Updating machinery in 2023

Question

We have a few items on our list for updating in the near future. An 8320rt, a 4830 sprayer, and a 1770NT planter. I priced out a trade to upgrade my 2016 8320rt for a USED 2021 8370rt with 600 hours and they want $234K to trade.  I paid less than that for the 8320 3 years ago!  The cost has more than doubled.  In your opinion, is there any chance the good used machinery market drops? Or are we at a "new normal?" Will used 8370rts always be nearly $500K?!  I can't fathom how anyone can make these new numbers work.  We are lucky to have very good off-farm income, and I can't imagine paying that for a used 370 horse tractor.  Thoughts?

Answer

What are hours on your ****?

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Hello  sounds like you have a great farming experience and equipment.   What do you produce ?   My name is *********   I am daughter of  My Father who was a great farmer also,  I wish I was old enough to learn more from him when he was so active.  
 I am interested in learning how to farm in MN due that I am planing of moving there to be close to family members.   I was hoping to find a farm that would need some help perhaps a job for a few weeks to learn more how people operate their farms in the change of seasons.  We have a 10 acre parcel in CA and would like to sale and buy a ranch in MN.  Please let me know if you can use some help in your farm and where you are located please ??  
 Thanks,  kindly 
 ********* 
 ************

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we are selling this nice good running great 75 MF tractor,   Asking 9,500  OBO

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the numbers work with a lower cost of living.   The avg farm size will need to increase in size substantially.   The tech stack coming in DE is powerful and the other OEM (machinery competitors ) don’t have the same product offering (quality).    Stay current and pay the piper.     Could there be some better deals ahead - yes.    We getting to the 2018/2019 bottom of cycle deals ?  Unlikely.   Just buy and stay current

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We just bought a brand new forage harvester from ****************** they treated us very well on the trade.

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********** *************.  Interested

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have to stay updated with current equipment.   It’s like running a business with an old computer.   Not a great idea long term.  It’s just the cost per acre.   I found that number to not be up 50 percent cause of trade in value.     Profit wise it’s palatable.   Balance sheet use of new equipment is a little scary !

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Based on the current data I believe tractor prices for >100hp are going to continue to trend up for the next several years. For the >100hp segment demand is very high and supplies are low. Just my observation

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if the 8370 value drops also means your 8320 value drops also

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Anything JD is way overpriced. If it is just a tractor I would dump them and go a different route but not case or nh either…

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Another thing to think about is next model year newer. 8R 370RT with same amount of hours. What’s the price difference there? Will older model depreciate faster? Better programs on newer model? Or do you want to be the guys that trades at 600 hours and keeping up with warranty and depreciation.

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In my area a dealer said last fall that 2023 would be tighter than 2022 for new equipment. That doesn't necessarily mean prices will go up though. I think we'll need to burn through on farm cash or new equipment prices soften before we see things go down a bit more on the used side.

I'm guessing a new 8370rt must be 550-600k+? 600hrs is barely broke in so I'm not surprised that it "only" dropped 100k. $160/hr depreciation? Tractorhouse has a few 2020's with 1200-1800ish hours for 400-375k.

For 400k you could get into a 400hp low hour Fendt... but those are wheels not tracks..
https://www.tractorhouse.com/listing/for-sale/220452951/2021-fendt-942-vario-300-hp-or-greater-tractors
https://www.tractorhouse.com/listing/for-sale/220154497/2020-fendt-939-vario-300-hp-or-greater-tractors

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We have a smaller size tractor & farm less acres than most. We usually trade when extended warranty is up, this time it will cost us 50 percent more dollars/hour to trade. How ever if one has a major component failure it would be cheaper to trade for us. If nobody buys new, there will not be any used.

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we buy old iron you can go buy a decent 2010 385 Steiger for 90k. That’s how we get big horse power for cheap and less electronic issues too

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when the price of the new equipment you want decreases, so will the trade value of your trade ins.

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I just traded a JD 4730 sprayer for a 2021 4440 Case instead of a JD and save $30,000 . Deere has priced themselves out of my market!!!!

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Hi ****, I currently have a 1770NT 16-30" that I'm going to use this spring and then plan on selling that and getting a 24-30"... Is your plan to get rid of it before this spring planting???
Thanks
****** ***********, Minnesota
************

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We have thought about upgrading but came to the realization that it will be better to stick some money into what we have for the next few years!

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not worth it imo     The age of my equipment I might as well run as long as I can     I’d rather start hiring some things done rather than update equipment at these prices

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I am of the opinion you can sink a lot of repairs into something, before you even come close to cost of updating to newer, not even talking about new

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Prices will follow the market.  Falling demand will lower prices.

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ALl the costs are stupid high. I get equipment after it is worn out and fix it up so I can run it. It's the only way I can make equipment work.

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to update your planter, if you don’t care about going 10mph, you can buy great used row units from a guy like me who took mine off to upgrade to a high speed planter. I’d sell you the used row units in excellent shape for a very cheap price.  And I’m sure you can find lots of others like mine for sale.

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At Tractor Zoom we track 65% of all machinery transactions. Right now, we do not see any leading indicator pointing towards a slowing 300+ HP tractor market. In fact, it is a bit stronger today than it was in December. That said, we do not expect the market to continue rising, but holding steady, based on farmer cash on hand, low supply and 2023 net farm income outlook. Attached is a Market Index to show you the market. Also, the average list price for a 2021 8370RT with 600 hrs hrs is $368k (not knowing the options on the unit you're buying). The avg dealer list price for a 2016 8320RT with 3000 hours is $240k and avg auction is $150k. As always we advise farmers to use good data to make equipment price decisions. Price your entire fleet at 
 https://tractorzoom.com/user-equipment-list/landing
 Cheers! ************

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****, have you looked into Fendt at all? I work for Ziegler in Iowa and we get lease returns on equipment that have a few hundred hours on them and I think they’re pretty competitive to Deere. It’s easy to switch from Deere too cause ********* offers a kit to install all your Deere auto steer equipment and it ties into the factory equipment on the tractor. No need for any extra planter monitors or anything like that. Although the new Fendt planters are pretty cool also!

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It is going to take a 7 year depreciation cycle to get thing straightened out. The manufactures lost 2 years of normal production and they have no way of making up for it. The used equipment market is making up the difference right now. Now that new prices have adjusted they should stay a little flatter until the end of the 7 year depreciation cycle when they start to seem "reasonable" again. Depending on how grain, livestock and specialty crops perform in the global economy will determine if manufactures need to start offering any incentives to buy in the next few years. At this point in time used equipment prices should come back inline with a more "normal" ratio compared to new equipment.

Recently, I had been thinking new equipment was a better way to go vs. used but now I'm thinking repairing what you have is the better way to go. Even though parts prices are bordering on ridiculous, they are still more reasonable than new or used equipment. The only way I would consider buying equipment right now would be if there was a big potential for increased performance which means demo or new equipment. I would not pay these kind of prices for used and out of date equipment that is partially worn out. But if you have used equipment you would like to sell now is the time to come up with a plan.

Just my opinion.

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I only run 250 acres so updating machinery at current prices doesn't pencil out. I'm trying to get more profit per acre instead. I did fungicide the first time last year and that paid off very well. This year I'm trying micros and more cover crops. I'm sticking my profits into that and paying off debt faster. Will have farm debt free this year!!! When the collapse comes I will be in a position to update machinery or expand land

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Updating machinery in 2023

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