In 2012, the average selling price was a whopping 13% higher than the prior year after adjustment for inflation. Wait… wasn’t that the year corn spiked to $8? Yes it was. Some years revealed a decline in the new selling price of these combines. The average new selling price in 2016 was down 4% from the prior year. Also in 2016, the average annual corn price for the year was its lowest since 2010 at $3.60. When you lay the annual percentage price increase over the corn price there does appear to be a correlation.
However, while commodity prices are likely a large influencer on new combine prices, there are other factors at play, too. Among the factors in the backdrop of this period were governmental factors like Tier 4 diesel engine emission requirements and changes in Section 179 write-off amounts. New features and models from the manufacturers also come with price increases. Many factors are involved, but commodity prices are very likely a large influencer on new combine prices.
At the time of this writing, corn was at $4.50, levels not seen since spring of 2014. Will the price of corn hold up and if so, might we see new prices of class 7 combines on the rise again? Maybe.
Strong correlations like commodity price and new equipment price apply to used equipment values too. If farm commodity prices increase you may see the resale cash value on your ag equipment hold its value more than normal. Consider tracking the value of your equipment assets over time to spot these trends on your own assets. Check out your equipment value today and come back quarterly as factors change. Keep a record to see how the appraised values of your assets change over time. You can do this with IronAppraiser.com right here at Iron Solutions. It is based on the same data used in this analysis and provided by IronSolutions.com