Many in the farm equipment universe have their eyes set on the current state of the combine market. It is the most risky piece of equipment for dealerships to trade and carry. For lenders, the harvester is typically one of the largest machinery assets on a farmer's balance sheet. As combine market values continue to change, the equation changes considerably for our ag industry partners. As we will see below, used combine values continue to post record numbers, but the downward trend in used availability at auction does appear to leveling off.

We've computed Tractor Zoom's Combine Index for the month of August a few days premature to ensure we can share the information in this month's newsletter. (There is a slew of quality combines being auctioned off on August 31st, so we'll be sure to recompute the Index after those results are in.) The current August Combine Index is sitting at 155, slightly higher than the two previous months this summer, and just as strong as levels witnessed in the first few months of this year. The continued strength of the grain commodities has likely had some contribution to farmer's buying confidence, although the slow supply of production out of manufacturers is also propping up the market.

The question remains about how long the supply constraints will continue. Supply chain shortages are not a quick fix, but with big potential profits on the line, you can be sure the OEMs are doing everything they can to return production to meet demand.

Since we are on the subject of supply, Tractor Zoom has been tracking the quarterly supply of quality combines at auction over the past few years. The following image is one part of a presentation that we'll be sharing this next week at the Moving Iron Summit in Nashville.

One of the most interesting parts of this graph (for combines selling above $50,000 in our database) is the strong seasonality you can see in auction combine supply. While the latest full combine auction season was 25% - 30% lower than the previous year, the seasonal distribution of supply remained reliably the same.

If September plays out close to how it did last year, we will likely see the 3rd quarter close with auction combine supplies returning to 2021 levels. While this is not pre-pandemic status, it is still encouraging that the precipitous drop in supply may be leveling off to a new normal.