No. of Farm Retirement Auctions Going Up
Jul 22, 2014
He wasn't kidding.
One of my long-time auctioneer friends, Gene Ryerson with Ryerson Auction & Realty, Ltd. (www.ryersonauctionrealtyltd.com), when he told me 3 weeks ago that he was beginning to get an increasing number of phone calls and inquiries from farmers looking at and thinking about having their farm retirement auction and selling off their machinery lines.
A quick look at Ryerson Auction's web site and I found six farm machinery retirement auctions coming next month. Ryerson Auction will have retirement auctions on August 1st, 4th, 7th, 14th, 20th and 26th.
What's been happening of late here with commodity prices again? Oh yeah, falling.
Where is Ryerson Auction & Realty located? North-central Iowa...big-time grain country.
Six farm retirement machinery auctions in one little area of north-central Iowa next month is quite amazing given the extended LONG period of historically low No. of machinery auctions we've had for the past 7 years now. At our Machinerypete.com firm we not only have been tracking auction sale price on all types of machinery for nearly 25 years now, we've also been keeping tabs on the No. of machinery auctions taking place throughout North America. Check out the facts:
Chew on these figures for a moment. 63.8% fewer No. of farm machinery auctions the first 6 months of 2013 vs. the same period back in 2002. See how dramatically the No. of machinery auctions fell beginning in 2007. What happened in 2007? Commodity prices surged higher. Why quit when times are good? Exactly.
So why is the No. of machinery auctions so important. Because the No. of auctions, or lack thereof, has been one of my six key factors working in tandem to drive very strong used farm equipment values the past seven years. Here's my list of 6 key factors:
For four solid years now folks of all manner have been asking me one question: "Pete, when will the bubble burst with these very HIGH used farm equipment values?" My answer was always, when at least 2 of my 6 key factors begin to flip, that's when we'll begin to see recalibrating used equipment values. So now my key factor No. 4 "Low No. of machinery auctions" is beginning to change with all the auctions coming in August. Factor No. 1....if you are a grain farmer, definitely more profit challenged days are here. So that's two changing/flipping factors right there and of course currently a very high level of uncertainly regarding my Factor No. 6....IRS Sec. 179 business asset write off limits. Will Washington act to bump up the write off $$ limits here late in 2014? If so, how much? What if they don't?
Now of course if you are a livestock or dairy farmer, 2014 has produced much more favorable profit conditions and as such, I've been tracking rising auction sale prices on good used hay & forage equipment, skid steers and mid to smaller HP size used tractors.
But if you are an older grain farmer, in north-central Iowa and beyond, more folks looking at and thinking about maybe time to sell. Late July into August also beginning to show a ramp up in the No. of large regional dealer inventory reduction auctions, the type of sales that can easily see 20 later model used tractors and combines up for sale.
...what's going to happen with used equipment values? Stay tuned.