Sandhills Global: Late-Model Inventory Accumulating as New Equipment Enters the Market

Equipment, truck and trailer markets are skewing toward newer machines, putting downward pressure on asking and auction values for late-model units, according to the newest market reports from Sandhills Global. The reports highlight trends affecting farm machinery, construction equipment, heavy-duty trucks and semitrailers in Sandhills’ marketplaces.

New equipment was hard to come by in 2021 and 2022, but factories have since ramped up production, particularly in farm equipment categories. “Over the past year or so, ag equipment dealers have been getting new equipment from OEMs at a faster pace,” Ryan Dolezal, sales manager of TractorHouse, said. “As a result, late-model inventory is building up on dealers’ lots, which can lead to lower retail pricing in the near term.”

According to Sandhills, some markets are tilting toward newer, high-dollar machines, increasing the overall entry price of equipment. “A typical combine costs 20-30% more than it did a few years ago,” Dolezal said. “However, those units are depreciating much quicker in the current market compared to in past years.”

The key metric used in all of Sandhills’ market reports is the Sandhills Equipment Value Index (EVI). The Sandhills EVI data include equipment available in auction and retail markets as well as model year equipment actively in use. Effective with the January EVI, Sandhills introduced version enhancements and weighted adjustments. All historic EVI metrics were amended and recalculated back to 2005, and all calendar year 2024 EVI releases will include these enhancements; as a result, prior numbers will not be comparable to the new values.

U.S. Used Farm Equipment

  • Used farm equipment inventory levels have been rising for the past few months. Sandhills noted a 2.35% month-over-month increase and a 35.26% year-over-year jump in January.
  • Values in January increased slightly compared to the same period last year. Sandhills has observed pronounced growth in late-model farm equipment availability as new equipment enters the market. Newer high-horsepower (300 HP and greater) tractors and combines have inflated the overall farm equipment value metrics over the past few years, but individual assets are experiencing year-over-year depreciated asking and auction values. For example, 2021 John Deere 8R 370 asking and auction values decreased 8% and 7.1%, respectively, since last year. In the overall used farm market, asking values declined 1.45% month over month, rose 7.24% year over year and are trending up.
  • In January, auction values declined 1.17% month over month, increased 1.88% year over year and are trending up.

U.S. Used Combines

  • Sandhills observed a mix of trends in the used combine market in January, with rising inventory levels and falling values. However, all three metrics were higher than they were a year ago. Inventory levels were up 4.64% month over month and 14.58% year over year in January and are trending up. Sandhills expects buyers and sellers will see more late-model inventory available in the near future.
  • Asking values decreased 2.19% month over month, increased 10.28% year over year and are trending up. Like high-horsepower tractors, newer combines have boosted overall equipment value metrics and shifted the market within the past few years, while both asking and auction values depreciated year over year for individual assets in January. For example, a 2022 John Deere S780’s asking and auction values fell 12.1% and 17.2%, respectively, year over year.
  • Auction values, meanwhile, were down 1.1% month over month and 3.8% higher year over year and are trending up.

U.S. Used Compact and Utility Tractors

  • Inventory levels of used compact and utility trailers remain at historically high levels despite a 3.58% month-over-month decline in January. Inventory levels were 27.45% higher than last year and are trending up. Sandhills anticipates similar elevated inventory trends in the coming months.
  • Asking values decreased 1.05% month over month and 0.91% year over year and are trending down.
  • Auction values decreased 0.66% month over month and 3.31% year over year and are also trending down.

U.S. Used Heavy-Duty Trucks

  • Inventory levels of used heavy-duty trucks in Sandhills’ marketplaces were 14.95% higher year over year in January but dropped 5.54% month over month and are now trending sideways.
  • Asking and auction values both declined in January, continuing a 20-month trend currently driven by declines in sleeper truck values. Asking values were down 2.1% month over month and 19.16% year over year.
  • Auction values dropped 2.32% month over month and 22.29% year over year in January. These value trends indicate a weaker demand and an adequate supply of used heavy-duty trucks.

U.S. Used Semitrailers

  • Like the used heavy-duty truck market, the used semitrailer market experienced inventory and value drops in January, with dry van semitrailers continuing to show the greatest changes. Inventory was up 54.57% year over year but down 0.65% month over month. Unlike heavy-duty truck inventory, however, used semitrailer inventory levels are trending up.
  • Asking values ticked 0.34% lower month over month and dropped 20.81% year over year in January.
  • Auction values declined 1.08% month over month and 26.29% year over year. Asking and auction values have both been declining for months.

U.S. Used Medium-Duty Trucks

  • In January, inventory levels of used medium-duty trucks fell 3.44% month over month but were 26.93% higher than last year and are currently trending sideways.
  • Sandhills observed a downward trend in values and demand in recent months, with values trending lower since mid-2022. In January, asking values declined 1.36% month over month and 13.82% year over year.
  • Auction values dropped 1.66% month over month and 15.17% year over year. The box truck category has been leading the way in both asking and auction value declines.

U.S. Used Heavy-Duty Construction Equipment

  • This market showed a small decline in inventory and values in January. Inventory levels decreased 2.2% month over month but were up 11.12% year over year, which is exerting pressure on values. Inventory is currently trending sideways.
  • Asking and auction values showed mixed year-over-year trends in January, with asking values up 1.43% and auction values down 5.34%. Asking values dipped 0.12% lower month over month after several months of decreases.
  • Auction values were down 0.08% month over month after months of decreases. Used excavators have exhibited the greatest inventory and value changes over the past few months, with lower operating weight models showing the highest year-over-year volatility.

U.S. Used Medium-Duty Construction Equipment

  • This market experienced a small month-over-month increase in inventory levels at 0.38% in January, but inventory levels were still 65.57% higher than they were a year ago.
  • Asking values were lower by 0.89% month over month and 3.3% year over year after several months of decreases.
  • Auction values also declined, by 0.26% month over month and 8.25% year over year, after months of decreases. Current market trends indicate a downward pressure on prices and an increase in inventory levels. Used track skid steers and mini excavators experienced the largest year-over-year changes in inventory levels and values.

U.S. Used Lifts

  • Inventory levels of used lifts declined 1.28% month over month but were 14.33% higher year over year and are trending sideways. Telehandlers are driving the inventory increases and putting pressure on values.
  • Asking values inched up 0.61% month over month, declined 1.27% year over year and are trending down.
  • Auction values were up 1.35% month over month and down 9.31% year over year and are trending down.

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