; it hasn't. Good used tractors are worth nearly the same this year as last. What has changed dramatically is that the purchasing value of the dollar has dropped.

If it were tractor prices, I would agree "sell now" since tractor prices are an example of a commodity with a selling price that always cycles between higher and lower

The dollar is different from a cyclical commodity. In my lifetime I've not seen the purchasing power of the dollar ever go but one direction.

Used tractors cost more because today's dollar buys less. I see the difference becoming larger, not less.

rScortty

 

[Paystar]

"One of these is not like the other..."

View attachment 723352

Ya, my dealer used to be all Deere, now they still sell some Deere, but mostly just the big ones to the farmers. But now almost all the sales under 100 h.p. are Kubota's. And Kubota pretty much owns the compact construction equipment market in this area now too.

 

[Hay Dude]

As someone here noted, it's not that the value of a used tractor has changed much; it hasn't. Good used tractors are worth nearly the same this year as last. What has changed dramatically is that the purchasing value of the dollar has dropped.

If it were tractor prices, I would agree "sell now" since tractor prices are an example of a commodity with a selling price that always cycles between higher and lower

The dollar is different from a cyclical commodity. In my lifetime I've not seen the purchasing power of the dollar ever go but one direction.

Used tractors cost more because today's dollar buys less. I see the difference becoming larger, not less.

rScortty

I don’t know about that.
I am on a permanent notification of anyone selling a tractor which I own from Tractor House. 1-2 years ago, my 2 Kubotas were routinely averaging $45,000.
Today, though they are older, the typical asking price is north of $50,000.
I do agree purchasing power is down, but when you can sell a tractor for $5,000 more than 1-2 years ago AND put 500 more hours on it and make more money with it in those 1-2 years, I would have to say I’m money ahead compared to 2019 & 2020.
Remember, I’m using them to put money in the bank. These aren’t hobby tractors (and there’s nothing wrong with hobby tractors).

 

[Hay Dude]

What, are you going to sell the "little" one?
The 126 HP KUBOTA M-126X MFWD?

Yes!
I have been able to do the math and I think Im better off with another large frame tractor with a loader, than a small frame tractor with a loader.

 

[ultrarunner]

Those are Kioti tractors, not Kubotas.

Yes... but the dealers here left New Holland and Deere to focus on Kubota only...

One would not even show me the Kubota line and when I insisted kept saying they were dealing on New Holland and had a lot of inventory...

I stopped by a year later and no New Holland and when ask learned they dropped the line... no wonder sales was pushing New Holland... they had to sell them!

 

[ultrarunner]

As someone here noted, it's not that the value of a used tractor has changed much; it hasn't. Good used tractors are worth nearly the same this year as last. What has changed dramatically is that the purchasing value of the dollar has dropped.

If it were tractor prices, I would agree "sell now" since tractor prices are an example of a commodity with a selling price that always cycles between higher and lower

The dollar is different from a cyclical commodity. In my lifetime I've not seen the purchasing power of the dollar ever go but one direction.

Used tractors cost more because today's dollar buys less. I see the difference becoming larger, not less.

rScortty

Don't overlook some seek earlier series emission too

 

[JasperFrank]

The Toyota Kaizen principles were not well understood by US manufacturers. Yet a great many in management "attempted" to addopt Kaizen in some sort of Western Way. It failed, horribly in every manufacturing place I worked at. JIT works if you have lots of LOCAL small subcontractors. It does not work, if your suppliers are 3,000 miles away.

 

[rScotty]

I don’t know about that.
I am on a permanent notification of anyone selling a tractor which I own from Tractor House. 1-2 years ago, my 2 Kubotas were routinely averaging $45,000.
Today, though they are older, the typical asking price is north of $50,000.
I do agree purchasing power is down, but when you can sell a tractor for $5,000 more than 1-2 years ago AND put 500 more hours on it and make more money with it in those 1-2 years, I would have to say I’m money ahead compared to 2019 & 2020.
Remember, I’m using them to put money in the bank. These aren’t hobby tractors (and there’s nothing wrong with hobby tractors).

I'd say that your Tractor House example proves the point about the dollar falling.
When you take the same tractor and can use it for a couple of years and after that much more use it takes MORE dollars to buy that tractor then that doesn't mean the tractor's value has somehow gone up. It means that the dollars are worth less.
rScotty

 

[Torvy]

I'd say that your Tractor House example proves the point about the dollar falling.
When you take the same tractor and can use it for a couple of years and after that much more use it takes MORE dollars to buy that tractor then that doesn't mean the tractor's value has somehow gone up. It means that the dollars are worth less.
rScotty

If this were the same across all purchases, I would tend to agree with you. Tractors and passenger vehicles (mostly pickups) are experiencing both-and, not either-or.

What you are describing is literally inflation. It is worse now than any time since I was a kid. Even before the current inflationary trend, however, prices for used equipment grew due to increased demand and relatively less supply. Hence, both devalued dollars and simple supply and demand economics are driving the price of used equipment.

 

[rScotty]

If this were the same across all purchases, I would tend to agree with you. Tractors and passenger vehicles (mostly pickups) are experiencing both-and, not either-or.

What you are describing is literally inflation. It is worse now than any time since I was a kid. Even before the current inflationary trend, however, prices for used equipment grew due to increased demand and relatively less supply. Hence, both devalued dollars and simple supply and demand economics are driving the price of used equipment.

And there's another interesting thing that has got to come into play with used prices - although I haven't seen it yet.

It used to be that machinery was deliberately designed to be refurbished and repaired. And the knowledge on how to do so was widespread and well-regarded as a useful skill.
So used equipment had a definite value.

None of those things are as common today, and I wonder if any of them will return. If not, the used market may end up separating itself into used & reusable versus used & not repairable.
rScotty