Evan Ramstad: Think cars and trucks have gotten expensive? Take a look at tractors

Miami Herald

08-07-2025

America has moved on from the pandemic, but the industries that produce its vehicles haven't.
Car and light truck sales rose 2.5% through June, and 2025 could wind up the best year in volume since before the pandemic.
But that volatile era changed the industry and its consumers, and unit sales this year will still be around 1 million fewer than the nearly 17 million vehicles sold in 2019.
Another vehicle industry common to many Minnesotans has seen even more drama over the past half decade: farm tractors.
Many of the same influences are at play, including tariffs and interest rates. But the business cycle of the farm equipment industry is shaped by swings in farm income, which in turn is shaped by the uncontrollable force of weather.
Farm income grew from 2016 through 2022, even in the pandemic. But it fell both of the last two years, leading to an abrupt plunge in demand for tractors and other equipment.
It's a fresh distortion to a business that Greg Peterson of Rochester, founder of the Machinery Pete website, has been tracking for 35 years. And all of these changes ultimately have an effect on the prices consumers pay for food.
"If you talk to any farmer, you know the price of new equipment has continually risen," Peterson said. "Through the pandemic, with the supply chain mess, those price increases were astronomical."
List prices for tractors rose 50% to 60% from 2017 to 2023, according to the University of Illinois Extension. The price of new cars and trucks rose 22% over that period, as measured in the Consumer Price Index.
Keep in mind that a common field tractor can cost around $500,000, 10 times more than the average sales price of a car or light truck. So larger proportional increases are hitting vehicles that already had large price tags.
Then came 2024. "The market turn and slowdown last year was the most aggressive I've ever seen," Peterson said.
Equipment makers scaled back output. Revenue at John Deere, the nation's leading maker of tractors and other farm equipment, was down 22% in the six months ended April 27.
Peterson's website over the last 18 months chronicled other effects. Suddenly, competition grew between dealers selling new equipment and farmers selling used equipment because dealers found themselves sitting on a lot of inventory. Some turned to auctions to sell new machines.
This spring, Peterson warned his audience that the spike in supply could turn just as quickly.
"I started gently saying, 'You've got to be careful assuming there will be great used [tractor] deals for as long as there were in the past,'" Peterson said. "The space is different now. It's faster. It's clearing out quicker."
Just as automobile manufacturers learned during the pandemic, farm equipment makers found it's better to maintain price control by cutting back production.
"The manufacturers pinch off production because they're not selling much new now, for understandable reasons," Peterson said. "Whenever corn and beans go up, then you're going to have farmers who have been holding back say, 'Oh, I've gotta go get that planter.' Now it's going to take the manufacturer a bit to ramp back up. And their pricing power is just tremendous."
Peterson started regularly publishing the results of farm equipment auctions nationwide with magazine-like printed reports in 1989. In the early 1990s, he distributed the data on floppy disks. In the early 2000s, he started the Machinery Pete website.
Today it's a national exchange for farm equipment, and Peterson supplements the buying and selling data with his own on-site reporting, which is also distributed on the RFD-TV cable network and a YouTube channel.
He visits farmers all around the country, collecting their stories before and after sales. Last summer, that included my cousins as they retired from six decades of farming in northwest Minnesota. Peterson and I didn't know about the connection until after we met last fall.
Peterson said the pandemic created the biggest change he's seen in the farm equipment trade by nationalizing the market. Online selling had been around for nearly 30 years by then, but farmers tended to buy and sell their machines regionally.
"The thinking was, 'We're here and they're there,'" Peterson said. "That just got eviscerated in March 2020. So now, the trick if you're an auction company or farm equipment dealer, no matter where you are, is realizing that your buying pool has no edges. Your trick is to pull in the buyer in Texas or Tennessee or Utah or anywhere."
Peterson is always looking out for price records and unusual developments at auctions. Two months ago, he learned a farmer in Hendricks, Minn., sold a 13-year-old, 504-horsepower (that's very large) John Deere tractor for $291,000, a record for its age. The reason: The tractor had been used for less than 200 hours.
"In this case, the guy was 83 and he bought this stuff and then slowed down and retired," Peterson said. "If you get to that 10-year-plus age and you have a low-hour unit like that, it's like this neon beacon. You've got a tractor that will cost $600,000 or $700,000 new, and here's a barely used one with a $200,000 price on it."
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