Used farm-equipment values in the U.S. and Canada gained in the fourth quarter as farmers paid more for tractors, planters and combines amid tight supplies, according to a Machinery Pete report.
The Machinery Pete Used Value Index rose to 9.4 out of 10 in the three months through Dec. 31 from 9.3 a year ago, according to a report e-mailed to Bloomberg News yesterday. Tight supplies, rising prices for new equipment and end-of-year purchases by farmers boosted used values, said Greg Peterson, the index’s author, who compiles data from more than 800 regional auctioneers in the U.S. and Canada.
“Strong used farm equipment values equal positive conditions for strong sales of new farm equipment,” Peterson said in an interview today. “I don’t think we are going to see used prices drop.”
Used farm-equipment prices in the U.S. and Canada have increased since 2004. The gains have accelerated since 2007 as corn and soybean rallies put more cash in farmers’ pockets and manufacturers reined in production, Peterson said. U.S. farm income reached $100.9 billion in 2011, the Department of Agriculture forecast in November.
Prices for 10- to 30-year-old combines in good condition continued to attract higher prices, Peterson said. Prices for used combines that are as much as three years old were stronger than expected, Peterson said.
Deere & Co., based in Moline, Illinois, is the world’s largest farm-equipment maker, followed by Amsterdam-based CNH and Duluth, Georgia-based Agco.