2024 Year in Review: Combines

In 2024, the combine market has seen significant changes, marked by contrasting trends that reflect the broader agricultural equipment industry’s adaptation to shifting economic conditions. Key reports from equipment analysts reveal that while the market is adjusting to challenges such as surplus inventory, high interest rates, and shifting demand, there are also signs of increasing auction prices for specific models, signaling a complex and nuanced picture.

Economic Pressures Impacting the Combine Market

One of the most notable trends in the combine market in 2024 is the surplus of equipment. Following strong demand in the early 2020s, dealers are now grappling with a situation where the number of unsold used combines is higher than expected. This surplus is primarily due to economic factors, including low crop prices, high interest rates, and declining farm income. These factors have led to a slowdown in new orders and reduced sales across the board, creating a scenario where agricultural equipment dealers struggle to move inventory.

The surge in combine purchases during the pandemic and post-pandemic period, fueled by government assistance payments and high farm income, led to a sharp rise in demand for agricultural equipment. Manufacturers like Deere and CNH Industrial were initially unable to meet this demand, resulting in long wait times for farmers eager to expand their fleets. However, by 2024, the situation has reversed. The combination of falling crop prices, rising borrowing costs due to higher interest rates, and lower overall farm income has dampened the appetite for new and used machinery. This shift is reflected in the increasing number of used combines sitting unsold on dealer lots, prompting many to reconsider their inventory strategies.

In response to this surplus, some dealers have begun discounting used equipment, offering more favorable interest rates to entice buyers. Others, however, have halted or considerably cut back new orders. These actions are part of a broader effort by agricultural equipment companies to adjust to the changing market dynamics. The transition from a booming market to one characterized by slower sales is a significant shift from the conditions that characterized the market just a few years ago. Manufacturers like Deere are now preparing for slower sales in 2024, with some even predicting reduced profits, underscoring the dramatic market changes.

Surplus Inventory, Dealer Adjustments 

TractorHouse has reported extensively on the surplus of combines and other agricultural equipment in 2024. Dealers are facing growing challenges as they adjust to these changing economic conditions. The surplus of used combines, fueled by the rapid pace of purchases in prior years, has forced many dealers to rethink their approach. In efforts to clear inventory, TractorHouse’s analysis suggests that dealers are offering more competitive pricing and interest rates for the current used combine inventory. 

Adding another layer of complexity to the 2024 combine market, TractorZoom’s analysis of farm equipment auction results and market insights highlights the downward price shift due to an oversupply of high-use equipment. According to their June 2024 report, auction and dealership prices have become increasingly competitive as inventory levels for combines and tractors rise. Specifically, total tractor sales for June were down about 16% from the previous year, and self-propelled combine sales dropped by 31%. This growing inventory and reduced demand have created a buyer’s market where potential purchasers can find better deals on older models, particularly those with high usage.

This trend underscores the dual nature of the market in 2024: While auction prices for some older combines are rising due to demand for used models, the overall market for new equipment is in decline. Cost considerations and the ongoing uncertainty in the agricultural sector drive farmers’ decisions to invest in used equipment rather than new models. With less optimistic forecasts for farm income and crop prices and no clear path to passing a new Farm Bill, many farmers are becoming more cautious about spending large sums on new or used machinery.

Increases in Older Combine Auction Values

While new combine sales are struggling, the auction market presents a different picture. Reports from Machinery Pete’s Combine Price Outlook highlight some surprising trends in the used combine market, where auction prices for specific models have risen. Historically, the prices for older combines have steadily declined as newer models enter the market. However, in 2024, this trend has reversed for some high-demand models, with auction prices reaching levels not seen in years.

For instance, a 2008 Case IH 2588 combine sold for $147,500 at an auction in mid-July 2024, marking that model’s highest auction price in eight years. This sale reflects an upward trend in auction prices for older combines. Another example is the John Deere 9770 STS combine, which has seen consistent price increases at auctions over the past three years. In 2021, the average auction price for this model was $74,341; by 2023, it had risen to $85,110. This represents a significant increase in the resale value of older combines, which traditionally depreciate over time.

The reasons behind this price increase are multifaceted. One factor contributing to this trend is the ongoing demand for used combines as farmers seek more cost-effective alternatives to new machinery. Given the high cost of new combines and the uncertain economic outlook, many farmers opt for used models that still offer good performance but at a much lower price point. 

Conclusion

A combination of challenges and opportunities characterizes the combine market in 2024. On the one hand, the surplus of unsold new combines, driven by economic pressures such as low crop prices and high interest rates, has led to slower sales and a more cautious outlook from manufacturers. On the other hand, the used combine market is experiencing a surprising uptick in auction prices for older and more high-hour machines as farmers seek more affordable alternatives in response to the high costs of new machinery.

Reports from TractorZoom, TractorHouse, and Machinery Pete all paint a picture of a constantly evolving market shaped by changing economic conditions and shifting demand patterns. As the agricultural equipment industry adapts to these challenges, dealers and farmers must remain flexible and strategic in their approaches. The coming months will likely continue to reveal the full impact of these market trends as the combine sector responds to ongoing economic pressures and evolving buyer behavior. Ultimately, the combine market in 2024 will remain an intriguing case study of adaptation during times of financial uncertainty, with both risks and opportunities on the horizon.

Moving from Q3 to Q4, the used combine inventory decreased 717 units from 10037, settling the inventory slightly above the total in January of 9191. I would look for used combine inventory to continue down in number through the end of Q4 into Q1 of 2025. The lack of new orders will have an impact on used machines. One will be the reduced number of late model and low-hour machines added to current inventory levels. Because of the lack of new sales and adding to the already extensive used inventories, the sale of late model and low-hour machines in current inventory will have a more significant impact on the overall inventory in 2025, opening the door to a more stable combine market for the remainder of the 2025 into 2026. 

For more about used equipment, listen to my episodes on the Successful Farming podcast on the last Monday of each month. Aaron Fintel and I explore current market conditions and factors driving used equipment. Please tune in to the Moving Iron podcast, where I track the economic drivers of the farm equipment business, and check out movingironllc.com for everything related to Moving Iron.