I think the title of this article says it all. If you have tried to trade or sell your used Tigercat forestry machine lately, odds are you have been pleasantly surprised to find that these machines are bringing record prices. If you have tried to buy a used Tigercat machine, odds are you are on the frustrating end of this trend, with prices rising and availability very poor. Across the South, used Tigercat forestry equipment has been in strong demand now for several months. High quality, low hour machines are bringing a premium. The causes of this are numerous, but the primary cause seems to be good old fashioned demand outstripping supply. Another cause is clearly market perception being that these machines are simply better than their peers.
I attended the JM Wood Auction in Montgomery earlier this year. This sale usually features a good selection of used forestry machines and it is normally well attended. This sale drew a slightly larger crowd I think, possibly because there were several low hour machiness on the block. First up was a 2012 John Deere 748H with 1200 hours. This machine was like new and it brought $210,000 Dollars. We were not so surprised by that, given that they are priced in the $260k range new. Then came the star of the show in many respects because it had generated quite a bit of attention. A 2011 model Tigercat 620D Skidder with 3200 hours was brought up and the the bidding opened.
Naturally you would assume an older machine with more hours would bring a good bit less than the Deere which sold only minutes before. If anything the bidding was more intense. All the auctioneers were waving their hands and going back and forth between several bidders. It was quite a scene. I have only attended a handful of auctions in my time but have never seen anything quite like the opening seconds when the bidding started on this 2011 Tigercat. At least five different logging companies looked to be bidding on the machine simultaneously.
Bidding started at $125,000 and in seconds it was up to $150,000. Before the sale began I had approached the auctioneer and we discussed this machine and what we thought it would bring. We were all wrong. I was convinced it would bring a ridiculous sounding $175,000. I knew several of the loggers who had come to buy it and knew they were going to fight for it. New machines were at least a month to two months out and no more Tier 3 machines would be delivered. Everything from this point on would be Tier 4 and the price was going up about $15,000. A friend in the equipment business (who shall remain nameless) laughed at me saying, ‘It will bring about $150,000, no more’. The auctioneer had hopes for the seller that it would bring between $160,000 and $170,000.
What does all this mean for the average logger? Well, all things being equal, if you are looking at several machines and all of them are very expensive, one of the factors you need to consider is resale value. If a Tigercat is worth more after 5000 hours, then the machine is a better buy up front. The numbers simply do not lie. This comes back to total cost of ownership, operational cost per hour. If the machine commands a premium on the used market then you are going to be able to retain more equity value when you trade or sell.
Many of you are well aware that Tigercat Fellerbunchers have long been dominating the market, especially here in the South. Tigercat Loaders are doing well but have yet to establish themselves as the number one brand in many markets. That may change as more and more customers become acquainted with the product. What is remarkable is that finally Tigercat Skidders seem to be emerging as the top choice and this is reflected in the resale value. I think Deere and Caterpillar need to check the rear view mirror because Tigercat may be coming up fast and they might need to get over.
I could share numerous stories about late model Tigercat machines being snapped up by eager buyers in hours, not days and weeks. Meanwhile similar Deere and CAT machines sat for months, with seemingly little interest. The demand for Tigercat D-series Skidders has been so strong that it is very frustrating to try and find a good used machine for a customer. As soon as they are traded in they are sold or even presold sight unseen in many cases before they even arrive at the dealer yard. I have always confidently informed my clients that no machine has better resale value than a Caterpillar. That has changed over the past twelve months here in the US and I think it may be the start of a long term trend. If the international markets develop a taste for Tigercat then the game could be changed for good.