Combines are divided into classes that are defined by the Association of Equipment Manufacturers (AEM). The class of combine is generally determined by the model’s horsepower where the higher the horsepower the higher the class number. First let’s focus on the horsepower break between Class 6 and Class 7 combines. Class 6 combines are 268 horsepower (hp) to 322 hp and Class 7’s are 323 hp to 374 hp. If we differentiate small and large combines between Class 6 and 7, where Class 6 and lower are “small” and Class 7 and up are “large” we see that small combines made up 95% of the used combines sold in 2002. Today small combines make up only 32% of the total volume of used sold units with large combines making up the majority.
The following chart is taken from Iron Solutions product called IronTrends™ and shows this shift toward larger and larger horsepower used combines sold each year going back to 2002.
The green line represents the difference between the small and large combines and makes it easier to see the sales volume trending toward the large combines each year. Everything below the line is Class 6 or less and above is Class 7 or greater.
So, what is behind this shift to large combines?
The most obvious contributing factor to this trend is that the larger classes didn’t exist in 2002. Class 8 combines first began appearing in 2003 and Class 9’s in 2006. Slowly these higher-horsepower combines achieved a larger and larger share of the total used units sold. Another contributing factor to the increased demand for these larger machines is the increase in the size of the biggest farms. According to a USDA report* in 2018, the majority of farm production has been shifting to larger farms over the last 30 years. Today, most of the crop production is from a relatively small number of very large farms. But, no matter how big the farm, it’s still subject to a narrow window of opportunity at harvest time, which means the faster these big machines can harvest, the less risk of yield loss due to equipment unavailability.
Have large combines topped out?
There are practical limitations to the size of combines related to engineering and logistics. But aside from these limitations it appears there may be some limits to the producer’s demand on size too. The growth of market share of the used Class 9 and 10 combines is not as rapid as their Class 7 and 8 counterparts between 2008 and 2019. The biggest Class 9 and 10’s make up less than 10% of the total used units sold in 2019 after having been in the market for 10 years. Perhaps we’ve hit the ceiling of combine classes in the foreseeable future.
Today’s smaller combine owners may have a depreciation advantage.
If you’re in the camp that owns a smaller combine, as defined here, of Class 6 or smaller, there could be some good news for you. Note how the green line flattens out in 2016 to 2019. This shows that the move away from Class 6 and lower combines has slowed since 2016. The demand for smaller combines has stabilized compared to years prior to 2016 and that should mean that these smaller combines are not depreciating as fast as they were from 2006 to 2016 when the green line showed sharper year-to-year movement. Put another way, you would expect the values of the Class 6 and lower combines to fall less dramatically than they have done over the years prior to 2014 because of somewhat steadier demand.Sources: