Combine and Tractor Values Diverge11/25/2022
The story for the past 24 months has been a fairly consistent script. First it came as a surprise when farms experienced unanticipated profitability in late 2020. Tractor values began to rise at auctions as farmers competitively raised their paddles, helping them soften that year's tax burden. Combine demand and values soon followed. Since then they have risen together on not only this wave of farm income, but also the tsunami created by COVID-induced supply chain constraints. Well, the tides are showing signs of change, but not for both categories.
In the below videos I dive into row crop tractors first where we see a continued surge in values. The strongest in fact since the highs this past spring. I neglected to mention this in the videos below, but if you haven't seen these price index trends before, the combine and tractor trends are the blue lines and are calculated from actual auction values. The gold line is average monthly cash corn price, with values noted on the right axis. Simply there as an FYI market-driving comparison.
Row Crop Tractors
The combine analysis tells a different story. We started to see early signs of a combine reversal back in August with a flood of combine supply returning to the auction block. While combine values are by no means plummeting, both the auction market, represented by the Combine Index in the beginning of the video, and dealer listing values in the second half of the video, are showing softer values than we experienced this past spring and summer. Downward value trends with an increase of supply makes sense. The question now is if this is a minor resettling, or the start of something bigger?
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