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Track Record

12/21/2020

A version of this article was originally published in Successful Farming.
With all the challenges of 2020, we have to admit that this Fall was kind to us. Besides a little rough weather early, the majority of the harvest season was pleasant. Grain bin fans humming at night. Mix of color in the trees and equipment crisscrossing the field chasing each other. Calming and exciting at the same time. As I drove across the middle of the country the last couple of months, I caught a glimpse of a rare sight. A farmer’s entirely green fleet with one lone red tractor pulling a massive grain cart. You do not see this mixing of colors very often, so it caused a double-take and made me wonder why. This Steiger Quadtrac, easily housing more than 400 horses under its hood, was certainly needed to tow the behemoth grain cart behind it. But why adopt Case over Deere if your operations is so obviously slanted green?
I showed some restraint to wait until I got back to the farm before pulling out my phone and checking Iron Comps’ Insights to find the difference between the quad track values of these two brands. Turns out there is quite a difference. First of all, the entire track tractor auction market is dominated by John Deere, Case IH, and Challenger, with just a handful of a few others. Historically this space has been all red. Case began earlier in 1996, and held that competitive edge with a four track patent that ran out about five years ago. Sure, other manufacturers released two track tractors, but those early models have been known to tear up the soil and be a rough ride before the OEM eventually improved the suspension. When looking at the Iron Comps' data, I could see the early preference for Case. For all track tractors built between 2010 and 2015 the average Case IH track value was higher than average. That all changed in 2015 when John Deere introduced the RX. These quad track models exact a much higher price right out of the factory. Because of this higher starting price, John Deere has owned the title of higher-than-average-price for track tractors produced in 2015 – 2017.
While there is a big initial price difference between red and green, what is most interesting is the different rates that these machines retain value. To compare similar sets of data, I filtered and selected the data to include only four track models of both Case IH and John Deere with less than 2,000 hours. This helps put Case on parity since Deere has not been in production as long and there are not as many hours accumulated on the green machines.
In these results, John Deere has that higher initial price, but decreases in value at about the rate of $125 for every hour it runs. Compare that with Case IH, whose tractors decrease in value at only $50 per hour. There are some explanations for this discrepancy. Some Case Quadtracs are ‘scraper specials’, models without the extras like 3-pt, PTO, or any bells and whistles in the cab. Because these models are basic, there is less value to depreciate early with usage.
Even if you are a green fan, you must give credit where credit is due. A good portion of this red retention of value likely comes from years of experience they have had continually improving that early model released back in the nineties. If you are valuing a quad track, red, green, yellow, or whatever color, be especially sure in this case to pick the most relevant comparables for the most accurate values.